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Actelion published first half 2014 results above consensus even taken into account reversal of accruals for US rebate program (Tracleer) and lower tax rate due to recognition of loss carried forward in the US.
Category: biotech
Posted On: 7/22/2014

Sell-side analysts’ upgrades have been gradual and these results and the full data analysis of Selexipag increase the probability of further upgrades.
With lower incremental R&D, marketing expenses and better products margin due to lower royalties to be paid, the company bottom line is set to accelerate significantly more than the sales.
Product sales were up 12.3% and core earnings per share are up 38% vs H1 2013 both in Swiss francs. Ex-rebate reversals core earnings were up 21%.

Effective tax rate for 2014 should be at 11% (including a CHF 121 million tax benefit due to release of the US valuation allowance due to the Asahi litigation). Actelion’s management expects the tax rate 11% going forward to increase back towards the 14-15% range that the company used to have over the last few years.
Company is working on best in class regulatory filing for Selexipag analyzing “the gold mine of data”, coming out of the GRIPHON trial (long term study with enrolled patients over 1,000, showing a 39% decrease in risk of morbidity/mortality in patients many of them receiving already an endothelin receptor antagonist combined with a PDE-5 inhibitor.
Opsumit global launch is very successful so far, backed by strong support from the physician community.
Currently more than 3000 active patients are on Opsumit, globally.
New patients’ enrollment is still very solid, gaining market share in ERA market. Treatment switch correspond to 25% of weekly enrollment. At that rate 10% of the current patient’ base of Tracleer would be upgraded to Opsumit (safety and efficacy driven upgrade).
In the first half of 2014, Opsumit has been launched in 10 new markets outside the US. In Germany the largest market outside US, the launch trajectory is even stronger than in the US.
The gross margin of the company is now at 90%. The overall profitability increase is in part due to lower royalties on Opsumit compared to Tracleer.

The balance sheet shows a CHF 947 mio unrestricted cash position as of June 2014, up from CHF 878 mio at the beginning of the year. The change includes a CHF 458 mio payment to Asahi, a related release of cash restriction of CHF 609 mio, a CHF 133 mio dividend payment and CHF 392 mio of share repurchase. The operating cash flow for the first half came out at CHF 259 mio. The company should continue to generating a lot of cash, the margins on Opsumit is higher than on Tracleer and the research and development cost should trend down now that the large studies (Seraphin and Griphon) are over.
For Opsumit the key focus is not the total market share in total but the market share of the new patients (this target market share is 80%, but the company is not there yet).

The outlook for the second half of core earnings growth at mid-teen percentage includes some more generic pressure for Tracleer.

Roche announces phase II clinical results of crenezumab in Alzheimer’s disease – comment on phase III progression yet
Category: Pharmaceuticals
Posted On: 7/16/2014
-Proof of concept study in mild-to-moderate Alzheimer’s disease did not meet its co-primary

-Positive trend in cognition observed with greater effect in people with mild disease who
received a high dose of crenezumab intravenously

-Next steps to be determined following further analysis of data

-Roche is committed to investigating medicines for Alzheimer’s disease and has a broad research
program underway across multiple pathways and disease stages

“Data from these phase II studies provide valuable information about crenezumab’s potential clinical activity in people with Alzheimer’s disease, where there is a great need for treatment options,” said Richard Scheller, Ph.D., Executive Vice President and Head of Genentech Research and Early Development. “These findings support the importance of testing potential disease-modifying agents, such as beta amyloid antibodies, early in the course of the disease.”
There is clearly an efficacy signal in milder patients although the study was not powered to detect statistical significance; 2) Data supports effectiveness of anti-amyloid antibodies in milder patients as seen with Lilly's solanezumab; 3) The compound appeared well-tolerated and may be differentiated by facilitating higher dosing. Roche has not commented on potential crenezumab PIII progression yet.

Roche to present data of phase II trial in a-beta program this week in Alzheimer’s disease
Category: Pharmaceuticals
Posted On: 7/15/2014
This week at the Alzheimer’s Association International Conference (AAIC) in Copenhagen, Denmark, Roche/Genentech (exclusive license agreement with AC Immune) will present data on crenezumab, for the treatment of Alzheimer’s disease (AD). Crenezumab binds to the soluble form of a-beta as well as the deposited plaque.

