LEIDEN, NETHERLANDS--(Marketwire - August 17, 2010) -
PRESS RELEASE
Crucell Reports Record Revenues in Second Quarter 2010
Total revenues and other operating income of EUR128.6 million, a 63% growth compared to the same period in 2009 (EUR78.7 million).
Strong sales of Quinvaxem® drive record second quarter revenues.
Operating profit of EUR13.1 million compared to EUR3.2 million in Q2 2009.
Net profit of EUR9.2 million compared to net loss of EUR1.8 million in Q2 2009.
Undiluted EPS of EUR0.11 compared to minus EUR0.03 in the same quarter of 2009.
2010 Revenue Guidance Increased
As a result of strong sales in the first half of the year, we expect total revenues and other operating income[1] for the full year to exceed 2009 levels.
Leiden, the Netherlands (August 17, 2010) - Dutch biopharmaceutical company Crucell N.V. (NYSE Euronext, NASDAQ: CRXL; Swiss Exchange: CRX) today announced its financial results for the second quarter of 2010, based on International Financial Reporting Standards (IFRS). These financial results are unaudited.
Business Highlights:
* Crucell announced the award from UNICEF of an additional $110 million to supply its paediatric vaccine Quinvaxem® to the developing world. This latest order brings the overall value of tenders awarded to Crucell for the period of 2010-2012 to $410 million. This is in addition to the $500 million obtained over the tender period 2007-2009. They bring the total value of contracts awarded since the launch of Quinvaxem® at the end of 2006 to $910 million.
* Crucell and sanofi pasteur reached an agreement on a series of transactions to restructure their long standing partnership. Crucell waived its right to terminate an existing license agreement between Crucell Switzerland and sanofi pasteur’s subsidiary Shantha Biotechnics Limited (Shantha) for the development of paediatric vaccines, based on Haemophilus influenzae b. Sanofi pasteur returned the commercial rights to Crucell that sanofi pasteur held under an exclusive license agreement for the development and commercialization of a cell-based influenza vaccine (FluCell), based on Crucell’s PER.C6® technology.
* Crucell announced its intention to participate in a Phase I clinical trial in the United States and Africa of a combination of two AdVac®- based AIDS vaccine candidates, Ad26.ENVA.01 and Ad35-ENV, in healthy adults who are not infected with HIV. The clinical trial, which will be led by the International AIDS Vaccine Initiative (IAVI), represents a collaboration between IAVI, Crucell, the Ragon Institute, and Beth Israel Deaconess Medical Center (BIDMC), a major teaching hospital of Harvard Medical School.
* Crucell announced the start of a new Phase I clinical study in Burkina Faso of its AdVac®-based malaria vaccine vector. This is the first study evaluating the safety and immunogenicity of this AdVac®-based malaria vaccine vector candidate in a population residing in a malaria endemic area.
* Crucell announced that it has signed a binding letter of agreement with GlaxoSmithKline Biologicals (GSK) to collaborate on developing a second generation malaria vaccine candidate.
* Crucell and the Aeras Global TB Vaccine Foundation announced the start of a Phase II clinical trial of the jointly developed tuberculosis vaccine candidate AERAS-402/Crucell Ad35 in with HIV infected adults.
* First test runs at the new vaccine manufacturing facility in Incheon, Korea started in May. The test runs are progressing according to plan. The new facility will enable the further growth and highly efficient production of Quinvaxem® and Hepavax-Gene®, with a capacity of over 100 million doses annually.
* In the second quarter of 2010 Crucell signed four license/vendor agreements, including agreements with NeoPharm Co. Ltd and Yeda Research and Development Company Ltd.
* During the Company’s AGM held on June 4, 2010 in Leiden, Mr. J.P. Oosterveld was reappointed as Chairman of the Supervisory Board; Mr. W. Burns, Mr. J. Shannon and Mr. G. Siber were appointed as new members of the Supervisory Board.
Financial Highlights:
* The Company announced combined total revenues and other operating income of EUR128.6 million, compared to EUR78.7 million in the second quarter of 2009, a 63% growth. The increase was driven by a 60% growth in product sales, and tripling of license revenues.
