- Total revenue and other operating income of €47.9 million, showing 36% growth in the first quarter of 2008 compared to €35.2 million in the same period of 2007.
- Net loss in the quarter halved to €9.0 million compared to Q107.
- New contracts awarded for Quinvaxem(TM) and strong sales
in travel vaccines drive autonomous growth.
- Gross margin in the first quarter improved to 40% up from 23% last year.
2008 full year guidance reiterated: total revenue and other operating income growth of 20% in constant currencies ; higher margins; positive cash flow.
Leiden, The Netherlands (May 13, 2008) - Dutch biopharma company Crucell N.V. (Euronext, Nasdaq: CRXL; Swiss Exchange: CRX) today announced its financial results for the first quarter of 2008, based on International Financial Reporting Standards (IFRS). These financial results are unaudited.
Highlights:
Supranational organizations award Crucell new contracts of $130 million for supplies of Quinvaxem(TM) in 2008 and 2009. These contracts are in addition to the December 1, 2006 announcement for the award of over $230 million for its Quinvaxem(TM) and Hepavax-Gene® vaccine, bringing the total value up to $360 million.
Crucell's rabies monoclonal antibody cocktail entered a Phase II clinical trial in the US in March 2008. Today the start of a second Phase II study in the Philippines was announced. The start of these Phase II studies triggers the first milestone payments of a total of up to €66.5 million.
Solid growth of travel vaccines; in particular Epaxal® and Dukoral®.
Crucell, the Aeras Global TB Vaccine Foundation and the South African Tuberculosis Vaccine Initiative (SATVI) present encouraging preliminary results from the Phase I Ad35 tuberculosis vaccine study, showing that CD8 immune responses are considerably higher than ever seen in a tuberculosis vaccine study.
Senior management outlines a compelling case for investment during an analysts meeting in London, based on significant growth of the vaccines business, progress of its pipeline and its unique technologies. A clear focus on achieving operational excellence is showcased as an integral part of Crucell's strategy for accelerating growth, targeting a cost saving of 15% (excluding R&D) by the end of 2009.
DSM and Crucell reached a record production level of 15 g/L for an antibody product, another important milestone for the PER.C6® production technology.
Crucell enters into an exclusive vaccine development agreement with Wyeth Pharmaceuticals. Crucell is responsible for the development and manufacturing of certain components of a vaccine and Wyeth for the clinical development. The development is taking place in Crucell's facility in Bern (Switzerland), which had been fully impaired in 2006, now enabling a partial reversal of €5.2 million of that impairment.
Crucell and DSM Biologics announce that MorphoSys AG has decided to extend the PER.C6® technology licensing agreement, exercising an option for clinical and commercial production of antibodies.
Financial Highlights:
Combined total revenue and other operating income for the quarter of €47.9 million compared to €35.2 in the same quarter of 2007. The improvement of 36% (increase of 41% in constant currencies[1]) was driven by strong sales of paediatric vaccines, in particular by Quinvaxem(TM), higher sales of travel vaccines and higher license fees and other income.
Gross margin was 40% compared to 23% in the first quarter of 2007. Margins in the first quarter of 2007 were negatively influenced by purchase price allocation costs of €3.1 million whereas first quarter 2008 margins were positively affected by a better mix of product sales and higher license revenues.
Net financial income & expenses in the first quarter of negative €4.4 million was the result of foreign exchange losses caused by the weaker US Dollar and by the strengthening of the Swiss Franc against the Euro.
Net results were positively affected by a partial reversal of €5.2 million of the impairment taken on the facility in Bern in 2006. The facility is now used in the exclusive vaccine development agreement with Wyeth Pharmaceuticals, signed in March 2008.
Net loss for the first quarter of 2008 was €9.0 million versus a net loss of €18.5 million the same quarter of 2007, primarily due to stronger sales and the partial reversal of the impairment.
Net cash used in operating activities in the first quarter was €34.0 million compared to net cash used in operating activities of €13.6 million in the same quarter of 2007, mainly driven by an increase in inventories due to a higher level of activity and a decrease in accounts payable.
