Actelion's CEO Discusses Q1 2013 Results - Earnings Call Transcript

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 |  About: Actelion Ltd. (ALIOF)
by: SA Transcripts

Actelion Ltd. (OTCPK:ALIOF) Q1 2013 Earnings Call April 16, 2013 8:00 AM ET

Executives

Roland Haefeli - SVP, Head, Investor Relations & Public Affairs

Jean-Paul Clozel - CEO

Andrew Oakley - EVP & CFO

Otto Schwarz - EVP & COO

Analysts

Ravi Mehrotra - Credit Suisse

James Gordon - JPMorgan

Guillaume Van Renterghem - UBS

Richard Parkes - Deutsche Bank

Andrew Weiss - Bank Vontobel

Olivia Capra - Barclays Capital

Peter Welford - Jefferies

Operator

[Abrupt Start]

.…..Financial Results Conference Call. As a reminder all participant are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.

At this time, I would like to turn the conference over to Roland Haefeli Head of Investor Relations and Public Affairs. Please go ahead.

Roland Haefeli

Good afternoon. Good morning to those of you in the United States. Welcome to Actelion first quarter 2013 financial results conference call, where in the first quarter, we did deliver a strong set of results.

On the call today, we have Jean-Paul Clozel, the Chief Executive Officer; Andrew Oakley, the Chief Financial Officer. The two of them are here to provide you with more details on our performance in the first quarter in their specific presentation. They will be joined for the Q&A session by Otto Schwarz, our Chief Operating Officer.

Before we start, on behalf of all of us here at Actelion we hope that neither of you or of your family have been affected by the tragedy unfolding in Boston.

Before I hand over to Jean-Paul, I would like to remind everyone that we will be making forward-looking statements and you are hereby appropriately warned about the benefits or dangers to be invested in Actelion’s stock.

With that I hand over to Jean-Paul for his introductory remarks. Jean-Paul, your floor, please.

Jean-Paul Clozel

Thank you, Roland. Good afternoon or good morning to you and thank you for joining us today. This morning we reported a very strong start into 2013 and I am happy to take the opportunity to provide a little more color on the operational progress we have made in this first quarter of the year.

Continuing with the momentum which we built last year at the start of 2013 has been marked by further progress with delivering on all three elements of our strategy. Our pulmonary hypertension portfolio of products most on the market and in development continue to make progress. The regulatory procedures for Opsumit are on-track for first approval and market launch before year-end. Until then we continue to support our PAH product already on the market.

Tracleer had an excellent first quarter posting sales growth despite both competitive and pricing pressure and helped by some order phasing. Veletri received approval in Japan, one of the world’s largest markets for intravenous epoprostenol. In Europe, Veletri has reached a successful conclusion to the decentralized procedure as a result we expect the first EU approval in the coming weeks. The new markets will offer further opportunity for Veletri sales growth.

And of course with Selexipag our overall IP receptor agonist; the Phase III GRIPHON study is almost fully enrolled with 1,150 patients and we are just weeks away from the interim analysis, a two-third of the number of required events. So again we see progress with our first key of our strategy strengthening of PAH functionality.

The work on our late stage assets in additional therapeutic areas is also making headway. Preparation for the Phase III study with Ponesimod in psoriasis and Cadazolid in Clostridium Difficile Associated Diarrhea or CDAD is ongoing. Actually, we have recently received confirmation that the post-presentation of the Phase II Cadazolid results has been accepted for late breaking presentation at the 23rd European Congress of Clinical Microbiology and Infectious Diseases at the end of April. If you remember the topline result of this compound become available at the end of last year. The extract will be published by the Congress in coming days and the poster will be presented at the late breaking news during the session on Sunday, April 20th.

This illustrates the progress with certain key element of our strategy bidding of single product franchise. It’s important to note that the progress in this key element has not been at the expense of profitability. You will hear more from Andrew about the strong commercial deferments of our product in the market but also about the tight cost control we have continued to exercise.

I would like to present some of the key performance indicators we have defined to measure our success moving forward. Product sales are up 5% in local currencies compared to the same period last year; core operating expenses are down 11% in local currencies again compared to Q1 2012 and our core earnings are up 44% compared to Q1 2012. An excellent set of number for the beginning of 2013 but I would urge you to exercise some question as topline dynamics will not be maintained throughout the year.