* Product sales were EUR106.1 million, representing sales of paediatric vaccines (73%), travel and endemic vaccines (23%), and other products (4%).
* License revenues were EUR10.4 million in the second quarter, compared to EUR3.5 million in the second quarter of 2009.
* Gross margins were 36%, compared to 39% in the second quarter of 2009. Gross margins were negatively influenced by foreign exchange differences.
* Research and development expenses increased to EUR23.3 million, compared to EUR15.9 million in the second quarter of 2009.
* More than a threefold increase of operating profit from EUR3.2 million in the second quarter of 2009 to EUR13.1 million in this quarter.
* Net profit of EUR9.2 million for the second quarter of 2009, compared to a net loss of EUR1.8 million in the second quarter of 2009. Net profit per share of EUR0.11, compared to a net loss per share of EUR0.03 in the same period of 2009.
* Cash used in operating activities was largely in line with the same period of 2009 at EUR6.9 million.
* Cash used in investing activities amounted to EUR14.4 million, which mainly includes investments in life-cycle management, in property, plant and equipment, and IT investments.
* To strengthen our balance sheet even further, we repaid financial leases bringing net cash used in financing activities in the quarter to EUR16.5 million, up from EUR0.3 million in the same period of 2009.
* Cash and cash equivalents decreased by EUR36.6 million during the second quarter to EUR245.5 million. Short term financial assets include deposits with maturities over 90 days for an amount of EUR100.0 million, bringing quarter-end cash and cash equivalents to EUR345.5 million.
* On April 7th, 2010 Crucell filed its 2009 Annual Report and Form 20 F.
Key Figures: (EUR million, except net result per share)
-------------------------------------------------------------------------- Second Quarter Half Year -------------------------------------------------------------------------- 2010 2009 2010 2009 unaudited unaudited Change unaudited unaudited Change -------------------------------------------------------------------------- Total revenues and other operating 128.6 78.7 63% income 194.3 152.4 27% 13.1 3.2 313% Operating profit 8.8 5.6 57% 9.2 (1.8) Net profit/(loss) 6.9 (1.6) Net result per share 0.11 (0.03) (basic) 0.09 (0.02)
Crucell’s Chief Executive Officer Ronald Brus said:
“Our most important paediatric vaccine, Quinvaxem®, showed stellar growth in the second quarter. With significant growth in overall product sales and license revenues we expect total revenues and other operating income[2] for the full year to exceed 2009 levels.
We continue to build on our strong track record by delivering high- quality and safe vaccines to protect millions of children and adults around the globe from life-threatening diseases.
In line with our strategy, we continue to make significant investments in Research & Development to bring much-needed innovative solutions to global health, whilst maintaining a healthy profit.
In another important development during the second quarter, we reached an agreement with sanofi pasteur that returns full control of our cell- based influenza vaccine program to Crucell. This enables us to move full steam ahead with development, with the aim of applying for licensure in 2014.”
Product Sales Update:
Product sales in the second quarter of 2010 increased 60% over the same quarter in 2009 to EUR106.1 million and represent sales of paediatric vaccines (73%), travel and endemic vaccines (23%), and other products (4%). The increase in product sales was a result of very strong sales of our paediatric and travel vaccines.
Paediatric vaccines
Due to the phasing of Quinvaxem(® )sales from the first into the second quarter, as well as additional demand from UNICEF, second quarter product sales reached a record high. We expect a lasting positive impact on demand for Quinvaxem® as the World Health Organization (WHO) has withdrawn the prequalification of one competing liquid pentavalent vaccine.
Travel and endemic vaccines
Epaxal® sales in the second quarter of 2010 increased significantly compared to the same quarter of last year. We continue to see progress in upscaling the production process, required to prepare for introduction of Epaxal® in the US.
Respiratory vaccines
In the absence of another pandemic threat, the overall demand for seasonal respiratory vaccines like Crucell’s influenza vaccine Inflexal® V will be below last year’s levels.