Cash and cash equivalents at the end of the first quarter amounted to €121.9 million. Deterioration of cash flow and working capital in the first quarter was due to the seasonality of our business, in which we build inventory in the first half of the year to sell our products in the second half.
Crucell's Chief Executive Officer Ronald Brus said:
"In the first quarter we saw strong sales of our paediatric and travel vaccines. We are particularly excited to have received additional Quinvaxem(TM) contracts, which further confirm the significant growth expected for Quinvaxem(TM) in 2008.
"We are rolling out our 'Healthy Ambition' program at full speed with clear focus on achieving operational excellence as an integral part of our growth strategy. During our second quarter results we will further validate expected savings in 2008, confirming we are on track to achieve the 15% (excluding R&D) cost savings target by the end of 2009.
"Our rabies monoclonal antibody program is clearly on a fast track with a second Phase II study starting today in the Philippines. Together with the US Phase II clinical study which started in March, these studies trigger the first milestone payments of a total of up to €66.5 million.
"The preliminary results from the Phase I Ad35 tuberculosis vaccine study show encouraging results, where CD8 immune responses are considerably higher than ever seen in a tuberculosis vaccine study. We are excited that Crucell's technologies are playing a key role in the search and development of a much-needed TB vaccine.
"Based on our first quarter results we reiterate our guidance of combined total revenue and total other operating income for the full year 2008 to grow by 20%[2]. We further expect higher margins and positive cash flow."
Business Update
Product Update
Product sales for the first quarter amounted to €35.5 million and represent sales of paediatric vaccines (46%), travel vaccines (38%) and other products (16%).
Paediatric
In the first quarter of 2008 we saw good growth of our paediatric vaccines, particularly driven by Quinvaxem(TM) and Hepavax-Gene®, due to new contracts awarded by supranational organizations.
Quinvaxem(TM): Fully liquid pentavalent vaccine.
Hepavax-Gene®: Recombinant hepatitis B vaccine.
Epaxal® Junior: Paediatric dose (0.25mL) of Epaxal® - the only aluminum-free hepatitis A vaccine. Epaxal® Junior was licensed in 2007 in Switzerland. The product is currently under registration in selected countries worldwide. Sales in South America have started and European launch is being planned.
MoRu-Viraten®: Vaccine for protection against measles and rubella (for all age groups). MoRu-Viraten® was successfully licensed in the first half of 2007.
Travel and endemic
The first quarter of 2008 showed solid growth of our travel and endemic portfolio, where Epaxal® and Dukoral® in particular showed growth compared to the first quarter of 2007. We continue to see significant untapped demand and geographical expansion potential of our travel portfolio.
Epaxal®: The only aluminium-free hepatitis A vaccine.
Vivotif®: The only oral typhoid vaccine.
Dukoral®: The only oral vaccine against diarrhea caused by cholera and ETEC (enterotoxigenic E.coli).
Respiratory
Inflexal® V: Virosomal adjuvanted influenza vaccine (for all age groups). Due to the seasonality of the product, we build inventory in the first half of the year to sell the respiratory products in the second half.
Pipeline Update
Live Attenuated Yellow Fever Vaccine Flavimun®: Crucell's management expects the registration submission of the Yellow Fever vaccine in Switzerland before the end of 2008.
Influenza - Seasonal Flu Vaccine (FluCell collaboration with sanofi pasteur): The seasonal influenza vaccine developed by Crucell's partner sanofi pasteur, using PER.C6® technology. Phase II testing of the cell based influenza vaccine which was initiated in the U.S. in November 2007 continues according to plan. Phase II trials involving healthy adult volunteers in the U.S. focus on the safety profile and immunogenicity of the cell-based vaccine.
Influenza - Pandemic Flu Vaccine H9N2: Phase I and II studies have been completed and the results are currently being analyzed. No serious adverse side effects were reported to date. Findings are expected to be released in the second quarter of 2008.
