HALF-YEAR REPORT 2018 - Vifor Pharma
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FULL
VERSION
HALF-YEAR
REPORT
2018
H1 2018
AT A GLANCE
H1 performance above expectations
›› H1 net sales CHF 747.4 million, up 23.4%
›› H1 EBITDA CHF 192.0 million, up 44.5%
›› Guidance raised: at constant exchange rates Vifor Pharma net sales are now
expected to grow by more than 15% in 2018 and EBITDA by more than 25%
Ferinject®
›› Net sales up 29.3% in H1; on track for growth of at least 20% on a full-year basis
Vifor Fresenius Medical Care Renal Pharma
›› Mircera® growth strong at CHF 214.0 million, up 38.1% from H1 2017
›› Conditional Marketing Authorization Application (phase-II data basis) for
avacopan under review for the treatment of ANCA-associated vasculitis
in Europe
›› Agreement signed with Cara Therapeutics to develop and commercialise
CR845/difelikefalin injection for haemodialysis patients with pruritus worldwide
outside US, Japan, South Korea
Veltassa®
›› Strong momentum, with net sales of CHF 36.8 million for H1 2018
(up 51.8% from CHF 24.3 million in H1 2017)
›› European launches in Germany, the UK and Switzerland
›› First successful ex-US reimbursement approval in Sweden and Denmark
›› US FDA approves label change enabling Veltassa® to be taken with
or without food
›› Exclusive development and marketing licence signed with
Zeria Pharmaceutical Co, Ltd. in Japan
Company evolution and leadership
›› Jacques Theurillat elected member of the Board of Directors
2 44 Vifor Pharma Ltd. Half-Year Report 2018
TABLE OF CONTENTS
HALF-YEAR REPORT
04 Executive message
06 Highlights H1 2018
09 Our vision and mission
10 Financial overview
12 Key growth drivers and products
26 Outlook
27 Guidance
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
30 Consolidated statement
of income
31 Consolidated statement
of comprehensive income
32 Consolidated statement
of financial position
33 Consolidated statement
of changes in equity
34 Consolidated statement
of cash flows
35 Notes to the consolidated
interim financial statements
KEY CORPORATE INFORMATION
42 Upcoming dates
43 Addresses
Vifor Pharma Ltd. Half-Year Report 2018 3 44
H1 2018
EXECUTIVE MESSAGE
In the first half of 2018, we continued to build on
our achievements in 2017, executing against our
strategy and delivering improved financial results.
These accomplishments were due first and foremost
to the dedication of our employees. At Vifor Pharma,
we have built a talented team committed to helping
patients with severe and chronic diseases to lead
better, healthier lives. We believe profoundly that
with this organisation we have built the foundations
required to become a global leader in iron deficiency,
nephrology and cardio-renal therapies.
DEAR SHAREHOLDER,
With our three strategic growth drivers all –– Build market awareness of iron deficiency and
performing strongly in H1 2018, revenues grew iron deficiency anaemia worldwide so that
23.4% compared to prior year to CHF 747.4 Ferinject®/Injectafer® achieves its blockbuster
million, and reported EBITDA was up 44.5% at potential.
CHF 192.0 million compared to CHF 132.9 million –– Focus on our strong product portfolio and
in H1 2017. As a result of this overperformance, provide innovative, patient-focused solutions
we have decided to raise our guidance. At to address the needs of dialysis and chronic
constant exchange rates Vifor Pharma net sales kidney disease (CKD) patients via Vifor Fresenius
are now expected to grow by more than 15% Medical Care Renal Pharma (VFMCRP), our
in 2018 compared to more than 10% as communi- joint company with Fresenius Medical Care.
cated on 15 March 2018. EBITDA is also –– Ensure that Veltassa® achieves its blockbuster
expected to increase by more than 25% instead potential by using it to treat chronic hyperkalae
of more than 20% that was communicated on mia and enable optimal renin-angiotensin-
15 March 2018. aldosterone-system inhibitor (RAASi) therapy.
As we work to deliver our 2020 goals, we are fully Ferinject®/Injectafer® continued to build on its
focused on executing our strategy for Vifor Pharma position as the market-leading intravenous (i.v.)
to become the global leader in iron deficiency, iron therapy worldwide through a combination of
nephrology and cardio-renal therapies. We will efficacy, safety and tolerability. As a result,
achieve this by continuing to do the following: we reconfirm our expectation for year-over-year
growth in 2018 to be in excess of 20%. In addition,
we remain convinced that Ferinject®/Injectafer®
4 44 Vifor Pharma Ltd. Half-Year Report 2018
will achieve in-market sales of more than CHF 1 As a result, real-world experience demonstrating
billion by 2020 at the latest. We are committed the efficacy and safety of Veltassa® is growing,
to fully exploiting the potential of Ferinject®/ generating support from clinicians and patients in
Injectafer® by focusing on key areas such as heart the US and increasingly in Europe, where Veltassa®
failure, gastroenterology, nephrology and patient is being made available in an increasing number
blood management; continuing to strengthen our of countries following approval in July 2017
partner business; executing on our lifecycle- (Switzerland in December 2017). The approval
management activities; and increasing our global in May of this year by the US Food and Drug
reach, such with our March 2018 submission of Administration (US FDA) to improve the label for
a New Drug Application (NDA) in Japan and then the use of Veltassa® with or without food will
a 2019 Japan launch. result in increased flexibility for many patients
seeking to include Veltassa® in their daily treat-
Our second strategic growth driver, our joint ment regimen. We were also pleased to move
company Vifor Fresenius Medical Care Renal a step closer to making Veltassa® available to
Pharma (VFMCRP), strengthened its position in hyperkalaemia patients in Japan by concluding
the nephrology indication due to its unique a licensing agreement granting exclusive rights
product offering and its access to the world’s to Zeria Pharmaceutical Co, Ltd. to develop
largest network of dialysis clinics. Established Veltassa® for the Japanese market. This further
products such as Mircera® continued to grow strengths our existing relationship with Zeria,
strongly, while at the same time we made impor- our Japanese partner for Ferinject®.
tant progress with our pipeline of promising new
products. The Conditional Marketing Authorisa- An exciting development in respect of our pipeline
tion (based on phase-II data) for our innovative in H1 2018 was the entry of our ferroportin
C5a receptor inhibitor, avacopan, is currently inhibitor into a phase-I clinical study. Initial data
being reviewed in Europe for the treatment of is expected before the end of 2018.
patients with ANCA-associated vasculitis. We
are also on track to file Rayaldee® in Europe for Finally, we are grateful to our shareholders and
treatment of secondary hyperparathyroidism once again to our employees for their continued
(SHPT) in adult patients with non-dialysis CKD loyalty and support.
with vitamin D insufficiency in H2 2018. VFMCRP’s
aim to strengthen its leadership in nephrology Very sincerely,
was underlined by our development and licensing
agreement with Cara Therapeutics that we con-
cluded in May to commercialise CR845 injection
outside of the US, Japan and South Korea for
the treatment of CKD disease-associated pruritus
in haemodialysis patients. Etienne Jornod Stefan Schulze
Executive Chairman of President of the
Veltassa® continued to grow in accordance with the Board of Directors Executive Committee
our expectations strengthening our strategic and COO
position in cardio-renal therapies and our overall
position in the key US market. First-half 2018 net
sales increased by 51.8% compared to prior year.
