BALLERUP, Denmark, 2 March 2018: In 2017, LEO Pharma helped more than 80 million patients, increased revenues by 8% in local currencies, and generated revenues at more than DKK 10bn for the first time in the company’s 110 year old history. Earnings before interest and tax (EBIT) more than doubled to DKK 852 million despite significant investments in new products. LEO Pharma’s business grew in all regions, driven by new product introductions, and profitability increased as a result of rigorous cost control. The company successfully introduced Kyntheum® (brodalumab) for psoriasis in Europe, and Enstilar® foam (betamethasone and calcipotriol) for psoriasis continues to exceed expectations. Also 2017 saw LEO Pharma lay out a new ambitious strategy towards 2025, with a clear direction towards global leadership in medical dermatology.
“2017 was a very good year for LEO Pharma. We helped 80 million patients, increased sales in all regions through new products and increased our profitability by means of rigorous cost control. We introduced our first biologic, Kyntheum®, in Europe, and continued the launch of Enstilar®, giving psoriasis patients new options. Our stringent and continuous focus on efficiency in our established business makes additional investments in research and development possible. As a global leader in the dermatology category, LEO Pharma will increase focus on bringing innovation to medical dermatology,” said Gitte P. Aabo, CEO and President, LEO Pharma.
LEO Pharma’s revenue increased by DKK 700 million, or 8% in local currencies, to DKK 10,481 million, compared to 2016. EBIT more than doubled to DKK 852 million. The company’s operating profit before depreciation and amortisation was above expectations going from DKK 1,346 million in 2016 to DKK 2,005 million in 2017. The operating profit improvements were mainly driven by realised cost savings from efficiency projects launched in 2016, and the full-year effect of sales from Astellas’ global dermatology portfolio, which LEO Pharma acquired in 2016.
In order to support the recent changes in governance structure for the LEO Foundation, LEO Pharma in 2017 transferred DKK 18.6bn to the LEO Foundation.
Growth across regions
All regions contributed to growth, with the US as the single biggest driver in percentage points with a revenue growth of 13%, followed by Region International with 8%. The result was, among other, supported by a smooth integration of the dermatology portfolio recently acquired from Astellas, a disposition which in turn has made LEO Pharma a leader in the Chinese dermatology market. Growth in Region Europe+ (Europe, Canada and Australia) amounted to 6%.
Following the successful launch in 2016 of Enstilar®, LEO Pharma’s topical foam for psoriasis, the product was launched in several new markets in 2017 and continued to exceed expectations with a total sales growth of 97%. Enstilar® has been very well received by patients and LEO Pharma will continue to launch the product in new markets in 2018.
Bringing innovation to dermatology patients
2017 also saw LEO Pharma’s successful entrance into biologics in dermatology with the introduction of Kyntheum® in Europe. Kyntheum® is LEO Pharma’s first biological treatment for moderate-to-severe psoriasis, and offers new hope to the millions of people whose lives are affected by the disease. The treatment is now available to patients in Germany, the UK, Denmark, the Netherlands, Sweden and Ireland and more European countries will follow in 2018. To build an even stronger foothold in biologics, the company also initiated phase 3 clinical studies for tralokinumab in moderate-to-severe atopic dermatitis. Tralokinumab is an investigational monoclonal antibody and LEO Pharma’s most advanced biological compound under development.
LEO Pharma has laid out its strategy towards 2025. The ambition is to shape medical dermatology to help patients with skin diseases whose needs are often overlooked. Addressing this, LEO Pharma will increase efforts in developing innovative therapeutics, such as biologics, systemic treatments and new topical mechanisms of action. The company will nurture and expand its existing pipeline through close partnerships with other pharmaceutical companies, biotech companies and academia, and investments in R&D could increase to up to 25% of revenues. The award-winning LEO Innovation Lab will continue to explore how to improve diagnosis and communication between patients, physicians and payers.
As a foundation-owned company, LEO Pharma has the privilege and the obligation to put patients first. This allows to plan for the long term and create new approaches to move medical dermatology forward. Stringent and continuous focus on efficiency in the established business makes additional investments in research and development possible. LEO Pharma is, however, prepared to accept a temporary dip in our earnings in order to bring new and better treatments to the market.
Strengthening the Board of Directors
Along with announcing annual results LEO Pharma also announces changes to the Board of Directors following the company’s Annual General Assembly on 27 February 2018. Newly elected board members are Dr. Anders Ekblom, and CEO Jesper Mailind who join together with newly employee-elected members of the Board of Directors, Signe Marie Christensen and Franck Mareno Nielsen.
Associate Professor Anders Ekblom, MD, PhD, serves as Chairman of the Board of Karolinska Instituttet and Director of the Board of the Swedish Research Council. Mr. Ekblom brings more than 19 years’ industry experience from top management positions at AstraZeneca where he has managed staff and projects in the US, EU and Asia.
Jesper Mailind currently serves as CEO of the LEO Foundation and brings extensive industry experience from top management positions in innovative companies such as Alectia A/S, RTX A/S, GN Resound A/S, GN Great Nordic A/S and Nycomed Pharma (now Takeda). Mr. Mailind holds an MBA from INSEAD and a BSc in economics from Copenhagen Business School.
Anders Ekblom and Jesper Mailind replace Ingelise Saunders and Peder Holk Nielsen. LEO Pharma would like to thank Ingelise Saunders and Peder Holk Nielsen for their valuable and long-standing services to the company.