Financial Statement, January – December 2014

Financial summaries for the fourth quarter and the year as a whole*

October to December 2014 (2013)

• Net turnover totalled SEK 377.0 million (SEK 147.1 m), SEK 220.1 million (SEK 10.5 m) of which comprised royalties for simeprevir.
• Revenues from Medivir’s own pharmaceutical sales totalled SEK 156.6 million (SEK 47.6 m), SEK 103.1 million (SEK 0) of which derived from sales of OLYSIO® and SEK 53.5 million (SEK 47.6 m) from sales of other pharmaceuticals.
• The profit/loss after tax was SEK 147.3 million (SEK 19.3 m).
• Basic and diluted earnings per share totalled SEK 4.71 (SEK 0.62) and SEK 4.67 (SEK 0.62), respectively.
• The cash flow from operating activities amounted to SEK 505.4 million (SEK 75.6 m).

January to December 2014 (2013)

• Net turnover totalled SEK 1,767.0 million (SEK 446.1 m), SEK 1,399.0 million (SEK 10.5 m) of which comprised royalties for simeprevir.
• Revenues from Medivir’s own pharmaceutical sales totalled SEK 366.8 million (SEK 176.1 m), SEK 186.4 million (SEK 0) of which derived from sales of OLYSIO® and SEK 180.4 million (SEK 176.1 m) from sales of other pharmaceuticals.
• The profit/loss after tax was SEK 1,132.7 million (SEK 16.0 m).
• Basic and diluted earnings per share totalled SEK 36.24 (SEK 0.51) and SEK 35.90 (SEK 0.51), respectively.
• The cash flow from operating activities amounted to SEK 1,009.4 million (SEK 43.0 m).
• Liquid assets and short-term investments at the period end totalled SEK 1,395.6 million (SEK 402.2 m). The royalties from the current quarter are not included in these items.

Significant operational events

During Q4 2014

• A Capital Markets Meeting focusing on the updated company strategy was held on 16 October.
• Medivir presented data from the cathepsin S inhibitor programme for the treatment of neuropathic pain at the 15th World Congress on Pain.
• The launch of the phase II study, IMPACT, for the evaluation of simeprevir in combination with sofosbuvir and daclatasvir in patients with decompensated cirrhosis of the liver was announced.    
• Medivir entered into an agreement with Swedish county councils regarding risk sharing in connection with the treatment of hepatitis C with OLYSIO®. The agreement offers the county councils and Medivir an increased degree of predictability with regard to treatment costs and the use of OLYSIO®.
• The U.S. Food and Drug Administration (FDA) approved OLYSIO® (simeprevir) in combination with sofosbuvir as an all-oral, interferon- and ribavirin-free treatment option.
• Medivir convened an Extraordinary General Meeting on Thursday, 20 November 2014, at which a voluntary share redemption programme for a total of ca. SEK 625 million was approved. The programme will be conducted during the first quarter of 2015.
• MIV-802 was selected as a candidate drug for Medivir’s nucleotide-based polymerase inhibitor project for the treatment of hepatitis C.

After the end of Q4

• Global net sales of OLYSIO® (simeprevir) totalled USD 321 million, USD 256 million of which derived from sales in the USA during the fourth quarter of 2014. Medivir’s royalties amounted to SEK 220.1 million (EUR 23.1 m).
• Medivir announced a reorganisation of the company’s management group effective 1 March 2015.
• The terms and schedule for the voluntary share redemption programme were announced.
• The phase II studies, COMMIT, for the evaluation of simeprevir in combination with daclatasvir and ACCORDION-I for the evaluation of simeprevir in combination with daclatasvir and sofosbuvir, began.
• The Nomination Committee proposed a new Board of Directors, ahead of the 2015 Annual General Meeting.

* All figures refer to the Group, unless otherwise stated. Comparisons in the Interim Report are, unless otherwise stated, with the corresponding period in 2013. Cross Pharma was divested from the Group on 30 June 2013.

The CEO’s statement

Our ongoing hepatitis C research has resulted in a new candidate drug

2014 has been an historic year for Medivir. The most important event was, of course, the launch of OLYSIO®, a new pharmaceutical for the treatment of hepatitis C and which was developed in collaboration with our partner, Janssen. The launch has resulted in substantial income streams for Medivir, both from own pharmaceutical sales within the Nordic region, and in the form of royalty income through our partner, Janssen, from sales in other markets. Royalty income for these sales in the fourth quarter and the year as a whole totalled SEK 220.1 million and SEK 1,399.0 million, respectively. Medivir’s own Nordic market sales of OLYSIO® in the fourth quarter totalled SEK 103.1 million, while sales since the launch in the second quarter of 2014 now amount to SEK 186.4 million.

