STALLERGENES GREER ANNOUNCES 2016 HALF-YEAR RESULTS

August 25, 2016

STALLERGENES GREER ANNOUNCES 2016 HALF-YEAR RESULTS

  • H1 2016 unaudited Group net sales of €78.0m
  • Commercial recovery underway in Europe and International markets with the help of RESTART plan
  • Strong US performance confirmed with unaudited pro forma H1 2016 sales up +9.8%
  • Financial objectives:
    • FY 2016 net sales of c. €180-200m
    • FY 2016 Group EBIT to be significantly negative 
    • FY 2017 sales growth acceleration to continue

DATE: August 25, 2016

London (United Kingdom) – Stallergenes Greer plc (the “Company”) (Euronext Paris: STAGR), a biopharmaceutical company specializing in treatments for respiratory allergies, today announced its 2016 first half results. The results were reviewed and agreed by the Company’s Board of Directors on 24 August 2016.

H1 2016 Financial Highlights

€m, except margin in %

H1 2016

H1 2015

H1 2015

Unaudited

Pro forma (unaudited)

Reported accounts

Sales

78.0

183.7

12.7

EBIT

(58.5)

43.0

(8.1)

Operating margin

23.4%

Net profit/(loss)

(39.0)

28.6

(7.7)

Fereydoun Firouz, Chairman and Chief Executive Officer of Stallergenes Greer, commented:

The first half of 2016 marked a turning point for Stallergenes Greer as we began to recover from the temporary suspension of production and distribution of our manufacturing plant in Antony, France. As anticipated, we are now able to better assess the financial impact this event had on our H1 2016 results and also issue guidance for FY 2016.

Without a doubt, the progress we’ve made this year is a direct result of the commitment of all our employees and the strength of our new global leadership team. Together, we have worked diligently to restore supply to the physicians and patients who rely on the high quality of our therapies in the European and International markets, whilst also growing both new and existing business in the United States. We have streamlined our portfolio offerings, managed costs and tightly controlled our operating expenses – all of which will enable us to continue sales growth acceleration in 2017 and beyond.

In our European and International markets, we are supplying 70% of the Company’s 2014 sales references and distributing our sublingual products to 40 countries. We expect our production process flow to be fully streamlined by year end and we will continue to work hard to rebuild trust with key stakeholders in this region.

In the US, our business is performing well and subcutaneous immunotherapy sales continue to drive growth. We will move forward as planned, executing against our investment strategy in this region with discipline – particularly given ORALAIR® share gains and the sublingual tablet market dynamic we are now operating within.

I am proud of the progress we have made so far this year, focusing on patient’s needs as well as the fundamentals of our business and executing against our strategy. Our journey to fully regain our global leadership position in allergy immunotherapy will continue, as will our commitment to deliver long-term value for all our shareholders.

Stallergenes Greer’s H1 2016 Financial Summary

Total revenues for the first half of 2016 were €78.0 million, a pro forma decrease of 58% compared with the same period of the previous year due in large part to the temporary suspension of production and distribution of our plant in Antony, France and the related recall of products originating from that facility.

H1 2016 Geographical Turnover

€m

H1 2016

H1 2015

H1 2015

Unaudited

Pro forma (unaudited)

Reported accounts

Southern Europe

17.8

99.2

0.6

North & Central Europe

10.7

32.4

0.2

International markets

4.7

11.3

0.3

US

44.8

40.8

11.6

Total

78.0

183.7

12.7

European Business

The impact of the events in Antony is particularly strong in this region. Southern Europe H1 2016 sales reached €17.8m compared to unaudited pro forma net sales of €99.2m in H1 2015. North and Central Europe H1 2016 reported sales reached €10.7m vs. unaudited pro forma net sales of €32.4m in the same period of 2015. Missing of the start of the prescribing season (in certain countries) as well as the time needed to restore our patient base also impacted performance in this region during the reported period.

International Business

Internationally, H1 2016 reported sales reached €4.7m due to the temporary suspension of production and distribution in Antony. Stallergenes Greer remains fully committed to serving all countries in this region.

US Business

In the US, H1 2016 performance was strong with total reported sales of €44.8m, an increase of 9.8% from last year with unaudited pro forma sales of €40.8m in H1 2015. Subcutaneous immunotherapy sales continue to be robust and, while the grass tablet market in the US is growing slower than expected, ORALAIR®’s market share increased due to strategic investments made to strengthen the Group’s commercial operations capabilities.

