Crucell Reports Fourth Quarter and Full Year 2010 Results
PRESS RELEASE
Crucell Reports Fourth Quarter and Full Year 2010 Results
Total revenues and other operating income of €365.4 million for the
full year 2010 compared to €358.0 million in 2009.
Due to write-downs of Quinvaxem® inventory and higher operating expenses, operating loss for the year was €34.3 million compared to €39.0 million operating profit in 2009. The year ended with a net loss of €27.6 million compared to €23.9 million net profit in the previous year and
undiluted EPS of minus €0.34 compared to €0.34 in 2009.
Leiden, the Netherlands (February 7, 2011) - Dutch biopharmaceutical company Crucell N.V. (NYSE Euronext, NASDAQ: CRXL; Swiss Exchange: CRX) today announced its financial results for the fourth quarter and the full year of 2010, based on International Financial Reporting Standards (IFRS). These financial results are unaudited.
Business Highlights:
On October 28, 2010 and November 9, 2010 Crucell announced that it put a temporary hold on all shipments of Quinvaxem® and Hepavax-Gene® and suspended production at its Shingal facility in Korea as the facility's sterile operation had been compromised due to a microbiological contamination. In December 2010, Crucell resumed shipments of the non-contaminated stock of Quinvaxem®.
In December 2010, the Korea Food & Drug Administration (KFDA) audited the Shingal facility and informed Crucell in January 2011 that it supported the restart of manufacturing. Crucell has started commercial manufacturing of Quinvaxem® at full capacity and will release Quinvaxem® to the market through the normal release procedures. In the third quarter financial results, Crucell took a €22.8 million inventory provision on Quinvaxem® stock related to the Korea manufacturing issues.
In December 2010, Crucell was able to release a batch of Quinvaxem® that had previously been provisioned, resulting in a decrease in operating loss of €1.9 million in the fourth quarter. The release of two further Quinvaxem® batches currently also fully provisioned for, is dependent on the results of further assessments by the company and consultation with regulatory authorities. Release of these two batches would decrease the operating loss for the year 2010 by another €4.2 million.
On December 8, 2010 Johnson & Johnson and Crucell announced that Johnson & Johnson is making a recommended cash offer for all of the issued and outstanding ordinary shares in the capital of Crucell N.V. at an offer price of €24.75 per share. The Offer represents a premium of 58% over the €15.70 closing price of the Ordinary Shares as of 16 September 2010, the day before Johnson & Johnson and Crucell announced they were in negotiations for the Offer, and a premium of 63% over the 30-day trading average of the Ordinary Shares of €15.20 as of 16 September 2010.
On December 10, 2010 Crucell held an informational Extraordinary General Meeting of Shareholders to discuss Johnson & Johnson's offer.
In November 2010 Crucell announced the start of a discovery program leading to the development and commercialization of a Human Papilloma Virus (HPV) vaccine. This discovery program is part of the existing strategic collaboration with Johnson & Johnson, through its subsidiary Ortho-McNeil-Janssen Pharmaceuticals, Inc., signed in September 2009, to develop innovative products, including antibodies for influenza prevention and treatment.
Financial Highlights 2010:
The Company announced combined total revenues and other operating income of €365.4 million, compared to €358.0 million in 2009, in-line with prior guidance given to the market.
Product sales were €290.6 million, representing sales of paediatric vaccines (61%), travel and endemic vaccines (25%), respiratory vaccines (7%), and other products (7%). Higher sales of travel and endemic vaccines were more than off-set by lower sales of respiratory vaccines due to the limited availability of flu antigen, weaker overall demand and the temporary suspension of Quinvaxem® shipments.
Gross margins were 30%, compared to 42% in 2009. Gross margins were significantly impacted by the provision for Quinvaxem® inventory, pricing of Quinvaxem® sales, variation in product mix and negative operating variances.
Research and development (R&D) expenses increased to €100.0 million, compared to €70.2 million in 2009. R&D spending accelerated significantly in line with guidance, mainly as a result of an increase in clinical development expenses.
Operating loss was €34.3 million for 2010, compared to €39.0 million operating profit in 2009, due to write-downs of Quinvaxem® inventory and higher operating expenses.
Net loss was €27.6 million for 2010, compared to a net profit of €23.9 million in 2009. This translates to a net loss per share of €0.34, compared to a net profit per share of €0.34 in 2009.
Cash used in operating activities was €36.4 million compared to cash from operating activities of €76.9 million in 2009. This is due to lower net results, movements in working capital and receipt of significant upfront payments in 2009 related to the collaboration agreement with Johnson & Johnson.
Cash used in investing activities was €15.7 million in 2010, which is mainly due to the purchase of property, plant & equipment and investments in intangible assets, partially offset by proceeds from financial assets. The latter are cash proceeds from deposits with maturities over 3 months at the beginning of the period.
Net cash used in financing activities in 2010 amounted to €50.7 million due to the repayment of financial liabilities to reduce interest expenses
Cash and cash equivalents decreased by €95.8 million in 2010 to €232.0 million.
Key Figures: (€ million, except net result per share)
Fourth Quarter
Full Year
2010
unaudited
2009
unaudited
Change
2010
unaudited
2009
unaudited
Change
81.6
111.3
(27)%
Total revenues and other operating income
365.4
358.0
2%
(12.0)
18.0
Operating profit/(loss)
(34.3)
39.0
(7.5)
15.6
Net profit/(loss)
(27.6)
23.9
(0.09)
0.19
Net result per share
(basic)
(0.34)
0.34
Crucell's Chief Executive Officer Ronald Brus said:
"The key event of the year was the agreement we reached with Johnson & Johnson for a recommended cash offer of €24.75 per share to acquire Crucell. We strongly believe that this agreement is in the best interest of Crucell and all our stakeholders, including our shareholders, partners, employees, patients and customers. I am looking forward to Crucell becoming a Johnson & Johnson company as the combination of these two companies will enable us to further accelerate growth. The shared expertise and talent will help to make a difference in the lives of people worldwide.