Research & Development Highlights:
* Human Monoclonal Antibodies against a broad range of Influenza strains (pre-clinical): In September 2009 Johnson & Johnson (JNJ), through its subsidiary Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Crucell entered into a strategic collaboration for the development and commercialization of a universal monoclonal antibody product (flu-mAb) for the treatment and prevention of influenza. An important activity in the development of this flu-mAb has been the first production of this antibody product in a mobile and fully disposable FlexFactory®. In addition the strategic collaboration involves four innovative discovery programs focusing on the development and commercialization of a universal influenza vaccine as well as vaccines directed against three other infectious and non-infectious disease targets - one of which is RSV (see below). Activities for the universal influenza vaccine, which started in January, are ongoing. The universal influenza vaccine will be designed based on specific epitopes of our broadly cross-neutralizing influenza antibodies. The selection of the other innovation targets is ongoing.
* Universal Respiratory Syncytial Virus (RSV) Vaccine (pre-clinical): In June Crucell announced the start of a discovery program leading to the development and commercialization of a universal RSV vaccine. The RSV vaccine will be designed to prevent severe infections with the most common RSV strains in infants and the elderly. RSV is the most important cause of viral lower respiratory illness in infants and children. RSV-induced disease is the last of the major paediatric diseases for which no preventive vaccine is available. Current prevention in developed countries is based on the administration of an RSV-neutralizing antibody, which is given to high- risk infants, in particular premature newborns. RSV also induces severe disease in immunocompromized adults and elderly with weak immune systems, for whom the costly antibody is not available. This discovery program is part of the strategic collaboration with JNJ (mentioned above).
* Influenza - Seasonal Influenza Vaccine: Crucell and sanofi pasteur reached an agreement on a series of transactions to restructure their long standing partnership. As part of the agreement sanofi pasteur returned to Crucell the commercial rights they held under an exclusive license agreement for the development and commercialization of a cell-based influenza vaccine (FluCell). The exclusive license, agreed upon in December 2003, left Crucell with the marketing rights for FluCell in Japan only. With the return of the world-wide marketing rights, Crucell has commenced with the development of a cell-based influenza vaccine. The introduction of cell-based Inflexal® V will be the next important step for Crucell’s respiratory franchise. Combining Crucell’s high density PER.C6® production system with the company’s proprietary virosomal technology creates a cutting-edge method to produce Inflexal® antigens both at large scale, at very competitive cost levels and earlier in the season. Crucell expects to apply for licensure in 2014.
* AIDS/HIV Vaccine (Phase I): In April 2008, Crucell announced the start of a Phase I clinical study of the novel recombinant HIV vaccine. The vaccine is based on Crucell’s AdVac® and PER.C6® technologies, using adenovirus serotype 26 (rAd26) as vector, and is jointly developed by Crucell and the BIDMC, funded by a grant from the US National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health. The rAd26 vector is designed to avoid pre-existing neutralizing antibodies to the more commonly used adenovirus serotype 5 (Ad5). Phase I clinical studies are being conducted at the Brigham and Women’s Hospital in Boston, USA and are focused on assessing the safety and immunogenicity of the vaccine in several trials including single and multi-dose regimens. In October 2009, preliminary results of the Phase I study were presented at La Conférence AIDS Vaccine 2009 in Paris, France. The presentation was given by Dr Dan H. Barouch, MD, PhD, Associate Professor of Medicine, Division of Vaccine Research, Department of Medicine, BIDMC, Boston, USA. The preliminary results of this study show that a 3-dose regimen of this HIV candidate vaccine is safe and immunogenic.
In August 2010 Crucell announced its intention to participate in an international Phase I clinical trial in the United States and Africa of a combination of two AdVac®-based AIDS vaccine candidates, Ad26.ENVA.01 and Ad35-ENV, in healthy adults who are not infected with HIV. The clinical trial, which will be led by the International AIDS Vaccine Initiative (IAVI), represents a collaboration between IAVI, Crucell, the Ragon Institute, and Beth Israel Deaconess Medical Center (BIDMC), a major teaching hospital of Harvard Medical School.
The Ad26.ENVA.01 vaccine candidate used in this study is manufactured by Crucell, while the Ad35-ENV vaccine is developed by IAVI. Both vaccines candidates are based on Crucell’s proprietary AdVac® technology. The planned Phase 1 trial of the vaccine combination, which follows a Phase I trial of the Ad35-ENV vaccine by IAVI and a Phase I trial of Ad26.ENVA.01 by the Harvard-Crucell consortium, supported by the National Institute of Allergy and Infectious Diseases (NIAID), represents a key step towards proof of concept studies to evaluate the efficacy of the vaccine combination in humans.
