milan : REC

July 26, 2011 06:56 ET

Recordati: Very Good First Half 2011 Results. Sales +6.6%. Net Income +5.3%

MILAN, ITALY--(Marketwire - Jul 26, 2011) -

  * Consolidated revenue EUR 401.0 million, + 6.6%.
  * Operating income EUR 88.2 million, + 5.2%.
  * Net income EUR 62.4 million, + 5.3%.
  * Net financial position*:  positive balance of EUR 27.8 million.
  * Procto-Glyvenol® acquired from Novartis Consumer Health
  * Initial launches in Europe of Livazo® (pitavastatin)
  * Extension of the use of Carbaglu® (carglumic acid) to treat
    hyperammonaemia due to one of the three main organic acidemias
    approved in Europe
  * Agreement for the acquisition of the Turkish pharmaceutical
    company Frik Ilaç

The Board of Directors of Recordati S.p.A. approved the Group's consolidated results for the first half 2011 prepared in accordance with International Accounting Standards and International Financial Reporting Standards (IAS/IFRS) and in particular as per IAS 34 requirements for interim reporting. These financial statements, together with the independent auditors' report on the condensed half-year financial statements, will be available tomorrow, or at the latest within the legal deadline, at the company's offices, at Borsa Italiana S.p.A. and on the company's website:

Financial highlights

  * Consolidated revenue in the first half 2011 is EUR 401.0 million, up
    by 6.6% compared to the same period of the preceding year.
    Pharmaceutical sales are EUR 385.5 million, an increase of 6.1% despite
    sales of lercanidipine down by 15.6% as a result of the entry of
    generics into the market following this product's patent expiry in 

  * Operating income, at 22.0% of sales, is EUR 88.2 million, an increase
    of 5.2% over the same period of the preceding year. Selling expenses
    increase by 10.4% mainly to support the launch of the new products.

  * Net income at 15.5% of sales is EUR 62.4 million, an increase of 5.3%,
    higher than that recorded by operating income thanks to a lower tax

  * Net financial position* at 30 June 2011 shows a positive balance of EUR
    27.8 million, a decrease of of EUR 18.2 million as compared to 31
    December 2010 due to the payment of the 2010 dividend and the
    acquisition of the new product Procto-Glyvenol®. Shareholders'
    equity increased to EUR 584.6 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).

Business development news

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.

The European roll-out of Livazo® (pitavastatin) started with its launches in Spain, by Recordati España and its co-marketer Esteve, and in Portugal, by Jaba Recordati and its co-marketer Delta. Pitavastatin, 1mg, 2mg and 4mg tablets, is a novel statin indicated for the reduction of elevated total and LDL cholesterol in adult patients with primary hypercholesterolaemia and combined (mixed) dyslipidaemia when response to diet and other non-pharmacological measures is inadequate. This medicinal product promises to be an effective new treatment for dyslipidemia, a condition associated with an increased risk for heart disease and stroke. The launch of Livazo® and Alipza®( )in Spain, one of the important European pharmaceutical markets, represents the first step in the commercialization in Europe of this new specialty.

Approval was received to extend the use of Carbaglu® (carglumic acid) to treat hyperammonaemia due to one of the three main organic acidaemias (isovaleric acidaemia, methylmalonic acidaemia or propionic acidaemia). Carbaglu®( )has orphan drug designation and since 2003 is indicated in the treatment of NAGS deficiency. Organic acidaemias (OA) are usually diagnosed in infancy, can be fatal, and affect especially the central nervous system. They are a group of inherited rare metabolic disorders which disrupt physiologic amino acid degradation causing a build-up of organic acids, which in turn may inhibit the urea cycle function, leading to hyperammonaemia. Acute hyperammonaemia due to OA represents a true medical emergency and Carbaglu®,( )by restoring the urea cycle and thus reducing blood ammonia levels, prevents brain damage.

On 1 July the agreements covering the acquisition of 100% of the share capital of Dr. F. Frik Ilaç A.S., a Turkish pharmaceutical company with headquarters in Istanbul, were signed. The value of the transaction (enterprise value) is of around $ 130 million, and will be funded from existing liquidity. The closing of the transaction, expected to take place in the following months, is subject to certain conditions, including clearance by the relevant competition authorities. This is the second acquisition Recordati has made in Turkey, where it acquired Yeni Ilaç in December 2008. Frik Ilaç is one of the fastest growing pharmaceutical companies in Turkey. The company has a core portfolio of original prescription products both in primary care and specialist areas and employs 350 personnel, of which around 260 are medical representatives. Net sales in 2010 were of around YTL 100 million (ca. EUR 44 million).

Management Comments

"The first half of 2011 was positive for the development of the Group considering both the very good financial results obtained as well as the conclusion of important initiatives" declared Giovanni Recordati, Chairman and CEO. "In particular we are very satisfied with our second acquisition in Turkey, a country with excellent economic development prospects and a pharmaceutical market which is growing strongly. Central and Eastern Europe, including Turkey, represents a strategic area for the future development of the Group, a strategy which is confirmed by the 33.4% growth of our revenues in these markets in the second half" continued Giovanni Recordati. "The first quarter results allow us to improve our forecast for the full year 2011 during which we expect to achieve revenues above EUR 750 million, operating income above EUR 160 million and net income above EUR 110 million."

Conference call

Recordati will be hosting a conference call today 26 July 2011 at 4.00 pm Italian time (3.00 pm London time, 10.00 am New York time). The conference ID is 1561304 and dial-in numbers are:

Italy                    +39 02 30413100, toll free 800 088 738
UK                       +44 (0) 20 71366283
USA                      +1 212 444 0412
France                   +33 (0) 1 70994295
Germany                  +49 (0) 6950071305

Callers are invited to dial-in 10 minutes before conference time and state the ID number 1561304. If conference operator assistance is required during the connection please digit * followed by 0 or call +353 23 8832493. A recording of the conference call will be placed on the website

A set of slides which will be referred to during the call will be available on our website under Investors/Company Presentations.

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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