Interim Report, 1 January – 31 March 2012

Stockholm, Sweden—Today, Medivir AB (OMX: MVIR), a research-based specialty pharmaceutical company focused on infectious diseases, is publishing its Interim Report for the period 1 January – 31 March 2012.*

First quarter 2012

• Net sales were SEK 137.9 (121.6) m
• Profit/loss after tax amounted to SEK -37.7 (52.9) m
• Basic and diluted earnings per share were SEK -1.21 (1.85)
• Cash flow from operating activities amounted to SEK -45.8 (-35.0) m; cash and cash equivalents amounted to SEK 485.6 (645.7) m at the end of the period
• Phase II interferon-free combination trial commenced on TMC435 with Gilead compound GS7977, with and without ribavirin
• Further phase III trials commenced on TMC435 in the very hard-to-treat patient group of previous null responders
• GSK started its OTC launch of Xerclear® in Europe under the Zoviduo and Zovirax Duo brands
• Application to start phase I trials on cathepsin K for treating skeletal disorders filed with the European regulatory authority

Post balance sheet events

• Extended clinical collaboration between our partner Janssen and Bristol-Myers Squibb (BMS) regarding TMC435 and daclatasvir. Apart from interferon and ribavirin-free combination trials on TMC435 in phase II, this collaboration now also covers a phase III program
• The partnership with BMS will involve TMC435 also being evaluated in interferon and ribavirin-free combination trials with BMS’s nucleotide inhibitor BMS-986094 (formerly INX-189)
• Medivir’s partner Janssen has created a new division, Janssen Therapeutics EMEA, whose sole mission is to launch TMC435 in Europe, the Middle East and Africa
• Strong final phase II data on TMC435 on hard-to-treat hepatitis C patients presented at EASL meeting
    
  

CEO’s comment on the first quarter of 2012

“Strong momentum in our operations”

Medivir opened 2012 with continued stable sales of Rx pharmaceuticals. We are seeing a rapid increase in awareness of TMC435 on the Nordic market, with positive feedback from leading clinicians and opinion-leaders. One clear continued trend in the hepatitis C segment is a growing number of new combinations of direct-acting antivirals to replace interferon and ribavirin. TMC435 is an important component in the development of these new and superior treatment regimens. TMC435 is part of a large number of newly commenced and planned combination trials aimed at obtaining an interferon and ribavirin-free treatment regimen, which ultimately, could be a major improvement for patients.

Our internal preclinical hepatitis C projects are taking clearer form and are heading towards the designation of clinical candidate drugs (CDs). We also have a new CD heading for clinical phase 1, MIV-711, a cathepsin K inhibitor for treating skeletal disorders.

The company’s business operations
The Pharmaceuticals business area
The Pharmaceuticals business area includes the group’s research and development portfolio, the cold sore pharmaceutical Xerclear® and original pharmaceuticals owned by BioPhausia. The original pharmaceuticals continued to achieve stable sales and good profitability margins in the first quarter, which is consistent with this product range’s seasonal pattern. The most important products are Mollipect, Citodon and Lithionit. Net sales for the first quarter from pharmaceuticals sales were SEK 46.3 (-0.2) m. EBITDA was SEK -34.1 (51.9) m. EBITDA includes research and development costs of SEK -46.7 (-57.4) m.

In February, Medivir’s partner GlaxoSmithKline started its European OTC launch of Medivir’s in house-developed cold sore pharmaceutical Xerclear®. This launch, under the Zoviduo and Zovirax Duo brands, is in five European countries initially, where the pharmaceutical is approved for OTC sale.

Parallel imports in Cross Pharma
Sales continued to grow for the sixth consecutive quarter, to SEK 91.6 (-) m, and EBITDA for the period was SEK 4.2 (-) m. Investments in the fourth quarter 2011 set a good foundation for Cross Pharma’s future extension of its product range.

