SOURCE: Pronova BioPharma ASA

May 06, 2008 01:11 ET

Extensive growth in all end-user markets

LYSAKER, NORWAY--(Marketwire - May 6, 2008) -


Pronova BioPharma ASA (OSE: PRON.OL) ("Pronova BioPharma" or the "company" or the "group") achieved an EBITDA of NOK 121.6 million in the first quarter. Revenues grew by 2.8 per cent, impacted by the previously announced quarterly variations in production volume. In-market demand for Omacor/Lovaza continues to grow significantly in all markets. End-user sales at the end of February increased by 56 per cent, driven by accelerated growth in the USA, following the increased marketing efforts of GSK.

Underlying end-user sales continued to develop exceptionally well. In the USA, Lovaza reached (30, April 2008) a 13.4 per cent share of new prescriptions in the non-statin dyslipidemic market, compared to 11.5 per cent market share at the start of the year. The market share in total prescriptions grew to 11.6 per cent (30, April 2008) compared to 9.7 per cent at the beginning of the year. The total number of Lovaza prescriptions in the first quarter increased by 50.2 per cent, compared to the same period in 2007. Growth in the USA was supported by GSK's increased sales force utilisation, through a re-launch of Lovaza with 1 500 sales representatives in February 2008. This increased market presence is expected to further improve sales growth in the second quarter of the year.

Omacor also continued its positive development in all European markets in the first two months, with an overall growth rate of 46 per cent from the same period last year.

Commenting on the first quarter results, Tomas Settevik, president and CEO of Pronova BioPharma said: "Omacor/Lovaza continues to see strong end-user sales growth and has gained market share across all geographies. Going forward, we expect this growth to continue, driven by high demand for the product in the US and the additional investment in sales and marketing by GSK. With both the new Kalundborg plant and our product development pipeline progressing well, we have confidence in the future prospects of Pronova BioPharma."

Produced volumes in the first quarter ended somewhat lower than in the fourth quarter of 2007, following the previously announced quarterly variations in the group's production volume and the required maintenance and upgrading of equipment. Overall performance was good, with a total volume of 256 tonnes (213 tonnes) in the period. With continued focus on production efficiency, the group's gross margin for the first quarter 2008 was 79.7 per cent (76.9 per cent), and shipped volume was 239 tonnes (248 tonnes). The full year targeted production volume for 2008 remains on track at 1 200 tonnes.

Construction of the new plant in Kalundborg, Denmark, continues to be in line with the group's execution plan, both in terms of the time-line and in terms of the overall budget. At 31 March 2008, 31 full-time employees were assigned to Denmark. A number of these are completing job training programmes at the Sandefjord plant in preparation for the commencement of operations at the new manufacturing site. Groundwork and site preparation was finalised in the quarter and approximately 65 per cent of procurement cost was committed by the end of March. The group remains on track to have the mechanical part of the project completed in the third quarter of 2009, and to deliver the first commercial shipment of Pronova BioPharma's API in the first quarter of 2010.

The preliminary injunction against Chiesi Farmaceutici for infringement of the Italian patent in the district court of Rome has not yet been concluded. The company expects a decision within the second quarter of 2008. The nullity action against the patent covering the API of Omacor in the district court of Milan is still in process. It is expected that the decision of the court will be rendered towards the end of 2008.

Pronova BioPharma's product pipeline continues to develop positively with lifecycle and extension programmes expected to be completed in 2008. In particular, the GISSI-HF trial (congestive heart failure trial) will conclude the analysis in June in order to present the main results of the study at the European Society of Cardiology meeting at the beginning of September.

Group revenues in the first quarter increased by 2.8 per cent to NOK 258.9 million (NOK 251.9 million), somewhat lower than in the previous quarter, due to the expected quarterly variations in production volume and the required maintenance and upgrading of certain equipment at the Sandefjord plant. Revenues were also impacted by the weakness of the dollar, which on a local currency basis was up 8 per cent. GSK's sales of Lovaza in the USA represented 48.1 per cent of revenues in the first quarter (62.3 per cent).

EBITDA was NOK 121.6 million and in line with the first quarter of 2007 (NOK 121.5 million), with an EBITDA margin of 47.0 per cent (48.2 per cent). Gross profit for the quarter came to NOK 206.3 million (NOK 193.7 million). The EBITDA margin decrease was mainly a result of increased employee benefits expenses in Norway (up NOK 8.1 million), and to a lesser extent employee benefit expenses in the Kalundborg project (up NOK 2.3 million). Net financial expenses for the first quarter 2008 were NOK 21.3 million (NOK 7.5 million).

The group's profit before tax in the first quarter totalled NOK 58.6 million (NOK 61.4 million), and was impacted by the increase in net financial expenses mentioned above. Calculated income tax expense for the group was NOK 15.1 million (NOK 17.3 million), which corresponds to an effective tax rate of 25.8 per cent for the quarter.

Net profit was NOK 43.4 million, slightly below the NOK 44.1 million achieved in the first quarter of 2007. Earnings per share (basic and diluted) were NOK 0.14 (NOK 0.16), and adjusted for amortisation, the earnings per share were NOK 0.22 (NOK 0.34).

The company reiterates the full-year production target of approximately 1,200 tonnes in 2008. As previously announced, the acceleration of the new site in Kalundborg will increase the number of employees during 2008, which in turn will increase operating expenses, impacting the group's EBITDA margin accordingly. Total estimated capital expenditure for the new site in Kalundborg remains unchanged at NOK 1,450 million to NOK 1 700 million, and the expectations of an accelerated time-line for the first commercial shipments to take place in the first quarter of 2010 remain unchanged. 2008 will see the conclusion of a number of important life-cycle and extension programmes. The GISSI-HF (congestive heart failure), OM8Afib (atrial fibrillation) and OM9L (concomitant treatment of Omacor/Lovaza with atorvastatin) clinical trials are all progressing according to plan and may offer significant potential for the group. Omacor/Lovaza has experienced strong growth in end-user sales this quarter and has continued to gain market share across all geographies. Going forward, it is expected that this strong growth will continue.

The complete, quarterly report is enclosed and also available at www.newsweb.no and at www.pronova.com

A presentation of the results will be webcasted at 08:30 AM CET. The presentation material is enclosed. The webcast can be accessed from www.pronova.com. In addition, the company will host a telephone conference which will open for Q&A immediately after the presentation.

Please dial the following numbers:

Country               Number
Norway free call      800 19640
International dial In +44 (0)20 7806 1955
UK free call          0800 028 1277
USA free call         1888 935 4577



For further information, please contact:


Hilde H. Steineger, Head of IR +47 48 00 42 40
Morten Jurs, CFO               +47 22 53 49 10

PRON Q1 2008 presentation: http://hugin.info/137506/R/1216161/254044.pdf

PRON Q1 2008 report: http://hugin.info/137506/R/1216161/254042.pdf

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