These financial statements will be available today at the company’s offices and on the company’s website.
- Consolidated revenues € 963.8 million, +11.8%.
- EBITDA (1) € 342.0 million, +22.1%
- Operating income € 307.5 million, +21.8%.
- Net income € 219.8 million, +20.6%.
- Net financial position (2): net debt of € 321.7 million.
- Shareholders’ equity € 1,054.9 million.
- Interim 2017 dividend of € 0.42 per share to be distributed.
Milan, 26 October 2017 - The Board of Directors of Recordati S.p.A approved the Group’s consolidated results for the first nine months of 2017 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 and on the company’s website www.recordati.com and can also be viewed on the authorized storage system 1Info (www.1Info.it).
Financial highlights
- Consolidated revenues in the first nine months 2017 are € 963.8 million, up by 11.8% compared to the same period of the preceding year. International sales grow by 11.7%.
- EBITDA (1), at 35.5% of sales, is € 342.0 million, an increase of 22.1% over the same period of the preceding year.
- Operating income, at 31.9% of sales, is € 307.5 million, an increase of 21.8%.
- Net income, at 22.8% of sales, is € 219.8 million, an increase of 20.6% over the first nine months of 2016.
- Net financial position (2) at 30 September 2017 records a net debt of € 321.7 million compared to net debt of € 198.8 million at 31 December 2016. During the period dividends were distributed and the acquisition of the marketing rights to the metoprolol based products from AstraZeneca was concluded for an overall disbursement of € 339.0 million. Shareholders’ equity increases to € 1,054.9 million.
(1) Operating income before depreciation, amortization and write down of both tangible and intangible assets.
(2) Cash and short-term financial investments less bank overdrafts and medium/long-term loans which include the measurement at fair value of hedging derivatives.
Corporate development news
In January the European Union Commission granted the European marketing authorization for its orphan medicinal product Cystadrops® 3.8mg/mL. Cystadrops® is the first eye-drop solution containing cysteamine hydrochloride approved in the European Union for “the treatment of corneal cystine crystal deposits in adults and children from 2 years of age with cystinosis”. The European Commission had granted Cystadrops® orphan drug designation in November 2008. Cystadrops® eye-drop solution was developed specifically for cystinosis patients by Orphan Europe (Recordati Group). Cystinosis is a rare congenital lysosomal storage disorder recognized as a severe life threatening condition. It is characterized by an accumulation of cystine crystals which negatively affects all organs in the body, especially the kidneys and eyes. Cystinosis benefits from systemic treatment with cysteamine orally administered. However, oral cysteamine does not adequately address ocular cystinosis because of the non-vascularization of cornea. Without a proper, continued, local eye treatment, cystine crystals accumulate in the cornea, leading to severe consequences and possibly to blindness in the long term.
In February an exclusive worldwide licensing agreement covering the know-how developed by the Meyer Hospital in Florence (Italy) for the development of a treatment for pre-term babies affected by retinopathy of prematurity (ROP) was signed. The treatment is currently being investigated in a phase II clinical trial by the Meyer Hospital, while Recordati will complete the clinical development and the regulatory steps necessary to obtain the marketing approval for the drug. Retinopathy of prematurity (ROP) is a potentially blinding eye disorder that primarily affects premature infants weighing about 1.25 kg or less that are born before 31 weeks of gestation This disorder, which usually develops in both eyes, is a rare condition, however presenting as one of the most common causes of visual loss in childhood that can lead to lifelong vision impairment and blindness. Furthermore, within the deal, Recordati shall support other Meyer projects in the rare disease area over a period of three years based on a mutually agreed plan. This collaboration between public and private institutions recognizes the important results obtained by the internal research conducted by the pediatric hospital in Florence.
In May Recordati signed an agreement with AstraZeneca for the acquisition of the rights to Seloken®/Seloken® ZOK (metoprolol succinate) and associated Logimax® fixed dose combination (metoprolol succinate and felodipine) treatments in Europe. The transaction was successfully concluded on 30 June (on 10 July for part of the transaction related to Romania). The consideration for the acquisition of the assets is of $ 300 million (€ 267 million). In addition, royalties for the use of the existing product brands will be due to AstraZeneca for an agreed period. Overall net sales in Europe in 2016 of the brands object of the transaction are of around € 100 million. Metoprolol succinate is a beta-blocker mainly indicated for the control of a range of conditions including hypertension, angina pectoris, disturbances of cardiac rhythm, maintenance treatment after myocardial infarction, and functional heart disorders with palpitations. It is a widely used drug in all European countries which will enable us to reinforce our product portfolios in a number of our European subsidiaries, in particular in Poland, France and Germany. Furthermore, existing sales of the metoprolol brands will provide the base to enter new markets and thus complete our European geographical footprint. Recordati has significant experience in the marketing of treatments for cardiovascular disease with an existing portfolio of medicines for hypertension and related conditions as well as an established salesforce across European markets.
On May 31, 2017, Recordati S.p.A. issued and privately placed a bond for a total of € 125.0 million with Pricoa Capital Group. The main terms and conditions provide for a 2.07% fixed interest rate and a duration of 15 years with repayment in annual instalments starting on 31 May 2025. The transaction, the object of which is to provide the necessary liquidity to support the growth of the group, was able to take advantage of the favourable market conditions.