R&D
TMC435—Medivir’s protease inhibitor in clinical phase III for treating hepatitis C (HCV)
Medivir’s CD TMC435, a protease inhibitor administered in a single daily dose for treating hepatitis C, is in late clinical phase III. Apart from previously commenced ongoing phase III trials enrolling some 1,500 patients, in the first quarter, our partner Janssen commenced another two phase III trials. The first will compare the efficacy of TMC435 with marketed protease inhibitor Telaprevir, both administered in addition to interferon/ribavirin. This trial is being conducted on hard-to-treat patients that have not responded to standard of care (SoC). The second trial is designed to examine the efficacy and safety of TMC435 in patients with HCV infection of genotype 4. The previously commenced combination trials with other companies’ experimental drugs are progressing as planned and will offer guidance on how therapies should be optimized. Like our partner Janssen, we are very hopeful that TMC435 will constitute a lasting and central component in forthcoming interferon-free combination therapies against HCV.

After the end of the quarter, our partner Janssen and BMS entered further important strategic development agreements. These agreements are one of several strategies used to examine TMC435 in interferon and ribavirin-free therapies, which we regard as highly important to the onward development of HCV treatment. An extended clinical collaboration between Janssen and BMS was announced in April, which will evaluate the efficacy of TMC435 in combination trials on two different BMS compounds. In the first interferon and ribavirin-free trial, a joint phase II trial with BMS, Janssen will study the efficacy of TMC435 and daclatasvir on patients with HCV genotype 1. The clinical evaluation of TMC435 in combination with BMS nucleotide polymerase inhibitor BMS-986094 (formerly INX-189) is also planned.

In April, Janssen presented the formation of an all-new division, Janssen Therapeutics EMEA, headquartered in Belgium, whose mission is to launch TMC435 in Europe, the Middle East and Africa. Thus our partner has laid the foundation for a clear and focused launch strategy for TMC435 in these regions. We will be marketing and selling TMC435 ourselves in the Nordics.

Final data for TMC435 from the ASPIRE phase II trial on treatment-experienced patients was presented at the EASL meeting in April. The results gained a positive reception from leading clinicians and showed that TMC435 is very effective on these hard-to-treat patients, including patients with cirrhosis of the liver. These results underscore the strong therapeutic profile TMC435 enjoys and demonstrate that TMC435 has good prospects of also serving as a central component in the future HCV combination therapies.

Hepatitis C projects in-house
Medivir made major advances in the quarter in our proprietary preclinical hepatitis C projects, primarily Medivir’s nucleotide projects. These projects, which are heading towards the designation of a CD are currently being run entirely in-house, and in strategic terms will be managed to create optimal value for Medivir.

Cathepsin K
Cathepsin K is progressing towards clinical trials. An application was filed in the quarter to start clinical phase I trials on in house-developed CD MIV-711. This molecule is a cathepsin K inhibitor, designed to treat skeletal disorders such as osteoporosis and osteoarthritis. The trial will commence as soon as permits are secured from the regulatory authorities, expected in the near future. Phase I data will be used to enable outlicensing of this project.

Maris Hartmanis
CEO and President

For more information, please contact:
Rein Piir, EVP Corporate Affairs & IR, direct tel: +46 (0)8 440 6550, mobile: +46 (0) 70 853 7292
Maris Hartmanis, CEO, switchboard: +46 (0)8 407 6430

Conference call for investors, analysts and the media
The Interim Report for the first quarter 2012 will be presented by the CEO, Maris Hartmanis, and members of Medivir’s management.

Time: 10 a.m. (CET) on Thursday, 10 May 2012

Participant telephone numbers:
Sweden       +46 (0)8 505 204 24
Europe        +44 (0) 20 3003 2666
USA            +1 866 966 5335 

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

Financial information in 2012
The Annual General Meeting will be held on 10 May at 2 p.m.
The Interim Report for January-June will be published on 23 August
The Interim Report for January-September will be published on 20 November