However, adjusting for inventory impacts and
revenue recognition changes, the increase was
79.6%, which is also reflected in the 81% growth in
weekly demand for boxes in the US year on year.
Vifor Pharma Ltd. Half-Year Report 2018 5 44
H1 2018
HIGHLIGHTS
FINANCIAL Net sales growth H1 net sales
HIGHLIGHTS
23.4 747.4 %
in million CHF
EBITDA Net profit Equity ratio
+44.5% 158.0 80.0%
or CHF 192.0 million in million CHF, or CHF 3,312.9 million
up 255.9%
Total Ferinject®/
Injectafer® sales Mircera® sales grow to Veltassa® net sales of
229.0
214.0 36.8
in million CHF, in million CHF
up 38.1%
in million CHF
erinject® net sales
F
CHF 169.5 million
I njectafer® net sales
CHF 59.5 million
6 44 Vifor Pharma Ltd. Half-Year Report 2018
BUSINESS Governance Core earnings per share
HIGHLIGHTS
Continued focus Jacques Theurillat elected to the
2.66
on strategic
growth drivers
Vifor Pharma Board of Directors
CHF
Ferinject®/Injectafer® VFMCRP Veltassa®
In May, US-FDA approved Launches in Europe continue,
29.3%
Pfizer’s biologics licence including in Switzerland,
application (BLA) for Germany and the UK
Retacrit™, which will be
marketed for the treatment US FDA approves label
growth compared of anaemia due to chronic change enabling Veltassa®
to prior year kidney disease (CKD) in to be taken with or without
dialysis and non-dialysis food
patients
Veltassa® marketing approval
for Switzerland for the
treatment of hyperkalaemia
is announced in January
Further strengthening of pipeline through strategic partnerships
March: licensing agreement concluded with Japanese company Zeria Pharmaceutical Co, Ltd.
to develop and commercialise Veltassa® in Japan
May: agreement signed with Cara Therapeutics to develop and commercialise CR845/
difelikefalin injection
Vifor Pharma Ltd. Half-Year Report 2018 7 44
8 44 Vifor Pharma Ltd. Half-Year Report 2018
VIFOR PHARMA GROUP
OUR VISION AND MISSION
With the transformation of Vifor Pharma Group
into a pharmaceutical company, we have clearly
defined our vision and our mission.
Our vision
Global leader in iron
deficiency, nephrology
and cardio-renal therapies.
The partner of choice for
specialty pharmaceuticals
and innovative patient-
focused solutions.
Our mission
We strive to help patients
around the world with
severe and chronic diseases
lead b
etter, healthier lives.
Vifor Pharma Ltd. Half-Year Report 2018 9 44H1 2018
FINANCIAL
OVERVIEW
KEY PROFIT AND LOSS FIGURES General and administration expenses amounted
to CHF 82.3 million compared to CHF 84.4 million
Vifor Pharma Group reported net sales in the first in H1 2017. The decrease is mainly attributable
half of 2018 grew to CHF 747.4 million, an increase to a recharge of management costs by Galenica
of 23.4% in CHF versus the prior year or 23.1% on Santé top management costs during the first
a constant currency basis. The application of the three months of 2017.
new revenue recognition standard (IFRS 15)
required a reclassification of certain elements The average number of full-time employees
between net sales and costs with zero impact on (FTE) for the Group amounted to 2,658 in H1 2018,
EBITDA. The new standard resulted in lower compared to 2,519 in H1 2017. The increase of
reported sales in H1 2018 of CHF 27.7 million and 139 FTEs is to a large extent driven by an expan-
in H1 2017 of CHF 19.8 million with fully compen- sion of Vifor Pharma’s commercial workforce.
sating effects in lower costs. EBITDA in H1 2018
rose to CHF 192.0 million compared to CHF 132.9 Amortisation and depreciations amounted to
million in the prior year, an increase of 44.5% or CHF 76.7 million vs. CHF 70.8 million in H1 2017
48.7% in local currency. and are mainly considered under cost of sales
(89% and 87%, respectively) as IP amortisations
Cost of sales amounted to CHF 288.1 million mainly for Veltassa® and Mircera®.
in H1 2018 compared to CHF 250.4 million in the
prior period. Other income decreased from The financial result in H1 2018 was CHF 41.8
CHF 56.1 million in H1 2017 to CHF 41.0 million million positive compared to a financial loss in
in H1 2018 due to an expected decline in H1 2017 of minus CHF 5.2 million. The increase in
CellCept® entering the sunset period. financial income to CHF 47.5 million compared
to CHF 15.0 million in H1 2017 was mainly attrib-
Gross profit increased by 21.5% from CHF 411.6 utable to a CHF 42.9 million foreign exchange
million in H1 2017 to CHF 500.2 million in H1 2018 gain on USD intercompany loans of approximately
with an improved gross profit margin of 63.5% USD 1,084 million related to the Relypsa acquisition
(H1 2017: 62.2%) mainly due to strong Ferinject® in 2016. Until 24 March 2018, these loans were
growth overcompensating the decline in other considered equity loans and re-measured
income. through other comprehensive income (OCI). On
24 March 2018 (USD/CHF rate of 0.95), manage-
Marketing and distribution expenses amount- ment changed its intent with regards to the
ed to CHF 210.9 million, up 17.9% compared to settlement of the IC loans, which led to the
prior period. The main drivers were the invest- subsequent revaluation of these loans through
ments in the European commercial organisations P&L. Vifor Pharma effectively settled these
for the continued rollout of Veltassa®. loans as of 30 June 2018 (USD/CHF rate of 0.99).
Additionally, interest expense was reduced
First half-year investments in R&D amounted to to CHF 5.7 million compared CHF 20.2 million
CHF 91.9 million compared to CHF 86.2 million in 2017 due to the repayment of the bridge loan
in the prior period. The increase on prior year was of CHF 1.45 billion in April 2017.
driven by clinical studies in Ferinject®, Veltassa®
and the ferroportin inhibitor. Tax income of CHF 1.0 million was reported in
H1 2018 due to cash taxes being fully offset by
capitalisation of previously unrecognised tax-loss
carry forwards in the US and Switzerland.
10 44 Vifor Pharma Ltd. Half-Year Report 2018Net profit after minorities for H1 2018 decreased Cash flow from financing activities of minus
to CHF 118.0 million compared to CHF 1,093.7 CHF 163.6 million was mainly driven by the
million in the previous year, which included repayment of the private placement notes of
CHF 1,103.3 million from discontinued operations CHF 114.3 million and a dividend distribution to
as a result of the IPO of Galenica Santé. Fresenius Medical Care of CHF 45.0 million.