The global hepatitis C market is an exciting one with an ongoing significant dynamic where only an extremely small propotion of diagnosed patients have received treatment to date. A number of new pharmaceuticals for the treatment of hepatitis C have been introduced, both internationally and on the Nordic market, in 2014, resulting in an increase in the competition faced by OLYSIO®. The Swedish Dental and Pharmaceutical Benefits Agency (TLV) has, however, stated that treatment with OLYSIO® is beneficial from a health economics viewpoint in the treatment of hepatitis C patients, and this past autumn saw a risk-sharing agreement reached between Medivir and the Swedish county councils offering both parties an increased degree of predictability with regard to treatment costs and the use of OLYSIO®. In November, Medivir’s partner, Janssen, presented real-world data for treatment with simeprevir and sofosbuvir, with and without ribavirin. These data were very positive and confirmed the positive results presented in the COSMOS study. The treatment results demonstrate a very high cure rate and a good safety profile, which is a very positive outcome now that competition is growing in the global market.

Our research portfolio is developing according to plan. In December, MIV-802 was selected as a candidate drug from our internal nucleotide-based polymerase inhibitor project for the treatment of hepatitis C and has, in our opinion, every chance of proving a valuable addition to the pharmaceuticals currently available. The project has now entered the non-clinical development phase and we intend to present MIV-802’s antiviral and pharmacokinetic profiles in 2015.

Our in-house development projects are currently conducting important preclinical safety studies. Cathepsin S is a protease that plays an important role in long-term neuropathic pain. In October, we presented data from the project involving our candidate drug, MIV-247, a cathepsin S inhibitor currently in non-clinical development for the oral treatment of neuropathic pain. The results to date are very promising and we look forward to the continued development of a new, effective and safe treatment alternative for the substantial group of patients who suffer from chronic neuropathic pain. MIV-711 is a cathepsin K inhibitor in clinical development for the treatment of osteoarthritis. The positive results we have seen from the initial clinical phase I studies confirm that MIV-711 has the potential to offer disease-modifying treatment of skeletal and cartilage-related diseases such as osteoarthritis.

Nordic pharmaceutical sales have performed well during the quarter. Nordic Brands continued to report stable sales of SEK 53.4 million during the fourth quarter and of SEK 180.0 million during 2014 as a whole. Innovative Specialty Care and Nordic Brands collectively generated sales of SEK 156.6 million during the quarter and of SEK 366.8 million during 2014 as a whole, corresponding to a year on year increase of SEK 190.7 million.  

An Extraordinary General Meeting held in November approved a voluntary share redemption programme for ca. SEK 625 million for which the final terms, approved by the Board of Directors on 30 January 2015, mean that every seventh share will be redeemable for a cash consideration of SEK 140 per share.

We can now put a successful year to rest and look forward to 2015. Medivir will continue to be a research-based pharmaceutical company and will, in order to strengthen and develop our research portfolio, continue to build on our cutting-edge expertise in protease inhibitor design and nucleotide/nucleoside research, with the emphasis on infectious diseases and oncology. We will intensify our activities in the commercial development sphere and within our already strong commercial organisation with the aim of identifying new business opportunities for both our R&D operations and our Nordic pharmaceutical portfolio – activities that will lead to increased value generation and promote long-term profitability.

Niklas Prager
President & CEO
  

For further information, please contact:
Niklas Prager, President & CEO, +46 (0) 8 407 64 30
Ola Burmark, CFO, +46 (0) 725 480 580

Conference call for investors, analysts and the media
The 2014 Financial Statement will be presented by Medivir’s President & CEO, Niklas Prager, and members of the management group.
Time: Friday, 27 February 2015, at 14.00 (CET).

Phone numbers for participants from:
Sweden +46 (0)8 566 426 94
Europe +44 20 342 81431
USA +1 855 753 2236

The conference call will also be streamed via a link on the website: www.medivir.se

Financial calendar:
The 2014 Annual Report will be published on 7 April 2015.
The Annual General Meeting will be held on 5 May 2015.
The Interim Report for January–March 2015 will be published on 5 May.

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