SOURCE: EastPharma Ltd

December 19, 2007 04:21 ET

Results announcement for the nine months to 30 September 2007

LONDON--(Marketwire - December 19, 2007) -


    Results announcement for the nine months to 30 September 2007

EastPharma (EAST LI), a company active in the manufacturing and marketing of branded generic pharmaceuticals in Turkey and selected emerging markets, today announces its results for the nine months to 30 September 2007.

  * +61.5% yoy growth in Deva's revenues to US$161.5mn in 9M 2007
  * +73% yoy increase in Saba's revenues to US$8mn in 9M 2007
  * +78% yoy increase in gross profit at Deva in 9M 2007
  * US$28.6mn EastPharma EBITDA
  * Term Sheet signed for purchase of licenses and licensing

Detailed financial statements of EastPharma are provided in the attachment.

For further information please contact:
EastPharma Ltd.

Idil Bora - Investor Relations
Tel.: + 90 (212) 6929326

Business and financial review

EastPharma was established in August 2006, hence financial results comparing 9M 2007 with 9M 2006 are not available.

Revenues totalled US$164.9mn, with a gross profit of US$75.8mn resulting in a gross profit margin of 46%. Revenues at Deva were up very strongly +61.5% to US$161.5mn for the 9M 2007 (revenues for Deva in 9M 2006 were US$100.6mn). At Saba, revenues were up +73% to US$8mn.

Operating expenses were US$61.5mn. General Administration Expenses were US$14.7mn (8.9% of Revenues). Marketing expenses increased to 27.1% of revenues compared to 21.4% for the 6M 2007. This increase reflects investment to support the launch of new products and of making good inroads into higher margin products.

EastPharma posted an EBITDA figure of US$28.6mn, with an operating profit of US$14.4mn resulting in an operating margin of 8.7%.

The Group had a cash balance of US$170mn as at 30 September 2007, placing it in a strong position to rapidly deploy its resources as required for suitable acquisitions and deals.

Financing non-recurring costs amounted to US$20.6mn and distorted the otherwise very healthy operational position and strong growth of EastPharma. These non-recurring costs were mostly made up by an adjustment on hedging currency risk of US$13.9mn. Other items were a retirement pay provision for the restructuring of personnel of US$1.9mn, impairment of property and plant of US$3.2mn relating to the construction of the new facility in Cerkezkoy and a penalty paid for environmental liability of US$1.5mn.

Segmental information

The Human Pharmaceuticals division accounts for 88% of revenues and recorded US$146.3mn in revenues.

Sales of cardiovascular products have been growing steadily throughout the year as a percentage of total revenues, and in 3Q 2007 reached 7% of revenues (3.9% of revenues in 1Q 2007 and 4.4% in 2Q 2007).

Two more products were added to the reimbursement list: Colastin was included in June and Coniel was added in July, thereby widening the sales base for our products, and contributing positively to revenues.

The API manufacturing division accounts for 4% of revenues and derives its revenues from the manufacturing and sale of antibiotic active ingredients. API posted revenues of US$12.0mn.

The Veterinary Products division accounts for 5% of revenues and operates in the veterinary drugs and agrochemicals sector. It registered revenues of US$7.4mn.

Consumer Goods accounts for 3% of revenues and includes empty ampoules and hygienic products. Consumer Goods had revenues of US$8.5mn.

Term Sheet signed

EastPharma announces today that it has signed a Term Sheet relating to the purchase of licenses and licensing agreements from a research-based pharmaceutical company.

Successful completion of this transaction will provide EastPharma and its subsidiaries Deva Holding A.S. and Saba Ilac Sanayi with additional products which complement its extensive product portfolio and increase its exposure in those therapeutic areas which EastPharma has chosen to target for strategic reasons. The products to be acquired and licensed in by EastPharma had revenues of approximately US$ 90mn in 2006.

The proposed transaction is subject to the completion of due diligence, the negotiation and execution of definitive documentation and regulatory approvals, including the approval of the competition board. It is anticipated that relevant agreements relating to the proposed transaction will be signed in February 2008, while the closing is anticipated to complete in March/April 2008.


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