Also, the 2017 dividend of CHF 129.6 million was
Core earnings per share H1 2018 were CHF 2.66. distributed to shareholders in May 2018. The
Core earnings are defined as reported earnings overall cash flow for H1 2018 was minus CHF 310.6
after minorities adjusted for amortisation of million, resulting in a decrease in the cash
intangible assets to normalise for the significant position from CHF 425.1 million at the end of
impact from the acquisition of Relypsa. In 2017 to CHF 114.5 million as of 30 June 2018.
H1 2018, attributable amortisation of intangible
assets amounted to CHF 54.5 million.
SOLID BALANCE SHEET
CASH FLOWS AND FINANCIAL POSITION Goodwill and intangible assets at the end of
H1 2018 amounted to CHF 2,710.3 million or
Cash flow from operating activities for H1 2018 65.5% of total assets of CHF 4,138.9 million, with
amounted to CHF 38.4 million compared to the majority of these related to the acquisition
CHF 28.8 million in the prior-year period. of Relypsa. Cash and cash equivalents at the end
of H1 2018 amounted to CHF 114.5 million or
Cash flow from investing activities of minus 2.8% of total balance sheet assets. Net debt was
CHF 185.8 million was mainly due to the agree- CHF 127.5 million resulting in a net-debt-to-
ments signed with Cara Therapeutics amounting EBITDA ratio of 0.38 at the end of H1 2018. With
to CHF 70.1 million, the milestone payment for CHF 3,312.9 million of shareholders’ equity,
the acceptance of the Conditional Marketing Vifor Pharma had a strong equity ratio at the end
Authorization application for avacopan amount- of H1 2018 of 80.0%. The return on equity after
ing to CHF 49.0 million, commercialisation minorities (from continued operations) amounted
rights for Mircera® and Retacrit™ amounting to to 3.9% in H1 2018, compared to minus 0.4%
CHF 17.5 million, as well as ordinary capital in H1 2017.
expenditures of CHF 26.3 million.
Net sales EBITDA
747.4 +44.5%
in million CHF +48.7% in local currency
Vifor Pharma Ltd. Half-Year Report 2018 11 44Key Growth Drivers
AT A GLANCE
FERINJECT® Market-leading product Available worldwide in Defined daily doses
N°1
intravenous iron
75
countries
104.7
million
product worldwide
VIFOR Portfolio Fresenius Medical Care Collaborations
FRESENIUS
MEDICAL The most Partnering with Accessing
CARE RENAL
comprehensive Fresenius Medical innovation through
PHARMA
portfolio for Care to ensure strategic
kidney patients the optimal treatment partnerships
for each patient
VELTASSA® Patent protection Real-world experience Long-term management
Patent protected Three years and more Sodium-free for
until 2030 and than fifty thousand long-term
ex-US until 2029 patients’ real-world hyperkalaemia
experience management
12 44 Vifor Pharma Ltd. Half-Year Report 2018Key Growth Drivers
STRONG PERFORMANCE
IN H1 2018
Three strategic growth drivers
Vifor Pharma has three strategic growth
drivers: Ferinject®/Injectafer®, the world’s
leading intravenous (i.v.) iron product
—
The joint company, Vifor Fresenius Medical
Care Renal Pharma (VFMCRP), providing
innovative pharma solutions to address the
needs of chronic kidney disease patients,
whether on dialysis or not
—
Veltassa®, launched for the treatment
of patients with hyperkalaemia in Europe,
the United States and Australia
Iron deficiency Nephrology Cardio-renal
Vifor Pharma Ltd. Half-Year Report 2018 13 44Key Growth Drivers
FERINJECT®/INJECTAFER®
The first of our growth drivers is Ferinject® REPORTED NET SALES IN H1 2018
(in the US: Injectafer®), which is the market- In H1 2018, overall reported net sales of
leading intravenous (i.v.) iron therapy. By the Ferinject® increased by CHF 51.9 million (29.3%)
to 229.0 million. Approximately 3.8% of the
end of June 2018, the product was approved reported increase in H1 2018 was due to phasing
in 75 countries, with over 7.5 million years and timing differences in the ordering patterns
of our wholesale customers. Another 3.5% of the
of patient experience and over 104 million reported net sales increase in H1 2018 was due
defined daily doses (DDDs), demonstrating to the favourable impact on foreign currency rates.
broad market demand and a well-accepted On a full-year basis in 2018, we expect the
benefit/risk profile of the brand. Vifor Pharma increase in reported net sales of Ferinject®/
Injectafer® versus prior year to be in excess
is committed to further building market of twenty per cent at constant exchange rates.
awareness of the benefits of i.v. iron therapy
to patients suffering from iron deficiency GLOBAL IN-MARKET SALES
in multiple therapeutic areas.
We closely monitor in-market sales to determine
Given its current growth trajectory and the actual growth rates for the product. The latest
available IQVIA data from March 2018 indicates
significant remaining unmet medical need, global market sales of Ferinject®/Injectafer®
Ferinject® remains positioned to continue to moving annual total (MAT) of approximately
CHF 741.6 million, an increase of 29.7% versus the
provide relief from the burden of iron defi- prior-year period. In addition, we saw an increase
ciency in multiple patient groups and thereby in overall i.v. iron market share to 45.7% compared
to 39.8% in the prior year.
achieve in-market sales in excess of CHF 1
billion by 2020 at the latest.
INJECTAFER® (US)
Injectafer® continues to drive the growth of
IN ORDER TO ACHIEVE THIS OBJECTIVE, the US intravenous iron market. US partner
VIFOR PHARMA HAS DEVELOPED A PLAN Luitpold Pharmaceuticals, Inc., a member of the
CONSISTING OF FOUR KEY COMPONENTS: Daiichi-Sankyo Group, recorded net sales
of USD 180.8 million in H1 2018, an increase of
–– First, address key iron deficiency indications 42.6% compared to H1 2017. In the US, Vifor
such as cardiology, gastroenterology, nephrol- Pharma received a portion of Daiichi Sankyo’s
ogy and patient blood management. reported Injectafer® net sales, resulting in
–– Second, expand geographically by launching reported net sales of CHF 59.5 million (USD 61.5
in key countries such as Japan with our partner, million) in H1 2018, a 38.8% increase compared
Zeria, in 2019 and in China in 2021. to CHF 42.9 million (USD 43.1 million) in H1 2017.
–– Third, further strengthen our collaboration with
existing partners such as Daiichi Sanko in the US.
–– Fourth, manage the life cycle by generating
clinical data from studies such as AFFIRM-AHF
and HEART-FID.
14 44 Vifor Pharma Ltd. Half-Year Report 2018IMPORTANT SCIENTIFIC AND MARKET American Regent, a member of the Daiichi
AWARENESS ACTIVITIES OUTSIDE THE US Sankyo group, is enrolling patients into one of the
largest studies of i.v. iron in heart failure, the
In line with our commitment to further build HEART-FID study. HEART-FID is a double-blind,
market awareness, several activities were multi-centre, prospective, randomised, place-
launched during the first half of 2018 in our bo-controlled clinical outcome study to assess
cardio-renal patient segment. Among them were the efficacy and safety of Injectafer® in the
global awareness campaigns on iron deficiency treatment of patients with heart failure, iron
in chronic heart failure. Awareness was raised deficiency and a reduced ejection fraction.
around Ferinject® as the recommended treatment Iron deficiency affects up to half of all heart
option in guidelines for chronic heart failure failure patients.
patients with iron deficiency. Awareness-building
activities for other patient groups included Our partner in Japan, Zeria, submitted a New
publishing research on the cost effectiveness of Drug Application (NDA) for Ferinject® to
using Ferinject® in pre-operative settings as local authorities in March 2018, a key step in
a component of patient blood management building access to the Japanese market.
