Full year report January-December 2014

Unless otherwise stated in this report, all data refers to the Group. Figures in parentheses relate to the corresponding period in 2013.

Zubsolv® continues to gain market share

Fourth quarter 2014

  • Total net revenues amounted to MSEK 220.5 (99.5). Revenues from launched products, excluding one-off milestones, amounted to MSEK 162.0 (99.5).
  • Earnings after tax were MSEK 51.6 (-37.8).
  • Earnings per share were SEK 1.50 (-1.19).
  • Cash flow from operating activities amounted to MSEK -7.3 (-115.5).
  • Orexo submitted application to FDA for expanded label for Zubsolv®.
  • FDA approved two higher dosage strengths of Zubsolv.
  • Orexo received MGBP 5 milestone payment for Abstral® in Europe.

January-December 2014

  • Total net revenues amounted to MSEK 570.3 (429.4). Revenues from launched products, excluding one-off milestones, amounted to MSEK 510.1 (310.8).
  • Earnings after tax were MSEK -56.6 (-154.9).
  • Earnings per share were SEK -1.73 (-5.16).
  • Cash flow from operating activities amounted to MSEK -487.3 (-265.8).
  • Completion of issue and listing of a MSEK 500 unsecured bond and private placement of approx. MSEK 346.5, including all Orexo shares held in treasury by the company in addition to newly issued shares.
  • Cash and cash equivalents amounted to MSEK 284.5 (105.6).
  • Exclusive reimbursement agreement for Zubsolv entered with UnitedHealth Group and WellCare.
  • inVentiv Health selected as new commercial partner for Zubsolv in the US from July 1st.
  • Positive results achieved from two phase 3 clinical trials assessing Zubsolv for induction of buprenorphine maintenance therapy and top-line data showing that Zubsolv is as effective as Suboxone® film in the treatment of opioid dependence.
  • Orexo commenced patent infringement litigation against Actavis concerning Zubsolv.
  • OX-MPI project was returned to Orexo.
  • Orexo enhanced its commercial focus by placing all manufacturing of Zubsolv with partners in the US and streamlining operations in Uppsala.

MSEK 2014 2013 2014 2013
  Oct-Dec Oct-Dec Jan-Dec Jan-Dec
Net revenues 220.5 99.5 570.3 429.4
Revenues from launched products 220.5 99.5 568.6 421.6
EBIT 59.0 -31.7 -25.0 -139.7
EBITDA 64.1 -29.0 -12.5 -89.1
Earnings after tax 51.6 -37.8 -56.6 -154.9
Earnings per share before dilution, SEK 1.50 -1.19 -1.73 -5.16
Cash flow from operating activities -7.3 -115.5 -487.3 -265.8
Cash and cash equivalents 284.5 105.6 284.5 105.6

Teleconference
CEO Nikolaj Sørensen and CFO Henrik Juuel will present the report at a teleconference on January 29, 2014 at 2:00pm CET (08:00am EDT).
Presentation slides are available via the link and on the website.
Internet: http://financialhearings.nu/150129/orexo/
Telephone: +46 8 566 426 96 (SE), +44 203 428 14 31 (UK) or +1 646 502 51 16 (US).

For further information, please contact:
Nikolaj Sørensen, CEO or Henrik Juuel, EVP and CFO
Tel: +46 (0)18 780 88 00, E-mail: ir@orexo.com

CEO’s comments
It is with pride that I can report a long list of achievements for Orexo during 2014 accomplished by our colleagues in Sweden and the US. Orexo gained significantly more traction with Zubsolv in the US and we have successfully completed the first Zubsolv post-launch clinical trials and product developments. We have also strengthened the Swedish and the US organizations and we have created a stronger financial platform by raising nearly SEK 850 million in additional capital to support launch of Zubsolv and life cycle management activities.

The main focus during 2014 has been to continue the launch of Zubsolv in the US. We are proud to see that the brand has reached a market share of nearly 6 percent. Benchmarking the Zubsolv launch to other similar launches of new formulations of opioids, Zubsolv has been the strongest performing launch since 2011 and with significant margin outperformed the most recent launch in the Buprenorphine/Naloxone category. A key growth driver has been the continuing improvement in market access and by the third quarter we completed our objective of having equal or better access to the market than our leading branded competitor for more than 50 percent of the market. We have successfully closed exclusive contracts for patients within CVS/Caremark and United Health Group and in the fourth quarter with WellCare. These exclusive contracts have been important in gaining physicians’ and patients’ confidence in Zubsolv and we have seen many physicians increasing their brand preference for Zubsolv after initiating treatment with the product following an exclusive contract implementation. During 2014 we have made a large transition of the sales force, moving the field force to a new partner and employing all sales managers within Orexo. Clear benefits from this change in field force structure have materialized during the fourth quarter, where we have seen consistent improvements in field force productivity and we have seen the first sales districts exceeding 15 percent market share and several other now exceeding 10 percent.

To secure the long term growth of Zubsolv, we have continued with extensive investments in the product. During 2014 we completed two clinical trials and gained approval for two additional dosage strengths in December. The clinical trial comparing Zubsolv with our leading competitor, the ISTART study, was especially important. The study confirmed the patient preference for Zubsolv and that the two products have a similar clinical effect. This study has gained positive attention and improved the dialogue with physicians significantly. The results have enabled us to apply for an expanded label to include induction of treatment and we have received confirmation from the FDA that the expected approval date is during the third quarter of 2015.

During 2014, we have strengthened our financial position considerably and with this strong financial position, we will continue to invest in the development of the Zubsolv franchise. During 2015 we will seek approval for one additional dosage strength and plan to initiate at least one new clinical trial. 2015 is also a year where the work to enable the launch of Zubsolv outside the US will intensify. Together with colleagues at Orexo in Sweden and the US we are looking forward to 2015 with great confidence. Our top priority remains securing the commercial success of Zubsolv, but we are also excited about starting to take the next steps in the life cycle of Zubsolv, progressing the development of OX51 and evaluating new development projects.

Nikolaj Sørensen
President and CEO

Please note
Orexo AB publ discloses the information provided herein pursuant to the Financial Instruments Trading Act and/or the Securities Market Act. The information was provided for public release on January 29, 2015, at 8:00am CET. This report has been prepared in both Swedish and English. In the event of any discrepancy in the content of the two versions, the Swedish version shall prevail.

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About Us

Orexo develops improved pharmaceuticals based on innovative drug delivery technologies.The focus is primarily on opioid dependence and pain but the aim is to address therapeutic areas where our competence and technologies can create value. The main market today is the US market for the treatment of opioid dependence where the product Zubsolv® is commercialized by Orexo. Other products are commercialized by license partners, including Zubsolv in markets outside of the US. Total net sales for 2016 amounted to SEK 705.9 million and the number of employees was 102. Orexo is listed on the Nasdaq Stockholm Mid Cap (ORX) index and is available as ADRs on OTCQX (ORXOY) in the US. The head office, where also research and development is performed, is located in Uppsala, Sweden.

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