Actelion Raises Full-Year Forecast After Beating Estimates

Jul 22, 2014 11:57 am ET

(Updates with closing share price in sixth paragraph.)

July 22 (Bloomberg) -- Actelion Ltd. raised its full-year profit forecast after reporting second-quarter earnings that beat analysts’ estimates because of lower-than-expected Medicaid rebates in the U.S. on its older lung drug Tracleer.

Core earnings will increase at least in the mid-teen percentage range this year, compared with a previous forecast for growth by a low single-digit percentage, Allschwil, Switzerland-based Actelion said in a statement today. The company said it will review its 2015 forecast early next year after predicting profit growth by a single-digit percentage.

Actelion gained from higher prices for Tracleer, the drug that accounted for 86 percent of sales last year, and from over- budgeting for rebates it pays to Medicaid, the U.S. health insurance program for the poor. Opsumit, approved by U.S. regulators last year, is designed as a successor to Tracleer, which starts losing patent protection in 2015. Opsumit will be even bigger than the older drug in terms of sales, Chief Executive Officer Jean-Paul Clozel said today.

“Frankly I don’t think it’s a question of if, it’s a question of when,” Clozel said in a telephone interview, declining to say what year Opsumit will reach peak sales.

Actelion said last month that another experimental lung drug, selexipag, met the main goal of a late-stage study, potentially giving the company a pill that may garner annual sales of as much as 2 billion Swiss francs ($2.23 billion).

Shares Rise

Actelion shares rose 2.6 percent to close at 112.40 francs in Zurich, giving the company a market value of 13.5 billion francs. The stock has climbed about 87 percent in the past year, including reinvested dividends, making it the second-best performer on the Bloomberg Europe Pharmaceutical Index.

Core earnings in the second quarter rose to 233 million Swiss francs, compared with the average analyst estimate of 171.3 million francs compiled by Bloomberg.

Actelion hasn’t received approaches from companies wanting to buy it, Clozel said, after analyst Guillaume van Renterghem at UBS AG said the Swiss drugmaker may be the next target of a tax inversion following AbbVie Inc.’s purchase of Shire Plc.

“For me it does not make sense to make a deal because of a tax ruling, because it’s just a short-term view,” Clozel said. “We have the support of shareholders, and any person thinking of a tax inversion needs to think of that before making any decision.”

Actelion said it expects to report advances in the second half of this year from its clutch of experimental drugs, which includes the cadazolid antibiotic for Clostridium difficile- related diarrhea and ponesimod for multiple sclerosis.

“We have a fantastic pipeline which is not valued or very well known, which is because we didn’t really want to describe it up until now,” Clozel said.