(PBM). PBM revolves around ensuring that patients
who may need blood transfusions receive optimal A phase-III pivotal approval study of Ferinject®
care. The benefits of PBM are manifold, including in China is progressing according to plan.
smaller/fewer transfusions, shorter hospitalisa-
tions, better clinical outcomes and reduced cost. Net sales of Ferinject® outside the US in H1 2018
increased by 26.3% to CHF 169.5 million com-
A large randomised, controlled trial in acute pared to CHF 134.2 million in the first half of the
heart failure, the AFFIRM-AHF trial, continued to previous year.
investigate the effect of Ferinject® on outcomes
in patients after stabilisation following an episode
of acute heart failure. Morbidity and mortality
outcomes with Ferinject® versus placebo will also
be analysed independently in the FAIR-HF2
investigator-initiated study.
Vifor Pharma Ltd. Half-Year Report 2018 15 44Key Growth Drivers
Other key nanoparticle-based iron products
VENOFER® MALTOFER® AND OTHER
ORAL IRON PRODUCTS
Venofer®, the originator i.v. iron sucrose product,
continued to be the leading intravenous iron Net sales of other iron products totalled CHF 39.8
brand in terms of volume usage worldwide and million in H1 2018, an increase of 14.9% com-
is the trusted gold standard in iron therapy for pared to the prior year. This includes sales of the
dialysis patients. In H1 2018, more than 31 million leading oral iron product Maltofer®. In H1 2018,
doses of Venofer® equivalent to 100 mg were net sales of Maltofer® increased by 19.7%
used worldwide. Overall monitored usage of compared to the prior year to CHF 34.1 million.
Venofer® now correlates to over 23 million patient
years of clinical experience.
VIT-2763
Venofer® is a nanomedicine and recognised IN DEVELOPMENT
by the US FDA as a complex drug with stringent
regulatory requirements for the approval VIT-2763, the first-ever oral ferroportin inhibitor
of a potential follow-on product. The positive for preventing iron overload, entered clinical
experience of generations of physicians and development in March 2018. First results from the
patients compared to other nanoparticle-based phase-I study are expected in the second half
iron products (iron sucrose similars) has helped of 2018.
to secure the position of Venofer® in a highly
competitive environment of low-dose i.v. iron VIT-2763 is an orally administered small molecule
products. The reliability of Venofer® is a key developed by Vifor Pharma. Intended for daily
differentiator and one of the main reasons the administration, VIT-2763 has the potential to treat
brand retains strong demand after many diseases with impaired iron metabolism. Ferro-
decades on the market. portin is an iron transporter that plays a key role
in regulating iron uptake and distribution in the
In H1 2018, Venofer® net sales increased by 11.6% body and thus in controlling iron levels in the
versus prior year to CHF 59.6 million. The majority blood. At the molecular level, VIT-2763 binds to
of Venofer® sales continue to be in the US and ferroportin and blocks it to prevent excessive
Canada. iron release into the blood. Pre-clinical evidence
serving as the basis for the clinical development
Outside North America, Venofer® is distributed of VIT-2763 revolves around its efficacy for
mainly via our partner network and therefore reducing elevated blood and tissue iron levels
reported net sales in any single period can be and for restricting iron uptake in patients suffering
significantly affected by the ordering patterns from conditions in which iron metabolism is
of our partners. altered.
VFMCRP continued to support Kidney Research
UK on the PIVOTAL trial, a study to investigate
optimised iron deficiency treatment in haemo
dialysis patients, which includes the use of
Venofer®. Completion of the study is expected
in 2018.
16 44 Vifor Pharma Ltd. Half-Year Report 2018Vifor Pharma Ltd. Half-Year Report 2018 17 44
Key Growth Drivers
VIFOR FRESENIUS
MEDICAL CARE RENAL
PHARMA (VFMCRP)
Our second strategic growth driver is Mircera® for the treatment of paediatric patients
5 to 17 years of age on haemodialysis.
Vifor Fresenius Medical Care Renal Pharma
(VFMCRP), our joint company with Fresenius
VELPHORO®
Medical Care. VFMCRP was established
in 2010 and is dedicated to addressing the Reported net sales of the phosphate binder,
Velphoro®, decreased by 8.9% in H1 2018 to
needs of chronic kidney disease patients CHF 35.8 million. However, adjusting for a
around the world, whether they are on dialysis year-over-year customer inventory decrease of
CHF 10.5 million, net sales would have increased
or not. The collaboration with Fresenius by 22.1% in H1 2018 compared to prior year.
Medical Care provides VFMCRP access to the On a full year basis in 2018, we expect the increase
in reported net sales of Velphoro® versus prior
world’s largest network of dialysis clinics. year to be approximately twenty per cent at
The joint company has already built a strong constant exchange rates.
product portfolio by concluding commercial, The global rollout of Velphoro® continued during
pre-commercial and late-stage in-licensing H1 2018, including regulatory approval in Canada
in January 2018 and in South Korea in March
deals. VFMCRP is well positioned to achieve its 2018. As of 30 June 2018, Velphoro® is registered
goal of being the global leader in nephrology in 41 countries and available in 24.
through its focus on renal pharmaceuticals On the back of the important real-world study,
and innovative, patient-focused solutions. Coyne et al (2017), in the US, the use of Velphoro®
in real-life conditions is also being investigated
under the European phase-IV VERIFIE study,
including patients in Spain, Germany, France, the
MIRCERA® Netherlands, the UK, Italy and Greece. Recruitment
concluded in April with 1,400 patients enrolled.
Net sales of Mircera® increased strongly in An interim analysis presented at the European
H1 2018 to CHF 214.0 million, an increase Nephrology Congress in May 2018 confirmed the
of 38.1% compared to the prior year period. efficacy and safety of Velphoro® in real-life use.
Mircera® is a long-acting erythropoiesis-stimulating Following a licence and supply agreement for
agent (ESA) that was licensed from Roche in May the development and commercialisation
2015 to treat symptomatic anaemia associated with of Velphoro® in China in March 2017, VFMCRP
chronic kidney disease. Vifor Pharma has exclusive and its partner are initiating a clinical study.
rights to commercialise Mircera® in the US and its The clinical trial was approved by the first ethics
territories. In September 2017, Vifor Pharma and committee in China and patient enrolment is
Roche expanded their collaboration agreement, expected to begin in August.
giving Vifor Pharma access to additional supplies of
Mircera® for the US market. This increased volume
is enabling Vifor Pharma to now meet the needs of
new and existing partners and is the key driver
of the strong revenue growth of Mircera® in the first
half of 2018. In June 2018, the US FDA approved
18 44 Vifor Pharma Ltd. Half-Year Report 2018RAYALDEE® RETACRIT™
PRE-COMMERCIAL EX-US
On 15 May 2018, the United States Food and
VFMCRP obtained rights from OPKO Health in Drug Administration approved Pfizer’s biologics
May 2016 to commercialise extended-release licence application (BLA) for Retacrit™ for
calcifediol capsules (US brand name: Rayaldee®) the treatment of anaemia due to chronic kidney
for the treatment of secondary hyperparathy- disease (CKD) in patients on dialysis and not
roidism (SHPT) in patients with chronic kidney on dialysis. Retacrit™ is now the first and only
disease (CKD) and vitamin D insufficiency in biosimilar ESA to be approved in the US.
