SOURCE: Recordati

March 09, 2011 08:07 ET

Recordati 2010 Accounts Approved by the Board. Net Income EUR 108.6 M. Dividend per Share EUR 0.275

MILAN, ITALY--(Marketwire - March 9, 2011) -

 * Consolidated revenue EUR 728.1 million, -2.6%.
 * Operating income EUR 154.8 million, -4.6%, (21.3% of total revenue)
 * Net income EUR 108.6 million, -1.8%, (14.9% of total revenue)
 * Net financial position*: net cash of EUR 46.0 million.
 * Dividend proposed: EUR 0.275 per share.
 * Targets for 2011: Revenue around EUR 750 million, EBIT around EUR 160
   million, Net Income around EUR 110 million .

Recordati's Board of Directors approved the consolidated financial statements for the year 2010 as well as Recordati S.p.A.'s accounts and the corporate governance and ownership report as required by art. 123 bis of the Consolidated Law on Financial Intermediation. The financial statements at and for the year ended 31 December 2010, together with the aforesaid report and the reports issued by the independent and by the statutory Auditors will be made available at the company's head office and at Borsa Italiana S.p.A. and published on the company's within the terms of the law.

Consolidated financial highlights

* Consolidated revenue for the full year 2010 is EUR 728.1 million, Slightly down (-2.6%) compared to the preceding year. Pharmaceutical sales are EUR 702.3 million, a decrease of 2.5%. The expiry of the composition of matter patent covering lercanidipine in the main European countries in January 2010 involved a 30.8% reduction of this product's sales which was mostly offset by the good sales performance of the rest of the pharmaceutical portfolio and by revenues generated by our international licensing-out business. Pharmaceutical chemicals sales are EUR 25.9 million, down by 3.8%.

* Operating income, at 21.3% of sales, is EUR 154.8 million, an decrease of 4.6% compared to the preceding year. The fourth quarter 2010 results include an up-front payment of EUR 10.0 million to Nymox Pharmaceutical Corporation for the acquisition of development and marketing rights to a new innovative product.

* Net income at EUR 108.6 million, down by 1.8%, benefited from lower financial expenses.

* Net financial position* at 31 December 2010 records net cash of EUR 46.0 million, an increase of EUR 65.7 million as compared to 31 December 2009. Dividends for an amount of EUR 54.4 million were paid during the year and new development initiatives were financed. Shareholders' equity further increased and is EUR 576.0 million.

* Cash and short-term financial investments net of bank overdrafts and medium/long-term loans which include the measurement at fair value of hedging derivatives (fair value hedge).

Company development highlights

2010 was a year of many achievements and initiatives for the future development of the Group.

* To begin with, at the end of January Recordati was granted Marketing Authorization by the European Commission for the medicinal products Urorec® and Silodyx™ (silodosin), for the treatment of the symptoms of benign prostatic hyperplasia and, during June, marketing authorization for silodosin based products was also granted by the Russian Federation. The compound was originally developed by Kissei Pharmaceutical Co. Ltd. in Japan and was obtained under license by Recordati for the whole of Europe (45 countries) and for a further 18 countries in the Middle East and Africa. Development of the drug was conducted by Recordati for its territories. In June Urorec® was introduced into the market in Germany by subsidiary Merckle Recordati and in September it was launched in Spain where Recordati España co-markets the product with Almirall. Urorec® is also now available in Ireland and in France where it is marketed by Bouchara Recordati and by our partner Zambon France. The launch of this specialty in the other European markets is expected to take place over the next months, following completion of the reimbursement and pricing procedures in each country.

* The Food and Drug Administration (FDA) in the U.S. granted its approval of the NDA submitted by Orphan Europe for the use of Carbaglu® (carglumic acid) in pediatric and adult patients for the treatment of acute hyperammonaemia due to the deficiency of the hepatic enzyme N-acetyl glutamate synthase (NAGS deficiency) and as maintenance therapy for chronic hyperammonaemia due to NAGS deficiency. The product is available on the market as from November 2010. NAGS deficiency, a very rare disease involving extremely high plasma levels of ammonia, which leads to permanent and irreversible damage of the central nervous system, is a lifelong serious life-threatening clinical condition. The symptoms start shortly after birth and develop rapidly. Timely diagnosis and prompt effective treatment are essential to prevent patients from permanent neurological damage. Carbaglu® is the only specific treatment of hyperammonaemia due to NAGS deficiency. Carbaglu® does not only save patients' lives, but also assures a good quality of life for patients on a continuous treatment.