In June Recordati signed an exclusive license agreement with MimeTech, an Italian development stage company founded by scientists from the University in Florence, for the development and subsequent commercialization on a global basis of a low molecular weight peptidomimetic of human nerve growth factor (NGF) for the treatment of neurotrophic keratitis, which already received an Orphan Drug Designation in the EU. Additional indications linked to NGF defects are also contemplated in the scope of the partnership. Under the terms of the agreement Recordati made an upfront payment upon signature of the contract and further milestone payments shall be linked to the development process and commercial performance. Neurotrophic keratitis is a rare degenerative corneal disease which in its more severe forms affects less than one person out of 10,000 worldwide, and is initiated by an impairment of trigeminal nerve. Impairment or loss of corneal sensory innervation is responsible for corneal epithelial defects, ulcer, and perforation. The most common causes of loss of corneal innervation are: viral infection (herpes simplex and herpes zoster keratoconjunctivitis), chemical burns, physical injuries, and corneal surgery. Neuroma, meningioma, and aneurysms may also determine a compression of the trigeminal nerve or ganglion and produce an impairment of corneal sensitivity. Furthermore, systemic diseases such as diabetes, multiple sclerosis, and leprosy may decrease sensory nerve function or damage sensory fibres compromising corneal sensitivity. The corneal epithelium is the first cell layer of the disease showing changes and defects, with poor predisposition to self-healing. The progression of the disease may lead to corneal ulcers, melting, and perforation leading to dramatic impairment to patients’ sight.
During July Gedeon Richter Plc. was granted marketing authorization from the European Commission for Reagila® (cariprazine), a novel antipsychotic for the treatment of schizophrenia in adult patients, valid for all European Union Member States. In August 2016 Richter and Recordati had signed an exclusive license agreement to commercialize cariprazine in Western Europe, Algeria, Tunisia and Turkey. The European application for the treatment of schizophrenia included results from three placebo and partly active controlled positive trials in over 1,800 patients and one long-term trial, using the change from baseline in the scale, assessing the severity of schizophrenia symptoms, i.e. the Positive and Negative Syndrome Scale (PANSS) total score and the time to relapse as primary efficacy endpoints. A clinical trial with positive results was also carried out in patients suffering from predominant negative symptoms of schizophrenia. The high relevance of these results is the base for a publication in The Lancet (Cariprazine versus risperidone monotherapy for treatment of predominant negative symptoms in patients with schizophrenia: a randomised, double-blind, controlled trial; The Lancet Volume 389, No. 10074, p1103-1113, 18 March 2017).
Management Comments
“The financial results obtained in the first nine months of the year confirmed the continued growth of the group, with revenues and profitability increasing strongly”, declared Andrea Recordati, CEO. “Furthermore, important development initiatives for further growth were undertaken. The product pipeline of our business dedicated to the treatment of rare diseases has been reinforced with new research programs. The approval of cariprazine, a novel drug for the treatment of schizophrenia is important for the development of our specialty business. As from July our sales include the revenues generated by the metoprolol based products acquired from AstraZeneca which will contribute to significantly reinforce our presence in Europe and provide the base to enter new markets and thus complete our European geographical footprint,” continued Andrea Recordati. “The group’s business continued to perform well during October and for the full year 2017, our expectation is to achieve sales of between € 1,290 and 1,300 million, EBITDA of between € 450 and 460 million, EBIT of between € 400 and 410 million and net income of between € 290 and 295 million.”
Further resolutions
2017 Interim dividend
The Board of Directors resolved to distribute an interim dividend relating to the financial year 2017 amounting to € 0.42 (before withholding tax) on each outstanding share, excluding shares in treasury stock. The interim dividend will be paid, through the authorised intermediaries, as from November 22, 2017 (record date November 21, 2017) on coupon No. 20 to be presented on November 20, 2017.
The Independent Auditor’s opinion on the distribution of the interim dividend is also available at the Company’s registered offices as per article 2433-bis of the Italian Civil Code.
The Directors’ Report and financial statements of Recordati S.p.A. as at 30 June 2017, on which the Board of Directors based its resolution to distribute the abovementioned interim dividend, are available at the Company’s registered offices and published on the Company’s website (www.recordati.com). Such documents can also be viewed on the authorized storage system 1Info (www.1Info.it).
Conference call
Recordati will be hosting a conference call today 26 October 2017 at 4.00 pm Italian time (3.00 pm London time, 10.00 am New York time). The dial-in numbers are:
Italy +39 02 8058811, toll free 800 213 858
UK +44 1 212818003, toll free 800 0156384
USA +1 718 7058794, toll free 855 2656959
France +33 170918703
Germany +49 69 255114451
Callers are invited to dial-in 10 minutes before conference time. If conference operator assistance is required during the connection, please digit * followed by 0 or call +39 02 8061371. 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 an international pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT 0003828271), with a total staff of more than 4,100, dedicated to the research, development, manufacturing and marketing of pharmaceuticals. Headquartered in Milan, Italy, Recordati has operations in the main European countries, in Russia, other Central and Eastern European countries, Turkey, North Africa, the United States of America, Canada, Mexico and in some South American countries. An efficient field force of 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 is a partner of choice for new product licenses for its territories. Recordati is committed to the research and development of new specialties with a focus on treatments for rare diseases. Consolidated revenue for 2016 was € 1,153.9 million, operating income was € 327.4 million and net income was € 237.4 million.
For further information:
Recordati website: www.recordati.com
Investor Relations Media Relations
Marianne Tatschke Studio Noris Morano
(39)0248787393 (39)0276004736, (39)0276004745
e-mail: investorelations@recordati.it e-mail: norismorano@studionorismorano.com
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.
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