Europe, Canada and certain other key markets.
Vifor Pharma holds the US commercialisation
VFMCRP obtained regulatory approval for rights for Retacrit™ (epoetin alfa-epbx) in the US
Rayaldee® for the treatment of SHPT in CKD dialysis market and non-hospital nephrology
stage 3 and 4 with vitamin D insufficiency in office market. Adding a short-acting ESA to the
Canada in July 2018. portfolio is further strengthening Vifor Pharma’s
position in the US EPO market in the medium
VFMCRP plans to file a regulatory dossier for term. The launch of Retacrit™ in the US is expected
Rayaldee® in Europe for the treatment of adult in H2 2018.
patients with SHPT and vitamin D deficiency
with non-dialysis CKD (ND-CKD) with vitamin D
insufficiency in H2 2018.
Vifor Pharma Ltd. Half-Year Report 2018 19 44Key Growth Drivers
AVACOPAN/CCX168 On 4 January 2018, VFMCRP and ChemoCentryx
IN DEVELOPMENT announced that the Conditional Marketing
Authorisation application (based on available
Avacopan is an orally administered, selective phase-II data) for avacopan in the treatment
complement 5a receptor (C5aR) inhibitor being of patients with ANCA-associated vasculitis had
developed and investigated by ChemoCentryx. been accepted for review by the EMA. Under
This small molecule is currently in development the terms of the kidney health alliance between
for orphan and rare renal diseases in which C5aR ChemoCentryx and VFMCRP, the acceptance
may play a key therapeutic role, including two triggered a milestone payment of USD 50 million
forms of anti-neutrophil cytoplasmic auto-anti- to ChemoCentryx. Full marketing authorisation
body-associated vasculitis (ANCA-associated will be filed once the ADVOCATE study is
vasculitis; microscopic polyangiitis, MPA, and completed at the end of 2019.
granulomatosis with polyangiitis, GPA) and
C3 glomerulopathy (C3G).
CCX140
In February 2017, following an expansion of IN DEVELOPMENT
their original agreement with US partner and
biopharmaceutical company, ChemoCentryx, CCX140 is an orally administered inhibitor of
VFMCRP was granted exclusive rights to market the chemokine receptor known as CCR2.
avacopan everywhere outside the US and This orphan drug candidate is in development
China, where commercial rights were retained by ChemoCentryx for the treatment of focal
by ChemoCentryx. segmental glomerulosclerosis (FSGS). FSGS is
a disease of the kidneys that can cause nephrotic
In 2017, a global phase-III study, ADVOCATE (for syndrome, which is associated with protein
more information visit clinicaltrials.gov), began in the urine, low blood albumin levels and high
worldwide patient enrolment. ADVOCATE will blood lipids.
evaluate the efficacy of avacopan to induce and
sustain remission in patients with active ANCA- In December 2016, Vifor Pharma licensed
associated vasculitis (GPA or MPA) when used worldwide rights outside the United States and
in combination with cyclophosphamide followed China to develop and commercialise CCX140.
by azathioprine, or in combination with rituximab.
Patient enrolment for this trial was completed Clinical and pharmaceutical development is
in July 2018 except in Japan, where recruitment progressing as planned for FSGS. An early clinical
of patients is ongoing. The Japanese regulatory development plan is underway to examine
authority, the Pharmaceuticals and Medical the use of CCX140 in two primary FSGS patient
Devices Agency (PMDA), granted our commercial populations.
partner for Japan, Kissei Pharmaceutical Co Ltd,
permission to include Japanese study subjects in
the ADVOCATE trial.
20 44 Vifor Pharma Ltd. Half-Year Report 2018VADADUSTAT Under the terms of the agreement, Cara Thera-
IN DEVELOPMENT peutics received an upfront payment of USD 50
million in cash, and Vifor Pharma made an equity
Vadadustat, being developed by US biopharma- investment of USD 20 million to acquire Cara
ceutical, Akebia Therapeutics, Inc., is an oral Therapeutics common stock. Cara Therapeutics
hypoxia-inducible factor prolyl hydroxylase will also be eligible to receive additional pay-
inhibitor (HIF-PHI) currently in global phase-III ments upon achievement of certain regulatory
development for the treatment of anaemia and commercial milestones, as well as tiered
due to chronic kidney disease. Vadadustat is royalties on net sales of CR845 injection for
an investigational therapy and is not approved CKD-aP in the licensed territories.
by the US Food and Drug Administration (FDA)
or any regulatory authority. Cara Therapeutics retains development and
commercialisation rights for CR845 injection
for the treatment of CKD-aP in the US. Cara
CR845 INJECTION Therapeutics will solely promote the product in
IN DEVELOPMENT all non-FMC clinics in the US once approved.
VFMCRP and Cara Therapeutics will promote the
CR845 injection is a powerful itch and inflamma- drug to FMCNA (Fresenius Medical Care North
tion suppressant without the undesirable side- America) dialysis clinics under a profit-sharing
effects typical of an opioid medicine such as arrangement.
hallucination or opioid addiction. This investiga-
tional medicine was designated a breakthrough VFMCRP has also secured the first right of
therapy for CKD-aP in haemodialysis patients negotiation for using CR845 injection to treat
by the FDA in June 2017 and shows compelling post-operative pain outside of the US, Japan
phase-II data on safety and efficacy. Cara is and South Korea.
conducting a phase-III study in uremic pruritus to
test the efficacy of CR845 injection in haemodial-
ysis patients suffering from moderate-to-severe
CKD-aP in the United States; data are expected in
2019. If approved, CR845 injection will be the
first medicine for this indication outside of Japan.
On 23 May 2018, we announced a development
and licensing agreement with US biopharmaceu-
tical Cara Therapeutics, Inc, to commercialise
CR845 (difelikefalin) injection for the treatment of
CKD-associated pruritus (CKD-aP), a highly
debilitating disease, in haemodialysis patients
worldwide, excluding the US, Japan and
South Korea.
Vifor Pharma Ltd. Half-Year Report 2018 21 44Key Growth Drivers
VELTASSA®
Our third strategic growth driver is Veltassa®, On 8 May, the US FDA approved a supplemental
New Drug Application (sNDA) to enable the
a treatment for elevated potassium levels, use of Veltassa® with or without food, potentially
or hyperkalaemia, a life-threatening and often providing patients with greater flexibility in
incorporating Veltassa® in their daily treatment
asymptomatic condition that occurs most regimen. The label update was based on results
frequently in patients with chronic kidney from the phase-IV TOURMALINE study, which
showed no statistically significant difference
disease and heart failure. between the groups taking Veltassa® with or with-
out food in achieving serum potassium levels
within the target range (3.8 to 5.0 mEq/L).
