Today, Medivir AB (OMX: MVIR), a research-based specialty pharmaceutical company focused on infectious diseases, is publishing its Interim Report for the period 1 January - 31 December and its operational report for the fourth quarter of 2011.
Medivir now enjoys a solid base to manage and keep developing the assets in its project portfolio, and to continue the build-up of its commercial platform. The acquisition of BioPhausia during the year was a clear and conscious step on the road towards Medivir's expressed goal of becoming a research-based and profitable specialty pharmaceutical company. This acquisition brought yearly sales of prescription pharmaceuticals on the Nordic market of just over SEK 500 m, and also gave us an all-new organization, which contributed to the company now having the breadth of know-how and operations extending from research and development to the marketing and sale of prescription pharmaceuticals. Medivir also possesses attractive projects in development phases, with TMC 435 being the most advanced, which is in clinical phase III. In combination with our ambition to identify new business opportunities in the Nordics, these factors are the foundation of our continued work to develop Medivir towards profitability.
The company's business operations
The Pharmaceuticals business area The Pharmaceuticals business area includes the group's research and development portfolio and the original pharmaceuticals owned by BioPhausia, as well as our self-developed cold sore pharmaceutical Xerclear®. This product was launched under the Xerese® brand by Meda in the US in the spring, and in summer, the American rights were sold for a one-off payment of USD 45 m (SEK 279 m). In the first quarter of 2012, our partner, GSK, commenced its launch of this cold sore compound on its first five European OTC markets, under the brands Zoviduo and Zovirax Duo.
Since Medivir's acquisition of BioPhausia in June, sales of original pharmaceuticals remained stable, with an unchanged positive EBITDA margin. Net sales for the fourth quarter from pharmaceutical sales were SEK 47.5 (0.0) m, and SEK 0.0 (0.0) m from outlicensing and partnership agreements. EBITDA for the fourth quarter amounted to SEK -36.3 (-55.3) m. EBITDA includes research and development costs of SEK -48.0 (-48.2) m.
Parallel imports in Cross Pharma
Net sales for the fourth quarter were SEK 84.7 m, which means that this business area achieved increased growth for the fifth consecutive quarter. EBITDA for the period was SEK 0.6 m. To exploit new business opportunities, which are expected to have a positive impact in 2012, Cross increased its employee headcount. This means that fixed costs increased in the final quarter, thus negatively affecting operating margins. We are convinced that through its preparations in the fourth quarter, Cross will be able to return to historically strong earnings levels.
R&DHepatitis C in the world around us
Future treatment of patients infected with hepatitis C of different genotypes will be based on combinations of pharmaceuticals with different action mechanisms, such as protease and polymerase inhibitors. The development of pharmaceuticals against hepatitis C is also heading towards attempting to remove interferon, and in the next stage, also ribavirin, from current standard of care (SoC). It is likely that this will only be achievable with two or more direct-acting antiviral compounds being combined in one therapy. The results from different small-scale, conceptual combination therapy without interferon, and in some cases, also without ribavirin, were also presented in the year. In late-2011 and early-2012, several corporate acquisitions were conducted with the aim of supplementing the buyers' proprietary development portfolios in this segment and this has resulted in a significant sharpening of competition in the development of new anti-hepatitis C pharmaceuticals. We also expect new combination trials to be conducted through the coming years, and that different partnership structures will be tested.
TMC435—Medivir's protease inhibitors
Like ourselves, several external commentators regard TMC435 as the best protease inhibitor currently, because in clinical phase IIb trials, it has demonstrated at least equal efficacy, a significantly superior safety profile, and is more easily dosed, i.e. once daily, than those protease inhibitors approved in 2011. In the year, our collaboration partner, Janssen Pharmaceuticals, commenced two clinical collaboration projects for combination therapy, the first with BMS and the second with Pharmasset, now taken over by Gilead. These companies have CDs in phase II, which have different mechanism of action to TMC435, and the aim is to evaluate efficacy and safety in combination therapy with each compound. Through these partnerships, TMC435 is well positioned in the front line of new alternatives for treating hepatitis C, without both interferon and ribavirin. The combination trials are about to be conducted for treating HCV genotype 1 infections, the most common and hardest-to-treat type of hepatitis C infection. Several trials on TMC 435 were also reported in the year, on treatment-naïve and treatment-experienced patients. Global phase III trials are currently ongoing, and we expect our partner to file a global new drug application (NDA) in the first half-year 2013.
Development program for polymerase inhibitors in partnership with Janssen Pharmaceuticals
TMC649128, a nucleoside NS5B polymerase inhibitor, was produced in a development program in partnership with Janssen. However, its antiviral efficacy did not achieve the predetermined target, and this clinical phase Ib trial was discontinued in the fourth quarter. Parallel work on developing a nucleotide-based polymerase inhibitor has been ongoing in this project. The CD has been designated, and this project is in preclinical development ahead of clinical trials.
Hepatitis C in-house
The company has two proprietary hepatitis C projects, one a nucleotide-based polymerase inhibitor and one NS5A replication complex inhibitor. Both are in preclinical optimization. In the former project, new and highly potent nucleotides have been identified, with profiles comparable to the most advanced compounds in clinical development phases. Patent applications have been filed, and work is focused on the selection of clinical development candidates. The program with the NS5A replication complex inhibitor is to develop the next generation of pharmaceutical with this action mechanism and the objective of treating a broader patient group than is possible with those CDs currently in clinical development.
Other projects
On the Cathepsin K project, for treating skeletal disorders, several preclinical trials were concluded in the year that are currently being evaluated. Assuming a positive outcome, this project is scheduled to enter clinical phase I trials in the first half-year 2012.
Maris Hartmanis CEO and President
Despite the hoopla, vaccines should be in reach this cough-and-cold season