2008 record financial statements from LEO Pharma

27 March 2009

After a record year with strong sales growth for Daivobet® and Innohep®, LEO Pharma is investing in emerging markets, for example China and Mexico, as well as in making more progress in its strong R&D pipeline.

2008 was a record year for the Danish pharmaceutical company LEO Pharma. Turnover grew by 9% to EUR 766 million, and meant that the company had a profit before tax of EUR 429 million despite considerable investments in research and development as well as in the markets.
The Health Care turnover reached EUR 763 million – corresponding to a growth of 10%.

The LEO Group’s turnover and earnings have never surpassed those in 2008, when the company also celebrated its centenary anniversary.

"The profit for 2008 is satisfactory, especially as it has been achieved through a high growth in sales. In particular, it is our anti-coagulant Innohep® and the psoriasis drug Daivobet® which have driven the growth in sales with increases of 25% and 23% respectively," says Gitte P. Aabo, President & CEO of LEO Pharma, which is wholly owned by the LEO Foundation.

In the coming years, LEO Pharma’s existing product portfolio will be extended to include new markets while the Group will, by investing in R&D, count on new and patentable drugs to supplement or replace its existing products.

With equity of EUR 2,727 million and a positive cash flow of EUR 356 million, LEO Pharma enjoys the favourable position of having the financial freedom to take action and expand despite the global financial crisis.

"We want to expand and invest to create a platform for further growth in LEO Pharma. This may involve investments in emerging markets such as our new affiliate in China and in the sales force in Mexico. It does include investments in more progress in our own R&D pipeline. In 2008, we had three new drugs in pre-clinical development and, just before Christmas, submitted a registration application to the European authorities for Daivobet® gel, which is used for treating psoriasis on the body. In addition we are keen to inlicense drugs which offer significant market potential," says Gitte P. Aabo.

LEO Pharma’s commercial focus areas are:

  • Dermatology: Psoriasis, skin and soft tissue infections and eczema.
  • Critical Care: Anti-coagulation and bone turnover/nephrology.

Dermatology
The psoriasis product portfolio is LEO Pharma’s most important business area.

Xamiol®, which is used for treating psoriasis of the scalp, is a new and innovative drug with significant clinical results and clear benefits regarding patient comfort. Xamiol® was approved by the authorities in 2008 and launched in several countries.

In 2008, Xamiol® – which is marketed in the US under the name of Taclonex® Scalp Topical Suspension – got off to a good start, selling well in the American market and in the handful of European countries where the drug has been launched. We have high expectations of Xamiol® as the drug offers improved treatment of scalp psoriasis compared with existing preparations.

The main product within psoriasis treatment, Daivobet®, has seen growth of 23% in 2008 relative to last year. Sales within Dermatology account for more than 50% of turnover.

Critical Care
Within Critical Care, the development in sales has primarily been driven by the anti-coagulant Innohep®, with France still being LEO Pharma’s biggest market. Compared to 2007, sales of Innohep® grew by 25% in 2008, and it has become the LEO Group’s biggest single brand.

Innohep® is a unique product for treating blood coagulation disorders and stands out positively in several respects compared to other low molecular herapins. LEO Pharma will capitalise on these advantages, which is why a new Innohep® strategy has been developed that will involve the treatment of new patient groups, for example cancer patients.

Research and development
In 2008, LEO Pharma has strengthened its pipeline and today has a particularly strong portfolio of research and development projects.

Dermatology

  • Daivobet® gel is being developed to treat psoriasis on the body and is close to being registered in Europe.
  • Picato® is being developed to treat aktinic keratosis on the face and body and is now in clinical phase III.
  • TD 1414 is being developed to treat skin infections and is in clinical phase II. Phase III studies may be started in 2009.
  • LEO 22811, an oral psoriasis treatment, moved in January 2009 from pre-clinical development to clinical phase I.
  • LEO 29102 for the treatment of eczema was yesterday moved from pre-clinical development to clinical phase I.

Critical Care

  • LEO 27847 is in pre-clinical development for treating patients suffering from kidney disease. It is expected to enter clinical phase I in 2010.

 

Outlook for 2009

LEO Pharma expects an increase in sales in 2009, while the profit for the year will be lower than the profit for 2008. Ongoing operations will continue to grow and the expected fall in profit is solely the result of investments in the future. 

EUR mill. 2008 2007 2006 2005 2004
Profit and Loss:          
Turnover, total 765,8 704,1 694,0 651,7 637,3
Turnover, discontinuing activities - - - 14,9 57,4
Turnover, continuing activities (total) 765,8 704,1 694,0 636,8 579,8
Turnover, continuing activities (outside DK) 724,2 662,5 652,3 599,5 552,5
Result from primary activities 330,4 311,1 336,8 231,2 143,0
Net financial items 98,9 78,3 67,5 105,9 58,7
Profit before tax 429,3 389,4 404,3 337,1 201,7
Net profit 339,1 317,3 325,9 263,9 154,4
           
Balance sheet:          
Fixed assets 2.786,4 2.384,1 2.443,8 2.269,7 1.693,5
Current assets 486,5 374,7 324,7 317,0 366,0
Total assets 3.272,9 2.758,8 2.768,6 2.586,8 2.059,5
Equity 2.727,4 2.391,4 2.070,1 1.738,4 1.484,1
           
Key figures:           
Operating margin 43% 44%  49% 35% 22%
Return on investment 11% 11% 13% 10% 7%
Return on equity 17% 17% 21% 21% 14%
Equity ratio 83% 87% 75% 67% 72%
           
Employees:          
Average No. of FTE (full time equivalents) 3.008 2.921 2.985 3.012 3.313

About LEO Pharma
LEO Pharma is an independent, research-based pharmaceutical company based in Ballerup near Copenhagen. LEO Pharma is wholly owned by the LEO Foundation and is one of the world’s leading companies within dermatology (skin diseases) and the parenteral treatment of thromboembolisms (thombosis). LEO Pharma discovers, develops, manufactures and markets safe and efficacious drugs globally. 96% of the group’s turnover stems from outside Denmark. LEO Pharma is represented in more than 90 countries and has approx. 3,000 employees, of whom 1,200 work in Denmark.

For more information, please contact:

LEO Pharma
Corporate Communications
Tel.: +45 4494 5888

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