In H1 2018, reported net sales of Veltassa® In the first half of 2018, Veltassa® was launched in
CHF 36.8 million compared to CHF 24.3 million Germany, the UK and Switzerland. On 18 May
in H1 2017, an increase of 51.8% or 56.3% on the Dental and Pharmaceutical Benefits Agency
a constant currency basis. However, adjusting for (TLV) in Sweden issued the first ex-US positive
year-over-year inventory changes at wholesalers reimbursement decision for Veltassa®, followed
the increase was 79.6%, which was reflected in the by launch in June 2018. Reimbursement negotia-
81% growth in the weekly demand for sachets tions and launches will continue across Europe
in the US. This is because H1 2017 net sales were throughout 2018 and 2019.
elevated by approximately CHF 3 million due to
inventory increases at wholesalers, while H1 2018 In March, Vifor Pharma concluded a licensing
net sales were reduced by about CHF 1 million agreement with Zeria Pharmaceutical Co, Ltd,
due to lower wholesaler inventory levels. granting Zeria exclusive right to develop Veltassa®
for the Japanese market and, once marketing
On a full year basis in 2018, we expect the authorisation has been granted, to commercialise
reported net sales of Veltassa® to be in the range it in Japan. The collaboration with Zeria repre-
of USD 90 million. In the US, sales growth in sents an important step in Vifor Pharma’s ambition
H1 2018 was driven by an overall increase of market to make Veltassa® available to patients
awareness of Veltassa® and hyperkalaemia worldwide. Having Veltassa® and Ferinject®
and continued growth in retail. The addressable commercialised through the same partner
patient population and our experience with represents a substantive step for Vifor Pharma
Veltassa® since launch confirm our view that the in its goal towards expanding its cardio-renal
product has blockbuster potential. network and becoming the global leader in
cardio-renal therapies.
Veltassa® is only half-way through its third
year since launch. We are continuing to make Recruitment for the AMBER study for treatment
significant progress in building market awareness of patients with resistant hypertension started in
for this new therapy as a means for treating 2016 is expected to conclude at the end of 2018,
chronic hyperkalaemia. Throughout this process, with top-line results in H1 2019. The EMERALD
we constantly compare our experience of study, initiated in 2017, to test the safety and
successfully launching Ferinject® and building efficacy of Veltassa® in paediatric patients is
market awareness. progressing as planned. Study protocol develop-
ment of the DIAMOND outcome-based study
for RAASi enabling is ongoing through 2018 with
study initiation planned in H2 2018.
22 44 Vifor Pharma Ltd. Half-Year Report 2018Vifor Pharma Ltd. Half-Year Report 2018 23 44
Key Growth Drivers
INFECTIOUS DISEASES/OTX
We continue to optimise our anti-infectives
(infectious diseases/OTX) product portfolio
to deliver value to a focused group of
patients with high unmet medical need.
The three leading products in the ID/OTX
portfolio are Broncho-®, Uro-Vaxom® and
Doxium®.
BRONCHO-VA XOM® DOXIUM®
Net sales of Broncho-Vaxom® decreased 7.0% Net sales of Doxium® in H1 2018 were CHF 10.9
(CHF 26.1 million) in H1 2018 compared million, an increase of 12.2% compared to prior
to the previous year of CHF 28.1 million. This year. The focus was particularly on key emerging
decrease was primarily due to customers in pharma markets such as Turkey, Brazil and
Europe increasing inventory levels in H1 2017. The China. Our partner in China, Merck Serono,
generation of new clinical data, such as in the a leader in the local diabetes market, increased
ORBEX trial or other studies, is currently investi- its promotion of Doxium® in the management
gating how Broncho-Vaxom’s® unique immuno- of diabetes-related micro-vascular complications.
modulating properties can be used to stave The Chinese government authorities selected
off respiratory tract infections in at-risk paediatric Doxium® as the reference medicine for calcium-
populations. This ongoing effort supports our dobesilate.
strategy to further strengthen our position in the
scientific/regulatory field worldwide.
URO-VA XOM®
Net sales of Uro-Vaxom® in H1 2018 were CHF 7.7
million, an increase of 16.6% compared to prior
year. Overall market profitability and market share
have been increasing consistently in recent years.
This trend demonstrates the need to prevent
recurrent urinary tract infections with a product
recommended in international guidelines to
reduce the use of antibiotics as recently discussed
at the FIUR (“Foro en Infeccionas Urinarias
Recurrentes”; English: Forum on Recurring
Urinary Tract Infections) scientific congress on
antibiotic resistance in May in Mexico City.
24 44 Vifor Pharma Ltd. Half-Year Report 2018Vifor Pharma Ltd. Half-Year Report 2018 25 44
H1 2018
OUTLOOK
CLINICAL
Recruitment will continue in the AFFIRM-AHF phase-IV trial
of Ferinject® for acute heart failure. The trial is the first study to
investigate the effects of i.v. iron therapy on mortality and
morbidity of acute heart failure patients. The study is currently
in recruitment.
Recruitment for the AMBER study of Veltassa® for treatment
of patients with resistant hypertension started in 2016 and
is expected to conclude at the end of 2018, with top-line results
at H1 2019. Study initiation of the DIAMOND outcome-based
study for RAASi enabling is planned in H2 2018.
A study to test the safety and efficacy of Velphoro® for treating
hyperphosphataemia in adults is expected to begin in China
in 2018.
PRODUCT LAUNCHES
Veltassa® will continue to be launched in selected countries
across Europe.
PARTNERING
We expect to partner the Japanese rights for CCX140 before
the end of 2018.
26 44 Vifor Pharma Ltd. Half-Year Report 2018H1 2018
GUIDANCE
GUIDANCE
Due to the strong financial In 2020 net sales are expected
performance of Vifor Pharma in to exceed CHF 2 billion and
H1 2018 the guidance for the EBITDA to reach a high triple-
full year 2018 that was issued on digit level.
15 March 2018 in respect of net
For 2018 and 2019, the dividend
sales and EBITDA is increased.
is expected to be at the same
At constant exchange rates level as for 2017. From 2020
Vifor Pharma net sales are now onwards, the payout ratio is
expected to grow by more than targeted at 35% of net income.
15% in 2018 compared to more
than 10% communicated on
15 March 2018. EBITDA is also
expected to increase by more
than 25% instead of more than
20% that was communicated
on 15 March 2018.
Vifor Pharma Ltd. Half-Year Report 2018 27 44H1 2018 CONSOLIDATED INTERIM FINANCIAL STATEMENTS 28 44 Vifor Pharma Ltd. Half-Year Report 2018
TABLE OF CONTENTS
30 Consolidated statement
of income
31 Consolidated statement
of comprehensive income
32 Consolidated statement
of financial position
33 Consolidated statement
of changes in equity
34 Consolidated statement
of cash flows
35 Notes to the consolidated
interim financial statements
Vifor Pharma Ltd. Half-Year Report 2018 29 44CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF INCOME
2018 2017*
in million CHF — unaudited figures 1.1.—30.6. 1.1.—30.6.
