Galenica achieves new record results: Double-digit profit growth for the 16th consecutive year

Over the past 16 years, Galenica has steadily transformed itself from a wholesaler into an internationally active healthcare group. The Group is now at the start of a five-year period during which several strategic projects of major importance for the company’s future will be carried out. To implement these projects successfully, Galenica is relying on its proven, long- term strategy and its entrepreneurial culture, as well as its first-class pharmaceutical expertise, which was significantly strengthened with the appointment of David Ebsworth as Galenica Group CEO as of 1 January 2012.

Galenica Group
In 2011, Galenica generated consolidated net sales of CHF 3,187.4 million, a 2.7% increase over the previous year.

This resulted in earnings before interest, taxes, depreciation and amortisation (EBITDA) of CHF 399.4 million. The decline of 9.8% over the previous year was due to significant negative currency effects and the anticipated decline in licence fee income from CellCept to CHF 120.5 million (2010: CHF 187.5 million). Galenica invested CHF 130.4 million in research and development, and investments in tangible and intangible assets totalled CHF 60.4 million in 2011 (2010: CHF 71.2 million).

Earnings before interest and taxes (EBIT) increased by 1.3% to CHF 327.1 million. Adjusted for currency effects, EBIT increased by 7.2%.

Consolidated net profit (before minority interests) rose by 10.9% to CHF 255.6 million. Adjusted for currency effects, this increase was 17.9% and, after deducting minority interests, consolidated net profit was up by approximately 5%.

Shareholder equity continued to grow to CHF 1,202.6 million (+29.0%), increasing the equity ratio to 38.6%, while net borrowings decreased by 25.2% to CHF 708.8 million. Subsequently, gearing fell significantly from 102% to 59%.

Pharma
Net sales of the Pharma business sector grew by 1.0% to CHF 584.3 million. Adjusted for currency effects, the increase was 8.4%.

Investments in R&D totalled CHF 123.7 million and supported clinical studies for the filing of PA21 in the USA and Europe, as well as projects that promoted scientific evidence of the efficacy of Ferinject®. Additional resources were used to establish subsidiaries and the international distribution network for marketing Ferinject®. Adjusted for these factors, the Pharma business sector generated earnings before interest and taxes (EBIT) of CHF 254.4 million (+1.1%).

Iron and prescription drugs (Rx)
Sales of Ferinject® increased by 23.0% to CHF 85.7 million (+32.1% in local currency), while Venofer® achieved sales of CHF 167.1 million (-9.5%, +1.9% in local currency). The considerable weakness of the US dollar and euro and adjustments targeted at lowering healthcare costs in some markets had a negative impact on sales growth. The increase in the number of units (100 mg) of Ferinject® sold (+44%) was, however, very pleasing: growth in the Netherlands was 262%, in the UK 76%, in the Nordic countries 46%, in Germany 41% and in Spain 31%. Ferinject® was also launched very successfully in France, which after only one year is now the fourth-largest market for Ferinject®.

The preliminary results from PREFER, a study in women with iron deficiency without anaemia, are now available and demonstrate that the statistically defined endpoint was met. The results are currently being analysed and will be published this year. By the end of 2011 more than 6,600 patients had been treated with Ferinject® within the framework of the clinical trial programme. This is believed to be the largest clinical evidence base for intravenous iron in different therapeutic areas.

The business activities of Vifor Fresenius Medical Care Renal Pharma were approved by European Union and Swiss competition authorities in October 2011. In early November, the nephrology market-ing and sales rights to Ferinject® and Venofer® and all rights to PA21 were transferred to Vifor Fresen-ius Medical Care Renal Pharma for Europe and other regions. With the start of operations, sales teams representing Vifor Fresenius Medical Care Renal Pharma began calling on customers in 15 countries, who now interact with a single sales team offering a full portfolio of nephrology pharmaceutical products. This means that more than 225,000 patients can more easily and rapidly access the complete range of products of Vifor Fresenius Medical Care Renal Pharma.

The development of the phosphate binder PA21 is proceeding according to plan, with good support from Fresenius Medical Care. A New Drug Application is expected to be submitted to the US Food and Drug Administration (FDA) and the European health authorities in the fourth quarter of 2012. Japanese partner Kissei Pharmaceutical has also made impressive progress in the clinical develop-ment of PA21 for Japanese patients and has successfully completed its Phase I trial and initiated a Phase II trial. Japan is the second-largest dialysis market in the world.

Other iron products grew by 14.2% (+19.7% in local currency) to CHF 62.3 million, led by Maltofer® which recorded an substantial increase of 20.3% (in local currency +26.9%), both in Switzerland (+18.9%) and in major international markets such as Russia (+102.1%) and Brazil (+16.1%).

Sales of other prescription products grew by 13.6% to CHF 47.8 million (+17.3% in local currency).

Infectious Diseases/OTX
The Infectious Diseases/OTX franchise achieved a slight increase in sales of its products, despite negative market factors and currency effects. The four best-selling products all grew in local currency terms, particularly Uro-Vaxom®, which grew by 19.9% to CHF 12.7 million (in local currency +27.7%). Sales of Broncho-Vaxom® grew by 3.6% in local currency to CHF 47.8 million (-2.4%).

Contact
Galenica AG Untermattweg 8 3027 Bern Tel. 058 852 81 11 Fax 058 852 81 12

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