* The Decentralized Procedure for the approval of pitavastatin (Livazo®, Alipza® and other brands) in Europe was concluded with a positive outcome as communicated by the Reference Member State (MHRA, Medicines and Healthcare products Regulatory Agency, UK) following the agreement of all the Concerned Member States. Pitavastatin was licensed by Recordati from the Japanese pharmaceutical company Kowa for the European market. It is available on the market in Japan and in the U.S.. Pitavastatin promises to be an effective new treatment for dyslipidemia, a condition characterized by altered levels of blood cholesterol and other lipids and associated with an increased risk for heart disease and stroke. During 2010 Recordati signed two license agreements for pitavastatin, one with Esteve, a leading Spanish pharmaceutical company, which will co-market the product together with Recordati España, the subsidiary of the Recordati group in Spain, and the other one with Merck Serono for the co-marketing of the product in France together with the group's French subsidiary Bouchara Recordati.

* At year-end Recordati and Nymox Pharmaceutical Corporation finalized a European licensing agreement for the development and commercialization of NX-1207, Nymox's Phase III investigational drug currently in clinical development in the U.S. for the treatment of benign prostatic hyperplasia (BPH). Under the terms of the agreement, Recordati receives exclusive rights to develop and subsequently market and sell NX-1207 in Europe including Russia and the CIS, the Middle East, the Maghreb area of North Africa and South Africa (i.e. a total of 81 countries). The drug involves a new targeted approach to the treatment of BPH. Recordati made an upfront payment to Nymox of EUR 10 million and will make subsequent approval and sales milestone payments and tiered supply and royalty payments.

* The group's product portfolio was enhanced following the conclusion of an agreement with Novartis for the acquisition in Greece and in other European countries of Lopresor® (metoprolol), a well known selective beta blocker for the treatment of different cardiovascular disorders, in particular hypertension and angina pectoris. Under the agreement Recordati acquired the product's marketing authorizations and know-how, including manufacturing rights, as well as a free unlimited license for the use of the brand Lopresor®. 2009 sales of Lopresor® (metoprolol) were overall around EUR 4 million in the countries covered by the agreement, most of which were generated in Greece. Furthermore, in December a license agreement was signed with Merck KGaA for the marketing and sales in Italy of Cardicor® (bisoprolol). Cardicor® belongs to the beta-blocker class of drugs and is indicated for the treatment of chronic, stable, moderate to severe heart failure, associated with reduced systolic ventricular function, to be administered with ACE inhibitors and diuretics. The product is available on the market in Italy and generates annual sales of around EUR 9 million.

* In line with its strategy to extend group operations to the countries of Central and Eastern Europe Recordati acquired ArtMed International, a company dedicated to the promotion of pharmaceutical products in Romania with offices in Bucharest. Furthermore, the rights to the products currently being promoted by ArtMed were also acquired. ArtMed has a staff of 24 employees dedicated to marketing and medical information activities directed at physicians and pharmacists.

Subsequent events and business outlook

* In January the marketing authorizations, the brand and the rights to the product Procto-Glyvenol® were acquired from Novartis Consumer Health for the following countries: Poland, Russia, Turkey, Romania, Czech Republic, Slovakia, Ukraine, Portugal, the Baltic countries and Cyprus. Procto- Glyvenol® is indicated for the localized treatment of internal and external hemorrhoids and is currently on the market in the countries included in the agreement.

* Group consolidated sales during the first two months of 2011 are in line with the company's expectations for the whole year which target sales of around EUR 750 million, operating income of around EUR 160 million and net income of around EUR 110 million.


Based on the results obtained and the requirements of law and the company bylaws, the Board of Directors of the parent company will propose to the shareholders a dividend of EUR 0.275 per share (EUR 0.275 per share last year) to be paid to all shares outstanding at the date the shares trade ex-dividend, excluding those in treasury stock at that date, as from 21 April 2011 (trading ex-dividend as of 18 April 2011).

Further Board resolutions

The Board acknowledged that the Chairman, in execution of the mandate conferred by the Board on 9 February 2011, convened - as announced on 2 March 2011 - the Annual Meeting and an Extraordinary Meeting of Shareholders to be held on first call on 13 April 2011, at 10.00 a.m., and on second call on 14 April 2011, at 10.00 a.m., at the company's registered offices. Shareholders will be called upon to:

Extraordinary Meeting

1. Modify articles 9, 10 and 12 of the company bylaws also as related to Legislative Decree dated 27 January 2010, number 27.

Annual Meeting

1. Approve the Annual Report of the Board of Directors, the Statutory Auditors' Report and the 2010 financial statements.