Net sales 747.4 605.9
Other income 41.0 56.1
Cost of sales (288.1) (250.4)
Gross profit 500.2 411.6
Marketing and distribution (210.9) (178.9)
Research and development (91.9) (86.2)
General and administration (82.3) (84.4)
Operating profit (EBIT) 115.2 62.1
Financial income 47.5 15.0
Financial expenses (5.7) (20.2)
Profit before income taxes (EBT) 157.0 56.9
Income tax 1.0 (12.5)
Profit from continuing operations 158.0 44.4
Profit from discontinued operations - 1,103.3
Net profit 158.0 1,147.7
Attributable to:
››Shareholders of Vifor Pharma Ltd. 118.0 1,093.7
››Non-controlling interests 40.0 54.0
Earnings per share in CHF
Basic earnings per share 1.82 16.88
Diluted earnings per share 1.82 16.87
Earnings per share from continuing operations in CHF
Basic earnings per share 1.82 (0.15)
Diluted earnings per share 1.82 (0.15)
Earnings per share from discontinued operations in CHF
Basic earnings per share - 17.03
Diluted earnings per share - 17.02
* Figures for 2017 are restated; refer to note 5.2 for further details.
30 44 Vifor Pharma Ltd. Half-Year Report 2018CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
2018 2017
in million CHF — unaudited figures 1.1.—30.6. 1.1.—30.6.
Net profit 158.0 1,147.7
Hedging transactions
››Change in fair value (0.6) 0.4
››Realised in profit or loss (0.7) -
Translation differences (10.9) (109.5)
Items that will be reclassified subsequently to profit or loss (12.2) (109.1)
Remeasurements of the net defined benefit liability/(asset) (0.7) 26.3
Change in fair value of financial assets measured through
other comprehensive income 1) 15.7 7.0
Income tax (2.6) (5.8)
Share of other comprehensive income from joint ventures - 0.4
Items that will not be reclassified to profit or loss 12.4 27.9
Other comprehensive income 0.2 (81.2)
Total comprehensive income 158.2 1,066.5
Attributable to:
››Shareholders of Vifor Pharma Ltd. 108.7 1,010.4
››Non-controlling interests 49.5 56.1
1)
As a result of the IFRS 9 adoption, a new line item was included for the fair value adjustments that will not be subsequently reclassified to
profit or loss; refer to note 5.2 for further details. The prior period was also adjusted for comparability.
Vifor Pharma Ltd. Half-Year Report 2018 31 44CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
2018 2017
in million CHF — unaudited figures 30.6. 31.12.
Cash and cash equivalents 114.5 425.1
Financial assets 0.7 1.5
Trade and other receivables 510.4 407.4
Tax receivables 4.5 4.6
Inventories 274.9 232.0
Prepaid expenses and accrued income 25.5 22.9
Current assets 930.5 1,093.5
Property, plant and equipment 255.4 245.6
Intangible assets 2,710.3 2,651.1
Financial assets 161.3 118.1
Deferred tax assets 81.3 17.6
Employee benefit assets - 0.1
Non-current assets 3,208.3 3,032.4
Assets 4,138.9 4,125.9
Financial liabilities 25.8 139.6
Trade and other payables 157.5 174.2
Tax payables 83.8 50.3
Accrued expenses and deferred income 225.1 224.0
Provisions 2.5 0.8
Current liabilities 494.6 588.9
Financial liabilities 284.8 154.8
Deferred tax liabilities 33.6 41.8
Employee benefit liabilities 12.8 7.8
Provisions 0.1 0.2
Non-current liabilities 331.4 204.5
Share capital 0.7 0.7
Reserves 3,048.3 3,072.4
Equity attributable to shareholders of Vifor Pharma Ltd. 3,048.9 3,073.1
Non-controlling interests 264.0 259.4
Shareholders’ equity 3,312.9 3,332.5
Liabilities and shareholders’ equity 4,138.9 4,125.9
32 44 Vifor Pharma Ltd. Half-Year Report 2018CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Foreign
currency Non-
Share Treasury Retained translation Fair value controlling Total
in million CHF — unaudited figures capital shares earnings reserves reserves Total interests equity
31 December 2016 0.7 (23.7) 2,200.7 (75.5) 15.7 2,117.8 176.7 2,294.5
Net profit - - 1,093.7 - - 1,093.7 54.0 1,147.7
Other comprehensive income - - 20.9 (109.5) 5.2 (83.4) 2.1 (81.3)
Total comprehensive income - - 1,114.6 (109.5) 5.2 1,010.3 56.1 1,066.4
Dividends - - (129.8) - - (129.8) - (129.8)
Transactions on treasury shares - - (18.0) - - (18.0) - (18.0)
Share-based payments - - 6.5 - - 6.5 - 6.5
Changes in non-controlling
interests - - - - - - (4.6) (4.6)
30 June 2017 0.7 (23.7) 3,174.0 (185.0) 20.9 2,986.8 228.2 3,215.0
31 December 2017 0.7 (17.7) 3,225.6 (155.7) 20.2 3,073.1 259.4 3,332.5
Adoption of IFRS 9 1) - - 19.1 - (19.1) - - -
1 January 2018 0.7 (17.7) 3,244.7 (155.7) 1.1 3,073.1 259.4 3,332.5
Net profit - - 118.0 - - 118.0 40.0 158.0
Other comprehensive income - - 2.9 (10.9) (1.3) (9.3) 9.5 0.2
Total comprehensive income - - 120.9 (10.9) (1.3) 108.7 49.5 158.2
Dividends - - (129.6) - - (129.6) (45.0) (174.6)
Transactions on treasury shares - 0.7 (11.5) - - (10.8) - (10.8)
Share-based payments - - 7.5 - - 7.5 - 7.5
Changes in non-controlling
interests - - - - - - - -
30 June 2018 0.7 (17.0) 3,232.0 (166.6) (0.2) 3,048.9 264.0 3,312.9
1)
As a result of the IFRS 9 adoption, a reclassification was made of unrealised gains related to financial assets measured at fair
value through other comprehensive income, totalling CHF 19.1 million, from fair value reserves to retained earnings as of
1 January 2019. Refer to note 5.2 for further details.
On 15 May 2018, the Annual General Meeting approved a dividend payment of CHF 2.00 per share
(previous year: CHF 2.00 per share), which corresponds to a payment of CHF 129.6 million for the
financial year 2017. This was paid to the shareholders on 22 May 2018.
Vifor Pharma Ltd. Half-Year Report 2018 33 44CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF CASH FLOWS
2018 2017
in million CHF — unaudited figures 1.1.—30.6. 1.1.—30.6.
