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Vifor Pharma delivers strong full year results 2020 with an EBITDA of 576 million Swiss Francs representing over 29% growth1

ST GALLEN, Switzerland–(BUSINESS WIRE)–Regulatory News:

Vifor Pharma Group reported stable net sales and a continued strong increase in profitability in 2020, despite challenges to patient access from COVID-19 and the impact of a much stronger Swiss franc against the US dollar.

FINANCIAL PERFORMANCE: CONTINUED PROFITABLE GROWTH AT CER

Commenting on the full year results, Stefan Schulze, CEO of Vifor Pharma Group, said: “Resilience and adaptability are the words that summarize the performance of Vifor Pharma in 2020. Our employees and partners have faced the challenges of COVID-19 with determination and flexibility as we continued to ensure our therapies reach patients. Patient access to treatments such as i.v. iron infusions has been closely correlated with the intensity of lockdowns, and direct contacts with physicians have been regularly postponed. Against this backdrop, and despite the impact of a much stronger Swiss franc against the US dollar, our profitability continued to increase strongly, helped by disciplined cost control and the strength of our growing nephrology portfolio. Considering the current outlook on the COVID-19 situation and the fact that our key products have shown a quick return to strong growth as lockdown measures were eased in 2020, we have a high level of confidence that we return to growth in 2021 once restrictions are eased. Adding our pipeline of innovative nephrology treatments on track for expected approvals in 2021 and 2022, continuing expansion of our global presence and a reputation as a go-to industry partner for in- and out-licensing, we can look to the future with great optimism.”

FERINJECT®/ INJECTAFER®: DEMAND INFLUENCED BY LOCKDOWN MEASURES

NEPHROLOGY PORTFOLIO SIGNIFICANTLY STRENGTHENED

VELTASSA®: NEW PRESCRIPTIONS IMPACTED BY COVID-19 RESTRICTIONS

SALE OF OM PHARMA

1. FINANCIAL PERFORMANCE

In million CHF

2020

2019

Change

Change at CER

Net sales

1,705.6

1,725.0

-1.1%

3.7%

EBITDA

575.8

485.0

18.7%

29.4%

Net profit after minorities

359.6

159.1

126.1%

151.1%

Core earnings per share from continuing operations (in CHF)

4.99

3.88

28.7%

43.8%

 

For further details, please see the Vifor Pharma 2020 Annual Report (PDF) at www.viforpharma.com.

KEY PROFIT AND LOSS FIGURES

Vifor Pharma Group reported net sales of CHF 1,705.6 million, a decline of 1.1% compared to the previous year, or an increase of 3.7% at CER. The growth was impacted by COVID-19 restrictions which mainly affected Ferinject®, with patients requested not go to hospitals, temporary closures of administration sites and delays in elective surgeries.

EBITDA increased to CHF 575.8 million compared to CHF 485.0 million in the previous year, an increase of 18.7%, or 29.4% at CER. The growth was driven by a combination of the growth in net sales at CER, cost containment measures, and the increase in other income from partnering activities and the disposal of non-core products. In the second half of 2019, the Group made changes to its defined benefit pension plan (IAS 19) which resulted in a positive one-off EBITDA impact of CHF 22.4 million in 2019. Excluding the IAS 19 impact, the EBITDA grew by 35.7% at CER compared to prior year.

Other income grew to CHF 96.4 million from CHF 37.0 million in the previous year. The increase was primarily related to the partnering of Ferinject® in China, Veltassa® in China and Canada, Velphoro® in Canada, and the disposal of non-core products in Spain and Portugal.

Cost of sales amounted to CHF 701.2 million compared to CHF 700.8 million in the previous year, resulting in a gross profit margin of 61.1% compared to 60.2% in the previous year. The margin improvement was driven by the higher contribution from other income.

Marketing and distribution expenses amounted to CHF 403.8 million compared to CHF 435.7 million in the previous year, down 7.3%. The additional investments in prelaunch activities for our pipeline products were more than offset by cost containment measures.

Investments in research and development amounted to CHF 250.0 million compared to CHF 212.0 million in the previous year. The increase was attributable to the impairment of the CCX140 intangible asset of CHF 56.2 million. Excluding this impairment, investment in research and development declined by 8.6%, mainly driven by a temporary COVID-19 halt in the enrolment of patients to the Veltassa® DIAMOND clinical trial.

General and administration expenses amounted to CHF 155.7 million compared to CHF 137.6 million in the previous year. The increase was mainly attributable to higher legal costs from patent litigations of CHF 9.8 million, and the portion of the previously mentioned changes the Group made to its defined benefit pension plan in 2019. This contributed to one-time lower general and administration costs of CHF 4.3 million in 2019.

