Recordati S.p.A: Very Good First 9 Months 2011 Results; Sales +5.8%; Net Income +5.8%; Interim Dividend Policy Approved

MILAN, ITALY--(Marketwire - October 25, 2011) -

* Consolidated revenue EUR 580.6 million, + 5.8%.

* Operating income EUR 128.9 million, + 4.1%.

* Net income EUR 92.0 million, + 5.8%.

* Net financial position*: net debt of EUR 29.3 million.

* Procto-Glyvenol® acquired from Novartis Consumer Health

* Initial launches in Europe of Livazo® (pitavastatin)

* Extension of the use of Carbaglu® (carglumic acid) to treat hyperammonaemia due to one of the three main organic acidemias approved in Europe

* Acquisition of the Turkish pharmaceutical company Frik Ilac

* A policy for the distribution of an interim dividend was approved.

Milan, 25 October 2011 - The Board of Directors of Recordati S.p.A. approved the Group’s consolidated results for the first nine months 2011 prepared in accordance with International Accounting Standards and International Financial Reporting Standards (IAS/IFRS) and in particular as per IAS 34 requirements for interim reporting. These financial statements will be available today at the company’s offices, at Borsa Italiana S.p.A. and on the company’s website: http://www.recordati.com/rec_en/investors/reports/

Financial highlights

* Consolidated revenue in the first nine months 2011 is EUR 580.6 million, up by 5.8% compared to the same period of the preceding year. Pharmaceutical sales are EUR 558.6 million, an increase of 5.5%.

* Operating income, at 22.2% of sales, is EUR 128.9 million, an increase of 4.1% over the same period of the preceding year. Selling expenses increase by 7.8% mainly to support the launch of the new products.

* Net income at 15.9% of sales is EUR 92.0 million, an increase of 5.8%, higher than that recorded by operating income thanks to lower interest expenses and a lower tax rate.

* Net financial position*at 30 September 2011 records a net debt of EUR 29.3 million following the acquisition of the Turkish company Frik Ilac and of the new product Procto-Glyvenol® in addition to the payment of the 2010 dividend. Shareholders’ equity increases to EUR 606.3 million.

* Cash and short-term financial investments net of bank overdrafts and medium/long-term loans which include the measurement at fair value of hedging derivatives (fair value hedge).

Business development news

The marketing authorizations, the brand and the rights to the product Procto- Glyvenol® were acquired from Novartis Consumer Health for the following countries: Poland, Russia, Turkey, Romania, Czech Republic, Slovakia, Ukraine, Portugal, the Baltic countries and Cyprus. Procto-Glyvenol® is indicated for the localized treatment of internal and external hemorrhoids and is currently on the market in the countries included in the agreement.

The European roll-out of Livazo® (pitavastatin) started with its launches in Spain, by Recordati España and its co-marketer Esteve, and in Portugal, by Jaba Recordati and its co-marketer Delta. Pitavastatin, 1mg, 2mg and 4mg tablets, is a novel statin indicated for the reduction of elevated total and LDL cholesterol in adult patients with primary hypercholesterolaemia and combined (mixed) dyslipidaemia when response to diet and other non-pharmacological measures is inadequate. This medicinal product promises to be an effective new treatment for dyslipidemia, a condition associated with an increased risk for heart disease and stroke. The launch of Livazo® and Alipza® in Spain, one of the important European pharmaceutical markets, represents the first step in the commercialization in Europe of this new specialty.

Approval was received to extend the use of Carbaglu® (carglumic acid) to treat hyperammonaemia due to one of the three main organic acidaemias (isovaleric acidaemia, methylmalonic acidaemia or propionic acidaemia). Carbaglu® has orphan drug designation and since 2003 is indicated in the treatment of NAGS deficiency. Organic acidaemias (OA) are usually diagnosed in infancy, can be fatal, and affect especially the central nervous system. They are a group of inherited rare metabolic disorders which disrupt physiologic amino acid degradation causing a build-up of organic acids, which in turn may inhibit the urea cycle function, leading to hyperammonaemia. Acute hyperammonaemia due to OA represents a true medical emergency and Carbaglu®, by restoring the urea cycle and thus reducing blood ammonia levels, prevents brain damage.