At the time of the announcement of the licensing agreement with Genentech in 2006, AC Immune added that its “proprietary SupraAntigenTM Technology resulted in the development of an anti-beta-amyloid antibody program with a selected lead antibody, which has been shown to be highly active in animal disease models for Alzheimer’s disease. The lead antibody is conformation-specific and induced the proposed transition from an insoluble to the soluble form of the plaque forming beta-amyloid protein. This event directly correlated with memory improvement.”

Lindt published strong sales development for the first half of 2014 and announced its biggest acquisition to date
Category: Consumer discretionary
Posted On: 7/14/2014
Lindt & Sprüngli, the premium quality chocolate maker, as star performer on the Swiss market for years continues to find enough space to grow. Its sales increased at above the rate of its corresponding market in the first six months of 2014. Despite weak currencies against Swiss Franc and muted consumer spending in Europe, the company’ s high quality brand and innovation allowed it to gain market shares in all geographies according to management. Higher raw material necessitated price adjustments.
“In the first six months of 2014, Group organic growth in local currencies reached 9.2%. In Swiss franc terms, Group sales rose by 6% to CHF 1.20 billion. The negative currency influence therefore amounts to 3.2 percentage points and is explained primarily by the weakening of the dollar-based currencies against the Swiss franc compared to the previous year. The good sales trend is mainly attributable to higher volumes and has been enhanced by innovative new product launches, the seasonal business and a product mix which is constantly being optimized…
Lindt & Sprüngli group is maintaining its long-term strategic targets for the year as a whole and expects to report organic sales growth of 6-8% and an increase in its EBIT margin by 20-40 basis points.”
Source: company press release.
In addition Lindt announced today to have reached definitive agreement to conduct its biggest acquisition to date; Russell Stover Candies, Inc. USA, a company with USD 500 million in annual sales, which will boost Lindt presence in the United States, a market that grew double digit for Lindt in the first half of 2014. In 1998 the Swiss company acquired Ghirardelli based in San Francisco and has expanded the brand successfully.

Helvetia Insurance to conduct a public tender offer for Nationale Suisse at CHF 80 per share
Category: Insurance
Posted On: 7/7/2014
Takeover in the attractive cash generative Swiss non-life market: the price proposed by Helvetia is a 25% premium to closing price of last Friday, July 4th, evaluating the whole company at CHF 1.7 billion. This corresponds to 1.8 times price to book value. With this price, Helvetia hopes to convince the other major shareholders, Mobiliar and Baloise to participate.

Helvetia press release headline:
07.07.2014 - Helvetia and Nationale Suisse have agreed to come together to create a new Swiss insurance group. To this end, Helvetia is offering the shareholders of Nationale Suisse a public tender offer valued at CHF 80 per Nationale Suisse share. The Board of Directors of Nationale Suisse welcomes the Helvetia offer and recommends that the Nationale Suisse shareholders accept it. The combination of the two companies will mark the creation of a strong Swiss insurance group with outstanding prospects.

..The combination will reinforce Helvetia as Switzerland's top-3 insurer, allowing it to become one of the country's leading multi-line insurers. With a premium volume of over CHF 5 billion, the domestic market will remain the main pillar of the combined group…

… The transaction is planned to conclude in the second half of 2014, subject to the approval of the shareholders of Helvetia Holding AG, those of National-Versicherungs-Gesellschaft AG and the appropriate competition and regulatory authorities. Helvetia today published the pre-announcement of the public tender offer and intends to publish the offer prospectus around 8 August 2014….

Thanks to the higher premium volume, the combination of Helvetia and Nationale Suisse brings the possibility of considerable economies of scale and synergies. In the medium term, the combination is expected to generate additional growth opportunities, an improved risk profile and annual cost savings in the region of CHF 100 to 120 million.

Lafarge and Holcim announced list of asset disposals on the back of their planned merger agreement
Category: Industrials
Posted On: 7/7/2014
The disposals are conditional on the merger getting authorization from the relevant authorities. The companies expect their merger to complete in the first half of 2015.
The total planned sales amounts to about 25 mt of cement (6% of the combined total capacity) and is taking place mostly in Europe. Outside Europe, Canada, Philippines and Brazil are concerned. Upon completion of the disposals the combined entity will still derived 20% of its total revenues from its European operations.

