Actelion Sees Profit Slowdown as Franc, Patent Loss Hit Sales
(Bloomberg) — Actelion Ltd., a Swiss developer of drugs to treat a rare lung disease, forecast full-year profit growth will decelerate as its bestselling medicine loses patent protection and the strength of the franc erodes sales.
Core earnings will grow by a low single-digit percentage at constant exchange rates, the Allschwil, Switzerland-based company said in a statement today. Full-year earnings jumped 20 percent to 743 million francs ($800 million), missing the average estimate for profit of 776 million francs among seven analysts compiled by Bloomberg. The company also said it plans to buy back 10 million shares over three years.
Actelion faces the expiration this year of the patent on Tracleer, which accounted for about 75 percent of sales last year. The franc’s appreciation against the dollar and the euro is denting the value of sales in the U.S. and Europe, which account for more than 80 percent of Actelion’s revenue.
“We must be mindful that — as most Swiss exporters — a strong Swiss franc will have a negative impact on Actelion’s Swiss franc earnings,” Chairman Jean-Pierre Garnier said in the statement.
Revenue of Opsumit, the follow-up to Tracleer, amounted to 180 million francs last year, missing the average analyst estimate of 190.4 million francs. Actelion also expects approval for another therapy, Uptravi, by the end of this year, which analysts predict will add sales of more than 1 billion francs by 2020.
Tracleer, Opsumit and Uptravi are approved to treat pulmonary arterial hypertension, a deadly and incurable disease in which the arteries that carry blood from the heart to the lungs narrow, making the heart work harder and causing elevated blood pressure in the arteries of the lungs. That causes symptoms such as chest pain, dizziness and shortness of breath. The disease affects from one in 100,000 people to one in 1 million people, according to the American Lung Association.
The company said a year ago that it expected 2015 core earnings growth in the single-digit percentage range. It subsequently said it would review its 2015 forecast after twice upgrading its 2014 profit outlook.
The franc has strengthened about 9.6 percent against the U.S. dollar and 13 percent against the euro since the Swiss National Bank scrapped its cap on the currency last month.
To contact the reporter on this story: Simeon Bennett in Geneva at sbennett9@bloomberg.net To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net Thomas Mulier, Kim McLaughlin
