Medivir reports net sales of SEK 444.6 m for 1 January - 30 June 2011

Aug 31 2011

Medivir (STO:MVIRB)

Interim period (January 2011 - June 2011)

-- Net sales were SEK 444.6 (35.7) m

-- Profit/loss after tax amounted to SEK 220.3 (-50.3) m

-- Basic and diluted earnings per share were SEK 7.37 (-2.14)

-- Cash flow from operating activities amounted to SEK 230.9 (4.6) m; cash and cash equivalents and investments in securities etc. amounted to SEK 716.4 (462.7) m at the end of the period

Second quarter (April 2011 - June 2011)

-- Net sales were SEK 322.9 (14.1) of which BioPhausia, which was consolidated from 1 June, contributed SEK 42.4 m

-- Profit/loss after tax amounted to SEK 167.4 (-24.1) m

-- Basic earnings per share were SEK 5.52 (-1.01)

Business highlights in the second quarter

-- Medivir's commercial presence in the Nordics enhanced through the acquisition of BioPhausia

-- Positive interim results after 48 weeks' treatment presented from phase 2b ASPIRE study on TMC435 in treatment-experienced hepatitis C genotype 1 patients

-- Clinical phase 1b trial commenced on polymerase inhibitor TMC649128 in patients with chronic hepatitis C virus genotype 1 infection

-- Medivir receives USD 45 m (SEK 279 m) from Meda, which acquired the American rights to Xerese®

Post-period end highlights

-- Tibotec decides to conduct a combination study on TMC435 with Pharmasset's PSI-7977 for hepatitis C

-- TMC435 receives Fast Track designation by the FDA in the US

-- BioPhausia CEO Maris Hartmanis appointed Deputy CEO and Chief Operating Officer

-- BioPhausia's generics business, BMM Pharma AB, has been divested

"Medivir's commercial presence strengthened in the Nordics"

CEO's comment

A trading company at the leading edge

We continued to make major advances in all segments in the second quarter. We took a momentous step forward to consolidate our commercial operation through our acquisition of Swedish specialty pharmaceutical company BioPhausia.

The acquisition of BioPhausia brings Medivir a profitable product portfolio with a number of well-known brands such as Mollipect (cough medicine), Citodon (analgesic), Laxabon (laxative) and Egazil (irritable bowel). The cash flow from this portfolio and enhancement of our commercial platform via BioPhausia's network significantly improves our prospects of acquiring more products for sale in the Nordics, which complements the future flow of Medivir's proprietary products.

BioPhausia also brings an infrastructure and platform that will facilitate the expected launch of TMC435 for HCV patients in the Nordics, where we've retained the commercial rights to the product. The Nordic market for hepatitis C consists of some 115,000 chronically infected patients. Of this total, some 3,000 per year are currently treated with current SoC (standard of care). In the best case, existing therapies cure only about 50% of the patients treated for this life-threatening disease. In addition, current therapy has problems with both safety and tolerability. Overall, this indicates that the Nordic region is a valuable future market for TMC435.

Late in the period, we consolidated our financial position further by renegotiating the terms with our commercial partner Meda on Xerese®, and our unique cold sore (labial herpes) product. Through a sale of the rights to Xerese® in the US, Canada and Mexico to Meda, we raised USD 45 m (SEK 279 m). This agreement will trigger a payment to AstraZeneca, the original patentee, according to previously agreed terms. Medivir has retained the existing global rights to Xerclear® outside the US, Canada and Mexico. We will continue to exploit these market opportunities via various partners.

Our hepatitis C projects

Medivir is continuing to make major advances in its hepatitis C portfolio. Our leading CD (candidate drug), the next-generation protease inhibitor TMC435, which is under development in partnership with Johnson & Johnson subsidiary Tibotec Pharmaceuticals, has continued to achieve very positive results. Interim data after 48 weeks' treatment from the phase 2b ASPIRE study on previous null responders with chronic hepatitis C genotype 1, demonstrated significantly higher efficacy data for TMC435 than current standard of care (SoC). Additionally, TMC435 again demonstrated an excellent safety and tolerability profile. This is important because treatment-related adverse events are the main reason for the poor patient compliance with current SOC.

Medivir and Tibotec also have a sharp development focus on new combination therapies for treating hepatitis C. Our polymerase inhibitor TMC649128 has the potential to become a key component in forthcoming HCV combination therapies. This is due to the compound's high genetic resistance barrier and anti-viral activity against several HCV genotypes. In June, phase 1b clinical studies on TMC649128 commenced on HCV patients. A combination study on TMC435 and TMC647055, a non-nucleoside NS5B polymerase inhibitor developed by Tibotec Pharmaceuticals also commenced in June.

After the end of the period, Medivir presented reports regarding the progress of the company's hepatitis C projects. TMC435 was granted Fast Track designation by US regulatory authority the FDA. This is a further validation of the strong and clear profile TMC435 demonstrated in major phase 2 studies and in comparison with the recently approved competing antivirals, Incivek™ and Victrelis™.

TMC435 has potential to be a cornerstone of forthcoming combination therapies. Medivir has given its support to partner Tibotec Pharmaceuticals' decision to commence combination studies on TMC435 with Pharmasset's polymerase inhibitor PSI-7977. These phase 2b combination studies are scheduled to commence in the year. This is corroboration of the efforts that are made to develop new treatment methods with the aim of improving current SoC for this serious disease.

We're looking forward to the second half of 2011. We expect to be able to report further results from several clinical studies that may continue to confirm the potential of TMC435 and indicate further advances towards our goal of becoming an integrated and profitable specialty pharmaceutical company focusing on infectious diseases.

Ron Long,
Chief Executive Officer