Actelion : Bank of America increase EPS on Selexipag news, game changer in PAH according to physicians’ feedback
Category: Biotech
Posted On: 6/30/2014
Consensus estimates are going up to CHF 2.2 bio peak sales for Selexipag.

Sika continued step-up in EM, India plant opening
Category: Industrials
Posted On: 6/16/2014

Company press release : “…With today’s opening of the Jhagadia plant, Sika has reached another milestone in the expansion of its supply chain in major growth markets. With 11 branch offices and now six production sites, the company is well represented in the emerging market of India….”

Leonteq : More growth initiative announced
Category: Financial Service
Posted On: 6/13/2014
After 300 million CHF cumulative spent to build the investment platform, the company, an engineering and infrastructure partner for investment solution announced recently a “smart data initiative” to increase end-user analytics to enhance productivity and investment decision process.

On June 2nd 2014, the company announced to it has received a capital market license in Singapore.

Burckhardt Compression FY 2013 : strong order intake and sales +20%, GM lower due to product mix and less service biz, EBIT and net income lower, but transition to faster long term growth
Category: Industrials
Posted On: 6/10/2014
Expansion of market presence
Burckhardt Compression’s global footprint was further expanded in fiscal year 2013 with the aim of enhancing local business relations and providing customers with first-class service capabilities.
The new subsidiaries with Service Centers in Singapore and South Africa and soon in Saudi Arabia plus the new Service Center in Calcutta, India, bring the company even closer to where its customers are and will allow it to provide more efficient compressor operation and maintenance
services for its own products as well as for those made by other manufacturers.

Further success in new application areas
In the year under review Burckhardt Compression sold a large number of Laby®-GI boil-off gas compressor systems for use on LNG carriers. Orders were also received for a smaller version of Laby®-GI for use on smaller-sized LNG tankers. With this new product the company now offers
compressor solutions for all sizes of LNG carriers. Its subsidiary in Korea is being expanded to enhance the technical expertise offered to Korean shipbuilders. Further growth was achieved in the oil and gas production industry with orders for sour gas compressors that are used to improve
oil recovery

Roche did not purchase Illumina (Nasdaq : ILMN) in 2012 but is making deals to be present in the different technologies that could play a big role in next generation DNA sequencing
Category: Pharmaceuticals
Posted On: 6/2/2014
Roche press release (June 2nd, 2014):
Roche (SIX: RO, ROG; OTCQX: RHHBY) announced today the acquisition of Genia Technologies, Inc. (Genia), a privately held company, based in Mountain View, California, USA. Genia is developing a single-molecule, semiconductor based, DNA sequencing platform using nanopore technology. Under the terms of the agreement, Roche will pay Genia’s shareholders USD 125 million in cash. In addition to this payment from Roche, Genia’s shareholders may receive up to USD 225 million in contingent payments depending on the achievement of certain milestones. …
“The acquisition of Genia is a further step for Roche to introduce a potentially disruptive technology to the market,” said Roland Diggelmann, COO of Roche Diagnostics. “The addition of Genia’s single molecule semiconductor DNA sequencing platform using nanopore technology strengthens our next generation sequencing pipeline.”'

Eight months earlier, Roche reached an agreement with Pacific Bioscience (Nasdaq: PACB) to develop diagnostic products, including sequencing systems and consumables, based on Pacific Biosciences' Single Molecule, Real-Time (SMRT®) technology.
Pacific Bioscience press release (September 25th, 2013):
… commenting on the agreement, Dan Zabrowski, Head of the Sequencing Unit at Roche said, "We see great potential in Pacific Biosciences' sequencing technology for the development of future clinical sequencing applications. Sequencing will be a key technology in addressing the strong and growing demand for genetic and genomic solutions in the clinic. We are looking forward to this partnership to accelerate and support the transition of DNA sequencing into routine diagnostics through our joint development efforts."

Sonova management meeting
Category: Med Tech
Posted On: 5/29/2014
Synergies from recent acquisitions playing out. The company appears to be transforming its market and hearing aids driving penetration higher. Additional scientific data are showing the negative impact of that hearing loss has on brain activity and the increase risk of dementia. Sonova continues to shape the distribution in the industry and it is growing above the market. Cash on the balance sheet is accumulating and CEO is willing to increase pay-out and share buy-backs.

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