2. Appoint the Board of Directors following the decision as to the number of members and their remuneration.

3. Appoint independent auditors to audit the annual financial statements, the consolidated financial statements and the condensed half yearly financial statements for the years 2011-2019 and decide upon their remuneration.

4. Appoint the Statutory Auditors and their Chairman and decide upon their remuneration.

5. Renew the authorization to buy back and dispose of Recordati shares.

6. Modify the 2006-2009 Stock Option Plan.

The Board also resolved to submit to the Annual and Extraordinary Meeting of Shareholders the following proposals:

* to modify articles 9, 10 and 12 of the company bylaws mainly as related to Legislative Decree 27 January 2010, number 27.

Proposals will be submitted to the Shareholders' Meeting for the modification of the company bylaws - in particular of articles 9, 10 and 12 - mainly in order to take into account a number of changes introduced by Legislative Decree dated 27 January 2010, number 27, which absorbed Directive 2007/36/CE dated 11 July 2077 on the subject of shareholders' rights.

* to renew the authorization to buy back and dispose of Recordati shares.

The objective of the proposal to renew the authorization to buy back and dispose of Recordati shares until the Annual Shareholders' Meeting which will approve the 2011 financial statements is, as in previous years, to grant the Board the possibility: of using shares for equity acquisitions or as consideration for strategic agreements; of allowing the company to invest in its own shares; and of constituting a stock of own shares to service current and future stock option plans. The company would be allowed to purchase up to 20,000,000 Recordati existing ordinary (common) shares, which includes those shares held in Treasury stock at any given time, for a maximum cash outlay of EUR 150,000,000 million. The purchase price must be at least equal to the shares' nominal value (EUR 0.125) and must not exceed the average official Stock Exchange price recorded over the 5 trading days prior to the transaction, plus 5%. Possible purchases must comply with the Issuers' Regulations and with market practice allowed and recognized by CONSOB. At 8 March 2011 the company has 11,033,105 shares in Treasury stock which amounts to 5.28% of the current share capital. A total of 922,000 shares were purchased as at yesterday under the share buy-back program announced on 15 February 2011. Said program will end on the date of the Shareholders' Meeting which will approve the 2010 financial statements.

* to modify the 2006-2009 Stock Option Plan pursuant to art. 114 bis of Legislative Decree 58/98.

The Board of Directors resolved, having received the favorable opinion of the Remuneration Committee, to modify the 2006-2009 Stock Option Plan which was approved by the Shareholders at their Meeting dated 6 April 2006. Said modification, which will be submitted to the next Shareholders' Meeting pursuant to art. 114 bis of Legislative Decree 58/98, involves mainly the elimination of the option exercise periods included in the plan. If approved by the Shareholders, this change will allow the vested and not yet exercised stock options and the options which will be vested in the future, to be exercised at any time during the year. The remaining aspects of the Plan are unchanged.

In view of the fact that, following the issuance of their audit report on the 2010 financial statements, Deloitte & Touch S.p.A.'s audit assignment will expire (and is legally non-renewable) the Shareholders' Meeting will be called upon to appoint a new auditor based on the motivated proposal submitted by the Statutory Auditors. The latter proposed to the Board of Directors, which will in turn propose to the Shareholders' Meeting, to appoint KPMG S.p.A..

Recordati, established in 1926, is a European pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT 0003828271),with a total staff of over 2,800, dedicated to the research, development, manufacturing and marketing of pharmaceuticals. It has headquarters in Milan, Italy, operations in the main European countries, and a growing presence in the new markets of Central and Eastern Europe. A European field force of around 1,400 medical representatives promotes a wide range of innovative pharmaceuticals, both proprietary and under license, in a number of therapeutic areas including a specialized business dedicated to treatments for rare diseases. Recordati's current and growing coverage of the European pharmaceutical market makes it a partner of choice for new product licenses from companies which do not have European marketing organizations. Recordati is committed to the research and development of new drug entities within the cardiovascular and urogenital therapeutic areas and of treatments for rare diseases. Consolidated revenue for 2010 was EUR 728.1 million, operating income was EUR 154.8 million and net income was EUR 108.6 million.

Statements contained in this release, other than historical facts, are "forward- looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based on currently available information, on current best estimates, and on assumptions believed to be reasonable. This information, these estimates and assumptions may prove to be incomplete or erroneous, and involve numerous risks and uncertainties, beyond the Company's control. Hence, actual results may differ materially from those expressed or implied by such forward-looking statements. All mentions and descriptions of Recordati products are intended solely as information on the general nature of the company's activities and are not intended to indicate the advisability of administering any product in any particular instance.


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Source: RECORDATI via Thomson Reuters ONE


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