H1 2016 Turnover per Product Type

€m

H1 2016

H1 2015

H1 2015

Unaudited

Pro forma (unaudited)

Reported accounts

Sublingual

27.3

121.9

0.1

Subcutaneous

34.2

43.3

9.3

Other

11.1

13.4

1.7

Veterinary

5.4

5.1

1.6

Total

78.0

183.7

12.7

Sublingual Products

Stallergenes Greer’s sublingual products, including ORALAIR and ACTAIR® tablets as well as the liquid solution STALORAL®, totalled €27.3m of revenues in H1 2016, a decrease of 77.6% globally compared to the H1 2015 unaudited pro forma results. In the US, where significant investments were made in the Group’s commercial footprint, ORALAIR market share increased. In Europe and International markets, the sublingual product category was the most impacted by the events in Antony. ORALAIR once again became available to prescribers and patients in February 2016; STALORAL became available in late March in France and late April in other countries, while the large majority of treatment initiations are in Q1 or Q4.

Subcutaneous Products

Subcutaneous product sales, which include ALUSTAL®, PHOSTAL® and Greer Extracts® are reported at €34.2m in H1 2016 while unaudited pro forma net sales totalled €43.3m in H1 2015, a decrease of 21.0% globally. In the US, subcutaneous sales were strong and were not impacted by the suspension of production and distribution at our Antony plant due to the Group’s manufacturing capabilities in this region. In Europe and International markets, production and distribution of the majority of subcutaneous products will resume in Q3 2016.

Veterinary Products

Veterinary product sales reached €5.4m in H1 2016, an increase of 5.9% compared to the €5.1m in H1 2015 on an unaudited pro forma basis. This category is a growth area for the Group.

Other Products

Other products including diagnostics and ancillary products totalled sales of €11.1m in H1 2016, compared to €13.4m in H1 2015 on an unaudited pro forma basis, a decrease of 17.2%.

Financial Review

The current operating loss for the first half of the year 2016 totalled €58.5m, compared to a current operating result of €43.0m on an unaudited pro forma basis, for the same period last year. This reflects the significant reduction in net sales. In addition, as manufacturing costs are to a large extent fixed, certain operating costs continued to be incurred during the period. There were also additional costs related to the set-up of the new global organisational structure.

On 30 June 2016, Group net assets were €493.7m (31 December 2015: €540.0 million). This highlights that the Group remains in a strong position financially despite the challenges it has faced.

As of 30 June 2016, the Group had “cash and cash equivalents” of €84.9 million. In addition, the Group has limited external debt with an outstanding debt balance of €15.6 million.

“RESTART” programme

Following the temporary suspension of production and distribution at the Antony plant – as well as the voluntary product recall, Stallergenes Greer implemented the “RESTART” programme. Designed to regain the Group’s global leadership by focusing on production, logistics and commercial capabilities in European and International regions, H1 2016 achievements include:

  • Commercial: Stallergenes Greer is now enrolling over 70% of its 2014 new patient levels, 70% of its prescribers have restarted their prescriptions and the Group has enough references released to support around 70% of 2014 sales. In addition, an image survey from end of July show significant improvements in terms of confidence and trust score compared Stallergenes Greer’s main competitors.
  • Medical: Stallergenes Greer has expanded medical education to allergy specialist physicians through international conferences and national meetings in 17 countries involving over 220 physicians.
  • Technical Operations: Stallergenes Greer’s sales made now in 40 countries (vs. 61 in 2015) with enough references released to make 70% of 2014 sales. STALORAL top 14 references are available in 21 countries (vs. 57 in 2015), ORALAIR is available in 23 countries (vs. 25 in 2015) and Venoms are available in 8 countries (vs. 17 in 2015). The delivery times are now consistently below two weeks.

2016 Business Outlook and Guidance
Considering the gradual positive impact of RESTART and ongoing successes in the US, the Group is anticipating that sales in Europe and International markets will improve during H2 2016 and that sales in the US will maintain the current performance throughout the year.

Stallergenes Greer’s financial objectives for 2016 are as follows:

  • Full Year 2016 Group revenue objective of about €180-200 million
  • Full Year 2016 Group EBIT to be significantly negative

Stallergenes Greer is confident sales growth acceleration will continue in 2017 and beyond.

Webcast and Conference Call Information
The company will host an investor and analyst call on 25 August 2016. The event will also be available via live webcast at 6.00 pm CET / 5.00 pm BST / 12.00 pm EDT.  The webcast will be available via the link below:

http://edge.media-server.com/m/p/832htu5x

Please connect at least 15 minutes prior to the conference to register, download and install any necessary audio software.

Financial Calendar

  • 16 November 2016 – Meet the managers event
  • 29 March 2017 – FY 2016 Results
  • 30 August 2017 – H1 2017 Results