Rabies Human Monoclonal Antibody Cocktail: In March 2008 Crucell announced that its rabies monoclonal antibody combination, a collaboration with sanofi pasteur using Crucell's PER.C6® manufacturing technology, has entered a Phase II clinical trial in the US. Today the start of a second Phase II study in the Philippines was announced. The start of these Phase II studies triggers the first milestone payments of a total of up to €66.5 million. This antibody cocktail is to be used with a rabies vaccine for post-exposure prophylaxis against this fatal disease. Based on promising Phase I data in 2007, showing no serious adverse effects and well tolerated treatment, Crucell was granted a Fast Track designation by the FDA Department of Health and Human Services. Crucell will be responsible for the manufacturing of the final product and will retain exclusive distribution rights in Europe, co-exclusive distribution rights in China and the rights to sell to supranational organizations such as UNICEF.
AdVac®/PER.C6® Technology-Based Malaria Vaccine: Crucell and its partner, the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), are conducting a Phase I trial in the U.S. The study is being carried out on two sites, VanderBilt and Stanford University. The first and second cohorts, comprising of 18 and 17 volunteers respectively, have been enrolled. Enrollment of a third group of 18 volunteers is progressing and is near completion. Enrollment for the fourth and final group of volunteers is expected to start in the summer. Initial findings of this Phase I trial are expected to be available in 2008.
AdVac®/PER.C6® Technology-Based Tuberculosis Vaccine: The development of this vaccine is being carried out in collaboration with the Aeras Global TB Vaccine Foundation. A US Phase I trial (in BCG naïve individuals) has been completed, indicating that the vaccine candidate is safe in healthy adults in the US. The results of a second study which took place in South Africa, launched in May 2007, were presented in April at the 'Tuberculosis Vaccines for the World' conference in Atlanta. Preliminary data show encouraging results, whereby CD8 immune responses are considerably higher than previously ever seen in a tuberculosis vaccine study. A third phase I study in healthy adults in St. Louis, US was launched in December 2007 and focuses on the immunogenicity and safety of two AERAS-402/Crucell Ad35 boost doses administered at three to six month intervals after BCG priming in healthy adults.
AdVac®/PER.C6® Technology-Based Ebola Vaccine: For the Phase I study for the Ebola vaccine, which Crucell is developing in partnership with the Vaccine Research Center (VRC) of the National Institute of Allergy and Infectious Diseases (NIAID), two groups of 16 volunteers have been enrolled and vaccinated. The clinical data is still blinded, however initial indications suggest that the vaccine is safe at the tested doses and appears to be immunogenic in a subset of subjects.
Blood Coagulation Factor VL/C: Preclinical work on this program continues but conclusive proof of concept is not expected in the near future.
AdVac®/PER.C6® Technology-Based HIV Vaccine: The Investigational New Drug Application (IND) for Phase I of the trial with Harvard Medical School (supported by the NIH) was approved by the FDA in January 2008. In April, Crucell announced that the novel recombinant vaccine (using adenovirus serotype 26 (rAd26) vector), which is jointly developed with the Beth Israel Deaconess Medical Center (BIDMC), has gone into a Phase I clinical study to test a new HIV vaccine. The rAd26 vector is specifically designed to avoid the pre-existing immunity to the more commonly used adenovirus serotype 5 (Ad5). The phase I clinical study will be conducted at the Brigham and Women's Hospital (BWH) in Boston and will focus on assessing the safety and immunogenicity of the vaccine. The study will involve 48 healthy volunteers.
Human Monoclonal Antibodies Against Flu H5N1: Crucell's scientists discovered a set of human monoclonal antibodies that provides immediate protection and neutralizes the broadest range of H5N1 strains in preclinical models. A total of twenty-one human monoclonal antibodies were discovered. These were found to be able to neutralize the H5N1 virus of avian influenza, which currently presents a global threat. The most potent of the antibodies was shown to neutralize the broadest range of H5N1 strains that have emerged between 1997 and 2004. This antibody prevents flu, in pre-clinical models, when given twenty four hours before a challenge with a high dose of deadly pathogenic H5N1 virus. When given three days after infection, it also was shown to prevent death and cure the disease. Therefore this antibody may provide a powerful tool in pandemic preparedness.
