Orexo AB (publ.) – Interim report, January-June 2010

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Key events during the period

• Net revenues amounted to MSEK 65.5 (144.6). 1)
• Cash flow from operating activities was MSEK 11.2 (-74.4).
• Abstral royalty increased to MSEK 19.5 (3.0).
• The loss after tax was MSEK 62.9 (loss: 30.5). The loss per share was SEK 2.69 (loss: 1.38).
• Cash and cash equivalents at the end of the period totaled MSEK 190.9 compared with MSEK 87.4 at the beginning of the period.
• Orexo entered into an alliance and license agreement for new drugs to treat respiratory diseases with Ortho-McNeil-Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica NV (collectively “OMJ”). This agreement will bring a research funding contribution of up to MUSD 21.5 (MSEK 167) over the first three years, including an upfront payment of MUSD 10 (MSEK 77.8) which will cover all future development cost for Orexo. In addition, Orexo will be entitled to total development milestone payments of up to MUSD 564 (MSEK 4,390), plus additional sales milestones for each program.
• Issue of convertible loan of SEK 111,150,000 to Novo A/S completed.

Operations
”In the second quarter of the year, the launch of Abstral continues to be successful. Abstral sales to end customers were up approximately 30% compared to the first quarter of 2010: invoiced sales were up approximately 17 %, measured in number of tablets. Abstral is a leading product for the treatment of breakthrough pain in cancer patients across several major European countries.

The most important occurrence during the period was the announcement of the partnership with Ortho-McNeil-Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica NV, which are a part of the Johnson & Johnson Group. The agreement is not only one of the largest discovery stage license deals ever completed in the international arena but also validates the quality of the work at Orexo, the acquisition of Biolipox AB in 2007  and the communicated strategy to partner pre clinical assets with Big Pharma to reduce cost burdens while retaining major parts of the upside.

Clinical trials with OX219 have been initiated. The aim is to develop a patent-protected sublingual tablet for treatment of opioid dependence, with improved characteristics relative to the current market leader Suboxoneâ which generates revenues of approximately US$1 billion per year. OX219 is also the first program into the clinic in line with our new strategy to develop a proprietary pipeline of specialist products.

Meda AB has informed Orexo that they will further develop the nasal cetirizine NLA product to complement Meda’s allergy product portfolio. The next stage of development of NLA is a clinical phase III program, for which the full cost will be carried by Meda AB.

As previously communicated, the total cost base for 2010 is projected to range between SEK 200-220 million”, says Torbjörn Bjerke, President and CEO.

For the entire report, see enclosed link to pdf.

For further information, please contact:
Torbjörn Bjerke, President and CEO, Phone: +46 708 66 19 90, e-mail: torbjorn.bjerke@orexo.com

Note
Orexo AB publ. discloses the information provided herein pursuant to the Securities Markets Act. The information was provided for public release on August 20, 2010, at 8:00 a.m. 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 take precedence.

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