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Sanochemia Half-Year Report

·        Sales revenues increase by 7% in line with forecasts

·        EBIT remains positive

·        All segments profitable

·        R&D revenues following € 1 million upfront payment from Orion

 

Vienna, 31 May 2007   -   Sanochemia Pharmazeutika AG, Vienna, listed in the Prime Standard of the Frankfurt Stock Exchange (ISIN AT0000776307), today announced its results for the first half of its 2006/2007 financial year to 31 March.

 

Compared to the same period of the previous year (1 October – 31 March), sales revenues rose to € 17.5m despite higher milestone payment receipts in the prior year (PY: € 16.4m of which € 2.5m in licensing payments from Avigen). This 7% increase is mainly due to higher production revenues and a positive contribution to group results made by the Research and Development Division following the receipt of an initial milestone payment from Orion Corporation for exclusive marketing and distribution rights to Sanochemia’s tolperisone formulation.

 

The higher milestone payment received in the prior period had a major influence on the operating result (PY: € 1.7m). Despite an increase in expenses related mainly to R&D activities and personnel, it was nonetheless possible to report the forecast positive EBIT in the amount of € 1.2m for the period under review.

 

The financial result of € 0.8m (PY: € 0.9m) remained essentially unchanged and accounted for pre-tax profits of € 2.0m (PY: € 2.6m). The deduction of income taxes in the amount of € 0.3m (PY: € 0.6m) left net profits of € 1.7m (PY: € 2.0m), equivalent to earnings per share of € 0.17 (€ 0.20).

 

The operating cash flow improved markedly to € 6.2m (PY: € 5.0m), while the equity ratio on the balance sheet date of 31.3.2007 rose marginally from 62.8% to 63%. Cash on hand and on deposit grew to € 24.6m (PY: € 21.4m) as a result of the positive development of operations.

 

The progress made in advancing development projects was reflected in R&D spendings which rose from € 2.9m to € 3.1m. The positive EBIT and the attainment of important development milestones are key to successfully marketing the company’s innovative projects.

 

CURRENT HIGHLIGHTS

 

·        Tolperisone - Sanochemia’s most important in-house pharmaceutical development will be launched on the German market this year by Orion Pharma following the award of marketing authorisation in April. As the exclusive supplier of the product, Sanochemia expects to see significant revenue flows and regards tolperisone as a key growth driver in the coming years and a product that will play a central role in the company’s on-going profitability.

 

·        Scanlux – an in-house development in the imaging segment – has received regulatory approval in Italy. The current period also saw the submission for regulatory approval for this product in China. Furthermore, Neufeld has been approved as the production site for Scanlux in Europe, enabling this product to be sold in all MRP markets. This will not only yield major logistical advantages but also provide new opportunities and improved margins given that the value-added chain is largely covered by Sanochemia.

 

·        The extensive portfolio of analgesics owned by the subsidiary AlcaSynn Pharmaceuticals GmbH has attracted considerable interest at a number of international biotech fairs. These potent painkillers based on opiates were recently ascribed significant potential at a meeting of experts. Sanochemia is currently assessing options to rapidly develop these substances in a variety of indications. The company is focussing its efforts on pre-clinical trials with the aim being to start Phase I clinical studies on schedule in 2008/2009.

 

 

OUTLOOK 2006/2007

The first half of the current year has been successfully completed. The operational divisions, Human Pharmaceuticals, Production and R&D have all fulfilled their respective expectations. 

The results of the first half enable the company to reaffirm its guidance for the current financial year: sales revenue growth outstripping the global pharmaceutical market and further positive EBIT.

Conference call

 

Sanochemia will be holding a conference call for analysts and investors today at 10:30. The dial-in number is + 43 - (0)2 – 68220 56616 and the conference language will be German. The complete half-year report including segment reporting is available either on request from the company or can be downloaded from the website at: www.sanochemia.at.

 

 

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For further information please contact:

 

Margarita Hoch 

Investor Relations
Tel.: + 43 / 1 / 3191456 - 335
Mobile: + 43 (0) 664 / 21 38 152 
mailto: m.hoch(at)sanochemia.at