In September, the acquisition of 100% of the share capital of Dr. F. Frik Ilac A.S., a Turkish pharmaceutical company with headquarters in Istanbul, was successfully concluded, following, among others, clearance from the relevant competition authority in Turkey. The value of the transaction (enterprise value) is of around $ 130 million of which $ 74,5 million were paid at the closing. Of the remaining balance a portion will be paid in tranches on future due dates and a portion comprises the company’s debt.This is the second acquisition Recordati has made in Turkey, where it acquired Yeni Ilac in December 2008. Frik Ilac has been one of the fastest growing pharmaceutical companies in Turkey. The company has a core portfolio of original prescription products both in primary care and specialist areas and employs 350 personnel, of which around 260 are medical representatives.

Management Comments

“The first nine months of the year were positive for the development of the Group due both to the very good financial results obtained as well as the conclusion of important initiatives. We therefore confirm our forecast for the full year 2011 during which we expect to achieve revenues above EUR 750 million, operating income above EUR 160 million and net income above EUR 110 million.”

Approval of a policy for the distribution of an interim dividend

The Board of Directors resolved to modify the shareholder remuneration policy followed to date by providing for the payment of an interim dividend, effective as from the current financial year. The decision takes into account the good results expected for 2011 and the forecast future growth and profitability of the business which, in the absence of events not predictable today, would allow the implementation of an interim dividend policy also in future years.

Based on the documents required by article 2433 bis of the Civil Code, a proposal for the distribution of an interim dividend to be paid as from 24 November 2011 (trading ex-dividend from 21 November 2011) will be submitted to the next Board Meeting.

Conference call

Recordati will be hosting a conference call today 25 October 2011 at 4.00 pm Italian time (3.00 pm London time, 10.00 am New York time). The conference ID is 4301358 and dial-in numbers are:

Italy +39 06 9974 9000, toll free 800 089 737 UK +44 (0) 20 7784 1036 USA +1 646 254 3366 France +33 (0) 1 7099 4286 Germany +49 (0) 69 2999 3286 

Callers are invited to dial-in 10 minutes before conference time and state the ID number 4301358. If conference operator assistance is required during the connection please digit * followed by 0 or call +353 23 8832493. A recording of the conference call will be placed on the website www.recordati.com.

A set of slides which will be referred to during the call will be available on our website www.recordati.com under Investors/Company Presentations.

Recordati, established in 1926, is a European pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT 0003828271),with a total staff of over 2,800, dedicated to the research, development, manufacturing and marketing of pharmaceuticals. It has headquarters in Milan, Italy, operations in the main European countries, and a growing presence in the new markets of Central and Eastern Europe. A European field force of around 1,400 medical representatives promotes a wide range of innovative pharmaceuticals, both proprietary and under license, in a number of therapeutic areas including a specialized business dedicated to treatments for rare diseases. Recordati’s current and growing coverage of the European pharmaceutical market makes it a partner of choice for new product licenses from companies which do not have European marketing organizations. Recordati is committed to the research and development of new drug entities within the cardiovascular and urogenital therapeutic areas and of treatments for rare diseases. Consolidated revenue for 2010 was EUR 728.1 million, operating income was EUR 154.8 million and net income was EUR 108.6 million.

Statements contained in this release, other than historical facts, are “forward- looking statements” (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based on currently available information, on current best estimates, and on assumptions believed to be reasonable. This information, these estimates and assumptions may prove to be incomplete or erroneous, and involve numerous risks and uncertainties, beyond the Company’s control. Hence, actual results may differ materially from those expressed or implied by such forward-looking statements. All mentions and descriptions of Recordati products are intended solely as information on the general nature of the company’s activities and are not intended to indicate the advisability of administering any product in any particular instance.

VERY GOOD 9 MONTHS 2011 RESULTS. SALES +5.8%. NET INCOME +5.8%. : http://hugin.info/143644/R/1557587/480951.pdf

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Source: RECORDATI via Thomson Reuters ONE

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