* Tuberculosis Vaccine (Phase II): To date, data from all AERAS- 402/Crucell Ad35 trials support the immunogenicity and acceptable safety profile of the TB candidate vaccine at all dose levels evaluated.
- In April 2010 Crucell and Aeras announced the start of a Phase II clinical trial of AERAS-402/Crucell Ad35. The Phase II study is designed to test the safety and efficacy of AERAS-402/Crucell Ad35 in adults infected with HIV and is being conducted by the Aurum Institute in Klerksdorp, South Africa. The first group of participants has been enrolled and dosed, and there have been no serious adverse events reported to date.
* Malaria Vaccine (Phase I): In December 2009 boost vaccinations for the final group of volunteers of a Phase I trial in the USA have been completed. Analysis of unblinded safety data revealed a good safety profile. Available immunogenicity data indicate that the Ad35-CS vector induces humoral and cellular responses.
A Phase I clinical study is currently ongoing in Burkina Faso. Crucell is developing its malaria vaccine vector in collaboration with the NIAID/NIH, the Centre National de Recherche et de Formation sur le Paludisme’ (CNRFP) in Burkina Faso, and the Noguchi Memorial Institute for Medical Research at the University of Ghana.
In April 2010 Crucell announced that it has signed a binding letter of agreement with GlaxoSmithKline Biologicals (GSK) to collaborate on developing a second generation malaria vaccine candidate. Pre-clinical data from earlier studies indicated significantly enhanced immune responses against the malaria parasite (circumsporozoite stage of the Plasmodium falciparum) when Crucell’s AdVac® technology and GSK’s RTS,S/AS technology are used in combination, versus either component alone.
Korean Production Facility:
In October 2008 Crucell announced that an agreement was reached to relocate Crucell’s Korean production facility from the Shingal site in Yongin City, Korea to the Incheon Free Economic Zone, Korea. Construction activities at the new site started in December 2008 and technical completion was reached within 13 months. First test runs started in May 2010 and are progressing according to plan. The test runs with the Hepatitis B production process have shown a good comparability between the batches produced in Incheon and the product produced in the past. The results of the comparability study for Quinvaxem® are expected in the third quarter of 2010. The new facility will enable the further growth and highly efficient production of Quinvaxem® and Hepavax- Gene®, with a capacity of over 100 million doses annually.
Manufacturing & Licensing Agreements:
* Crucell today announces that South Korean-based NeoPharm Co. Ltd., signed a PER.C6(® )research license agreement for the development of undisclosed recombinant proteins and antibodies. Financial details of the agreement were not disclosed. [April 2010]
* Crucell also signed two additional PER.C6(® )research license agreements with undisclosed companies for the development of recombinant proteins and antibodies.
* Crucell today announces that Israel-based Yeda Research and Development Company Ltd, the Technology Transfer Company of the Weizmann Institute of Science, signed an exclusive license agreement for the development of antibodies against Hepatitis B. Under the terms of the agreement Crucell will further develop the antibodies discovered from a technology invented by the group headed by Prof. Yair Reisner at the Weizman Institute of Science. Crucell will have the exclusive rights to evaluate Yeda’s panel of antibodies in-house and has the option to trigger a worldwide commercial license. Financial details of the agreement were not disclosed. [May 2010]
Patents:
In Q2 2010 Crucell was granted a total of 109 patents, including patents for:
* Aspects of PER.C6® recombinant adenovirus technology, in Hong Kong
* Aspects of PER.C6® protein expression technology, in Europe and the U.S.
* Different aspects of improved adenoviral AdVac® vectors, in Japan, in the U.S. and in New Zealand
* Antibodies against, and technology relating to, virus that causes SARS, in Europe, in the U.S. and in New Zealand
* Elements of STARTM technology, in Europe, in Japan and in the U.S.
* Antibodies against rabies, in the Philippines, in Mexico and in the U.S.
* Adenovirus vaccines against tuberculosis, in New Zealand
* Aspects of adenovirus manufacturing technology, in Japan and in the U.S.