Net profit from continuing operations 158.0 44.4
Income tax (1.0) 12.5
Depreciation and amortisation 76.7 70.8
Increase in provisions and employee benefit assets and liabilities 6.1 3.2
Net financial result (41.8) 5.2
Other non-cash items 10.3 5.7
Change in trade and other receivables (103.7) (80.5)
Change in inventories (42.9) (17.6)
Change in trade and other payables (16.8) 2.7
Change in other net current assets 35.3 47.7
Interest received 1.3 0.4
Interest paid (5.5) (14.5)
Other financial payments 2.0 8.1
Income tax paid (39.7) (27.3)
Cash flow from discontinued operations - (32.0)
Cash flow from operating activities 38.4 28.8
Investments in property, plant and equipment (26.3) (11.8)
Investments in intangible assets (143.6) (37.7)
Investments in financial assets and securities (18.0) (48.2)
Proceeds from property, plant and equipment 0.6 0.3
Proceeds from financial assets and securities 1.5 -
Proceeds from assets held for sale - (0.7)
Net proceeds from disposal of Galenica Santé (discontinued operations) - 1,778.8
Cash flow from discontinued operations - 4.9
Cash flow from investing activities (185.8) 1,685.6
Dividends paid (174.6) (129.8)
Purchase of treasury shares (9.6) (0.8)
Sale of treasury shares - (3.9)
Proceeds from financial liabilities 134.9 355.4
Repayment of financial liabilities (114.3) (1,494.5)
Cash flow from discontinued operations - 34.1
Cash flow from financing activities (163.6) (1,239.5)
Effects of exchange rate changes 0.5 (0.9)
Increase/(decrease) in cash and cash equivalents (310.6) 474.0
Cash and cash equivalents as at 1 January 425.1 180.9
Cash and cash equivalents as at 30 June 114.5 654.9
34 44 Vifor Pharma Ltd. Half-Year Report 2018NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
These are the consolidated interim financial statements of Vifor Pharma Ltd. (“Vifor Pharma”)
and its subsidiaries (together referred to as “the Group”). A description of the nature of
the Group’s operations and its principal activities is included in the accompanying report.
KEY EVENTS AND TRANSACTIONS
The financial position and performance of the Group was particularly affected by the
following transactions during the reporting period:
(i) Investment in Cara Therapeutics and licence agreement
On 17 May 2018, Vifor Pharma made a USD 14.6 million equity investment in Cara Therapeutics
(“Cara”), representing an ownership interest of 3.6%. Simultaneously Vifor Pharma and
Cara entered into an exclusive licence agreement for a consideration of USD 55.4 million to
sell and commercialise CR845 (Difelikefalin) injection for the treatment of chronic kidney
disease associated pruritus (CKD-AP) in haemodialysis patients worldwide, excluding the
US, Japan and South Korea.
The Cara shares are recognised as financial assets and measured at fair value through other
comprehensive income.
(ii) Mircera® and Retacrit™
On 29 March 2018, the Group made a USD 10 million payment related to an existing
agreement with Fresenius Medical Care for Mircera® commercialisation rights.
On 30 June 2018, the Group signed an agreement with Fresenius Medical Care for the
extension of the Mircera® and Retacrit™ commercialisation rights for the first three months
of 2019 for consideration of USD 17.5 million. The agreement includes an option to further
extend the rights until the end of 2019. The payments are amortised over the extended licence
period.
ABOUT THESE NOTES AND FINANCIAL STATEMENTS
The notes to these consolidated interim financial statements have been organised to help
users find and understand the most relevant information. More detailed information
(e.g. basis of preparation and scope of consolidation, amendments to IFRS, etc.) has been
placed at the end of the document and cross-referenced where necessary.
Vifor Pharma Ltd. Half-Year Report 2018 35 44NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1 OPERATING SEGMENT
Financial information is reported in a manner consistent with the internal reporting provided
to the Executive Committee (Chief Operating Decision Maker). The financial information
is presented to the Executive Committee on an aggregate basis for evaluating financial
performance and allocating resources. Vifor Pharma continues to report a single operating
segment.
2 REVENUE
The Group adopted IFRS 15 Revenue from Contracts with Customers for the first time
in 2018 which resulted in lower reported net sales in H1 2018 of CHF 27.8 million and
in H1 2017 of CHF 19.8 million with fully compensating effects in lower costs. The new
s tandard was adopted using the full retrospective method, as detailed in note 5.2
“Amendments to IFRS”. The table below shows the disaggregation of net sales by brand,
including the reclassifications made from gross to net presentation in the comparative
period.
2018 2017*
in million CHF 1.1.—30.6. 1.1.—30.6.
Ferinject® 229.0 177.1
Venofer® 59.6 53.4
Maltofer® 34.1 28.4
Mircera® 214.0 154.9
Velphoro® 35.8 39.3
Veltassa® 36.8 24.3
Other Rx brands 53.2 47.9
Broncho-Vaxom® 26.1 28.1
Uro-Vaxom® 7.7 6.6
Doxium® 10.9 9.7
Anti-infectives 12.4 13.1
Third-party production 27.8 23.1
Net sales 747.4 605.9
* Figures for 2017 are restated; refer to note 5.2 for further details.
36 44 Vifor Pharma Ltd. Half-Year Report 2018NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Geographic areas
Revenues are attributed to countries (or regions) based on the country where the sale
originates, as represented in the following table:
in million CHF
Europe
2018 (excluding
1.1.—30.6. Switzerland Switzerland) USA Rest of World Group
Net sales 75.7 216.4 359.9 95.4 747.4
Other income 18.4 0.8 0.4 21.3 41.0
Third-party revenue 94.1 217.2 360.3 116.8 788.4
2017
1.1.—30.6.
Net sales* 71.4 181.6 283.8 69.1 605.9
Other income 41.7 4.0 0.7 9.8 56.1
Third-party revenue 113.1 185.5 284.5 78.8 662.0
* Figures for 2017 are restated; refer to note 5.2 for further details.
3 EXPENSES BY NATURE AND RECONCILIATION TO EBITDA
Expenses are presented by function in the statement of income and are presented by nature
below.
2018 2017*
in million CHF 1.1.—30.6. 1.1.—30.6.
Cost of goods and materials 150.7 128.3
Personnel expenses 251.2 238.5
Other operating expenses 194.5 162.3
Depreciation and amortisation 76.7 70.8
Operating expenses 673.2 599.9
* Figures for 2017 are restated; refer to note 5.2 for further details.
Amortisation expense is included in cost of sales (CHF 59.1 million; 2017: CHF 52.6 million),
general and administration (CHF 1.8 million; 2017: CHF 1.9 million) and marketing and
distribution (CHF 0.2 million; 2017: CHF 0.5 million).
Depreciation expense is included in cost of sales (CHF 9.4 million; 2017: CHF 9.2 million),
general and administration (CHF 4.2 million; 2017: CHF 4.4 million), marketing and distribution
(CHF 0.9 million; 2017: CHF 0.9 million) and research and development (CHF 1.2 million;
2017: CHF 1.2 million).
Reconciliation from EBIT to EBITDA
2018 2017
in million CHF 1.1.—30.6. 1.1.—30.6.
Operating profit (EBIT) 115.2 62.1
Depreciation and amortisation 76.7 70.8
EBITDA 192.0 132.9
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