Core earnings per share from continuing operations amounted to CHF 4.99, an increase of 28.7% compared to CHF 3.88 in 2019 mainly due to strong operational performance. Core earnings are defined as reported earnings after minorities adjusted for proportionate amortization and impairment of intangible assets of CHF 185.0 million in 2020 (2019: CHF 143.5 million).

CASH FLOWS

Cash flow from operating activities amounted to CHF +423.8 million compared to CHF +524.8 million in the previous year. The decrease is mainly due to investments in net working capital, namely increased trade receivables from phasing of payments due from major customers and a planned inventory build.

Cash flow from investing activities amounted to CHF +52.4 million. The cash inflow of CHF 400.0 million from the sale of OM Pharma was largely reinvested in upfront and milestone payments for in-licensing agreements of CHF -193.5 million as well as the Priority Review Voucher of CHF -107.7 million.

Cash flow from financing activities amounted to CHF -268.4 million and was mainly influenced by dividend distributions of CHF -219.6 million, whereof CHF -90.0 million was paid to Fresenius Medical Care and CHF -129.6 million was distributed to shareholders of Vifor Pharma.

FINANCIAL POSITION

Vifor Pharma Group achieved a net cash position of CHF 190.6 million at the end of 2020 compared to a net cash position of CHF 5.7 million at the end of 2019. The increase is mainly from the aforementioned strong operating cash flow and sale of OM Pharma, more than offsetting the dividend distributions and investments.

Goodwill and intangible assets amounted to CHF 2,454.5 million at the end of 2020 compared to CHF 2,584.5 million at the end of 2019, representing 47.1% of total assets (2019: 52.4%). The decrease is mainly due to the disposal of intangible assets of CHF 156.6 million with the sale of OM Pharma.

Financial assets amounted to CHF 725.7 million at the end of 2020 compared to CHF 510.7 million at the end of 2019. The increase is mainly due to the fair value gain on our equity investments in ChemoCentryx, Inc. as well as the additional investment in Cara Therapeutics as part of the license agreement which was announced in October.

With CHF 4,017.6 million of shareholders’ equity, Vifor Pharma Group had a strong equity ratio of 77.1% at the end of 2020 (2019: 75.7%).

2. FINANCIAL GUIDANCE 2021

In 2021, at constant exchange rates, net sales are expected to grow at a low-to-mid single digit rate, and EBITDA to grow at a high single digit rate.2

3. OUTLOOK 2021

Market access

Clinical trials

Business development

In line with our ambition to strengthen our product pipeline, we aim to complete at least two in-licensing deals, product acquisitions or corporate transactions in 2021.

ANNUAL GENERAL MEETING 2021

The Annual General Meeting will take place as planned on 6 May 2021. However, in view of the ongoing COVID-19 pandemic and in accordance with Ordinance 3 on measures to combat the coronavirus issued by the Swiss Federal Council, on the basis of Art. 8 of the new COVID-19 Act, the Vifor Pharma Board of Directors decided that shareholders are not permitted to attend the event in person. Shareholders will be able to exercise their rights exclusively via independent proxy.

Live conference call and webcast

A live webcast and conference call will be held on 3 March 2021 at 14:00 (CET).

Access to live webcast → link

Access to conference call → link (only if you want to participate via phone)

Replay

A webcast replay (link) will be available shortly after the end of the live conference.

Vifor Pharma Group is a global pharmaceuticals company. It aims to become the global leader in iron deficiency, nephrology and cardio-renal therapies. The company is a partner of choice for pharmaceuticals and innovative patient-focused solutions. Vifor Pharma Group strives to help patients around the world with severe and chronic diseases lead better, healthier lives. The company develops, manufactures and markets pharmaceutical products for precision patient care. Vifor Pharma Group holds a leading position in all its core business activities and consists of the following companies: Vifor Pharma and Vifor Fresenius Medical Care Renal Pharma (a joint company with Fresenius Medical Care). Vifor Pharma Group is headquartered in Switzerland, and listed on the Swiss Stock Exchange (SIX Swiss Exchange, VIFN, ISIN: CH0364749348).

For more information, please visit viforpharma.com.

1 At CER.

2 The COVID-19 pandemic continues to impact economic conditions and patient access to our treatments; therefore Vifor Pharma’s 2021 guidance assumes a progressive improvement of patients’ access to the Company’s treatments as of H2 2021.

3 Core earnings are defined as reported earnings after minorities adjusted for proportionate amortization and impairment of intangible assets.

4 Without prejudice to market definition.

5 Unlike volume data, value data are unrepresentative of competitive dynamics because they sum different types of prices for different medicines.

Contacts

Contact and further information:

Media Relations
Nathalie Ponnier

Global Head Corporate Communications

+41 79 957 96 73

media@viforpharma.com

Investor Relations
Julien Vignot

Head of Investor Relations

+41 58 851 66 90

investors@viforpharma.com

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