Nominations:
During the Company’s AGM held on June 4, 2010 in Leiden, shareholders reappointed Mr. J.P. Oosterveld as Chairman of the Supervisory Board. In addition, Mr. W. Burns, Mr. J. Shannon and Mr. G. Siber were appointed as new members of the Supervisory Board.
Financial Review Second Quarter 2010
Total Revenues and Other Operating Income The Company announced combined total revenues and other operating income of EUR128.6 million, compared to EUR78.7 million in the second quarter of 2009. The increase was driven by a 60% growth in product sales, and tripling of license revenues.
Product sales in the second quarter of 2010 increased to EUR106.1 million and represent sales of paediatric vaccines (73%), travel and endemic vaccines (23%), and other products (4%).
License revenues were EUR10.4 million in the second quarter, an increase of EUR6.9 million compared to the second quarter of 2009. The increase is mainly due to the recognition of revenues from the JNJ collaboration which was signed in September 2009.
Service fees for the quarter were EUR0.3 million, compared to EUR2.5 million in the same quarter of 2009. Service fees represent revenues for product development activities performed under contracts with partners and licensees.
Other operating income was EUR11.9 million for the quarter, compared to EUR6.3 million in the second quarter of 2009, reflecting a higher level of R&D reimbursements and one-time transactions.
Cost of Goods Sold
Cost of goods sold for the second quarter of 2010 amounted to EUR74.5 million. EUR74.2 million represents product costs; and EUR0.3 million the cost of service and license activities.
Gross margins were 36%, compared to 39% in the second quarter of 2009. Gross margins were negatively influenced by foreign exchange differences.
Expenses
Total expenses consisted of research and development (R&D) expenses, marketing and sales (M&S) and general and administrative (G&A) expenses. Total expenses for the second quarter were EUR41.0 million, representing a EUR10.0 million increase over the same period in 2009.
R&D expenses for the second quarter amounted to EUR23.3 million, representing an increase of EUR7.4 million versus the second quarter of 2009.
SG&A expenses for the quarter were EUR17.7 million compared to EUR15.1 million in the second quarter of 2009. This increase was mainly due to higher direct marketing and sales expenses, IT project expenses and one-time effects.
Operating profit was EUR13.1 million in the second quarter of 2010 compared to EUR3.2 million in the same quarter of 2009.
The company recorded a EUR5.5 million income tax charge in the second quarter of 2010. The income tax charge relates mainly to taxable income in Korea, Switzerland, Sweden and the US.
Net Result
Net result of EUR9.2 million was reported in the second quarter of 2010 versus a net loss of EUR1.8 million in the same quarter of 2009. Net result per share in the second quarter of 2010 is EUR0.11, compared to a net loss per share of EUR0.03 in the same period of 2009.
Balance Sheet
Tangible fixed assets amounted to EUR229.1 million on June 30, 2010. Intangible assets amounted to EUR83.3 million, including acquired in-process research and development, developed technology, patents and trademarks, the value of customer and supplier relationships, and capitalized IT investments.
Investments in associates and joint ventures amounted to EUR15.0 million and mainly represent investments in AdImmune and the PERCIVIA PER.C6® Development Center. Crucell’s investment in Galapagos NV is classified under available-for-sale investments.
Total equity on June 30, 2010 amounted to EUR798.2 million. A total of 81.7 million ordinary shares were issued and outstanding on June 30, 2010.
Cash Flow and Cash Position
Cash and cash equivalents decreased by EUR36.6 million during the second quarter to EUR245.5 million. Short term financial assets include deposits with maturities over 90 days for an amount of EUR100.0 million, bringing quarter-end cash and cash equivalents to EUR345.5 million.
Net cash used in operating activities in the second quarter of EUR6.9 million was in line with the same quarter of 2009.
Cash used in investing activities amounted to EUR14.4 million, which includes investments in life-cycle management, in property, plant and equipment, and IT investments.
To strengthen our balance sheet even further, we repaid financial leases bringing net cash used in financing activities in the quarter to EUR16.5 million, up from EUR0.3 million in the same period of 2009.
+-------------------------------------------------------------------------+ |2010 guidance: | | | | * As a result of strong sales in the first half of the year, we expect | | total revenues and other operating income[3] for the full year to | | exceed 2009 levels | | * We continue to use our strong operating cash flow to accelerate | | product development | | * R&D spending is expected to increase by over one-third | | * Maintain a healthy operating profit | | | | | +-------------------------------------------------------------------------+
Annual Report
Crucell N.V. has filed our 2009 Annual Report and Form 20-F with the U.S. Securities and Exchange Commission as well as published our Statutory Annual Accounts for the year 2009 on April 7, 2010.
+-------------------------------------------------------------------------+ |Conference Call and Webcast | |August 17, 2010, at 14:00 Central European Time (CET), Crucell’s | |management will conduct a conference call, which will also be webcast. | |To participate in the conference call, please call one of the following | |telephone numbers 15 minutes prior to the event: | | | | +44 20 7806 1956 for the UK; | | +1 212 444 0413 for the US; and | | +3120 707 5511 for the Netherlands | | | |Following a presentation of the results, the lines will be opened for a | |question and answer session. | |The live audio webcast can be accessed via the homepage of Crucell’s | |website at www.crucell.com and will be archived and available for replay | |following the event. | +-------------------------------------------------------------------------+ About Crucell
Crucell N.V. (NYSE Euronext: CRXL) (NASDAQ: CRXL) (SWISS: CRX) is a global biopharmaceutical company focused on research development, production and marketing of vaccines, proteins and antibodies that prevent and/or treat infectious diseases. In 2009 alone, Crucell distributed more than 115 million vaccine doses in more than 100 countries around the world, with the fast majority of doses (97%) going to developing countries. Crucell is one of the major suppliers of vaccines to UNICEF and the developing world. Crucell was the first manufacturer to launch a fully-liquid pentavalent vaccine. Called Quinvaxem®, this innovative combination vaccine protects against five important childhood diseases. Over 130 million doses have been sold since its launch in 2006 in more than 50 GAVI countries. With this innovation, Crucell has become a major partner in protecting children in developing countries. Other products in Crucell’s core portfolio include a vaccine against hepatitis B and a virosome-adjuvanted vaccine against influenza. Crucell also markets travel vaccines, such as an oral anti-typhoid vaccine, an oral cholera vaccine and the only aluminum-free hepatitis A vaccine on the market. The Company has a broad development pipeline, with several product candidates based on its unique PER.C6® production technology. The Company licenses its PER.C6® technology and other technologies to the biopharmaceutical industry. Important partners and licensees include Johnson & Johnson, DSM Biologics, sanofi-aventis, Novartis, Wyeth, GSK, CSL and Merck & Co. Crucell is headquartered in Leiden, the Netherlands, with offices in China, Indonesia, Italy, Korea, Malaysia, Spain, Sweden, Switzerland, UK, the USA and Vietnam. The Company employs over 1300 people. For more information, please visit www.crucell.com.
Forward-looking statements
This press release contains forward-looking statements that involve inherent risks and uncertainties. We have identified a number of important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For information relating to these factors please refer to our Form 20-F, as filed with the US Securities and Exchange Commission on April 7, 2010, in the section entitled ‘Risk Factors’. The Company prepares its financial statements under International Financial Reporting Standards (IFRS).
Financial Calendar 9 November 2010 Q3 Results 2010 15 February 2011 Q4/FY Results 2010 For further information please contact Crucell: Oya Yavuz Vice President Corporate Communications & Investor Relations Tel. +31 (0)71 519 7064 ir@crucell.com www.crucell.com
Financial Half Year 2010 Report
This report contains the half year financial report of Crucell N.V. (‘Crucell’, or the ‘Company’), a company with limited liability, headquartered in Leiden, the Netherlands. The Company and its subsidiaries together constitute the Crucell Group or the ‘Group’. The principal activities of the Group are described in note 1.1 of the condensed consolidated interim financial statements.
The half year financial report for the six months ended June 30, 2010 consists of the condensed consolidated interim financial statements, the half year management report and responsibility statement by the Company’s Management board. The information in this half year financial report is unaudited.
The condensed consolidated interim financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company’s consolidated IFRS financial statements for the year ended December 31, 2009.
Financial Review Ha