In addition, over next three quarters with a launch of Opsumit and starting new Phase III study, we have exciting opportunities for investment. Nevertheless, the progress in tougher months has resulted in these numbers clearly demonstrates that we are delivering on all three elements of our strategy. We are strengthening of PAH franchise; we move forward with opportunities in potential new markets and we do so while optimizing profitability.

Thank you for your attention. I will be happy to answer your question at the end of the presentation. Now Andrew will give you a detailed overview of the financial results. Andrew please?

Andrew Oakley

Thank you, Jean-Paul and good afternoon and/or good morning. As Jean-Paul mentioned, 2013 is off to a good start with product sales increasing by 5% in local currencies to CHF 432.8 million. Operating income amounted to CHF 124 million, a strong result albeit due to a certain degree the phasing of both sales and OpEx.

Core earnings for the first quarter of the year amounted to CHF 168.5 million, a 44% increase on a local currency basis. Fully diluted earnings per share for the first quarter of 2013 amounted to CHF 0.85 [Rappen] compared to CHF 0.38 Rappen for the same period of last year. Not shown here, but core EPS increased by 57% to CHF 1.26 Rappen. A full reconciliation of US GAAP (inaudible) core earnings and core EPS can be found in both the press release of this morning as well as on our website.

Amidst a continuing challenging environment, product sales reached CHF 432.8 million, an increase of 5% in local currency. This very good performance was driven by a number of factors and I will go into more detail for each product.

Our Japanese collogues continue to deliver extremely impressive results and Japan account continues to account for 10% of total product sales. However, if we use the same currency basis for 2012, this would have been 12%. US sales accounted for 41%; 38% of sales were from Europe and 11% from the other markets of the globe.

Now let me provide some more detail on the performance of each of our product. Tracleer sales showed strong performance for a 4% local currency increase and a 7% increase in units shipped. In the United States we observed some specialty pharmacies restocking low inventory levels and have also been from the price increased.

In Europe, pricing pressure continued with average pricing levels decreasing by around 8%, unit growth however continued with shipments to patients increasing about 2%.

VENTAVIS sales continue to be affected by competitive pressure sales for the quarter and were down 1% on a local currency basis. However, unit shipped are down 9% and similar to Tracleer we did see some order phasing which positively assisted sales in the quarter as well as a positive [crossing] effect.

Our third PAH product Veletri, sales for the quarter amounted to CHF 6.7 million, as we reached a 50% share level of PAH patients on IV epoprostenol in the US. We announced in February that Veletri was approved in Japan as well as Canada and Switzerland. Additionally, we have reached the end of procedures in Europe and we are expecting approval in the first EU markets within the next few weeks.

As for the Zavesca, sales increased to CHF 22.9 million, an increase of 23% in local currencies, driven by both unit growth and an increase in cost in the US. The Niemann-Pick C indication predominantly in ex-US markets is a major driver of this performance.

And now on to the depth side of the P&L, core R&D spend was down 24% in local currencies compared to the prior year. Main drivers of this decrease were several studies that in 2012 were stopped as part of the refocusing of our R&D strategy; all had come to a conclusion such as the SERAPHIN study. Additionally, we saw the impact of the cost savings initiative on a fixed cost base with headcount and R&D functions down by 11%. However, we do expect R&D costs to increase later in the year as we commenced the Phase III programs for ponesimod and cadazolid.

Core SG&A expenses, which decreased by 4% in local currencies, as in R&D SG&A and the headquarter functions has a lower fixed cost base in the prior year and we benefit additionally from lower legal costs. As we approach the launch of Opsumit we have started to wind down some market and again medical marketing programs for Tracleer which has contributed to the improved operating margins seen in Q1. However as we move closer to the launch of Opsumit, we do expect the promotional spend will increase some of this improved operating margin.

Core earnings for the quarter amounted to CHF 168.5 million, a 44% in local currency increase. As described before, this is the result of some wholesaler inventory restocking as well as phasing of operating expenses as we look forward to the commencement of Phase III studies ponesimod and cadazolid as well as the launch of Opsumit. We have delivered a strong start in 2013 and we will carefully look at guidance for the full year. We have a number of complex moving parts which could affect earnings in both 2013 and 2014, and it is possible that some of the profit growth we forecast for the 2014 could be brought forward into this year.

The GAAP OpEx includes stock compensation of CHF 13.6 million, depreciation and amortization was amounted to CHF 2.9 million and CHF 9.4 million respectively. Excluded from core earnings is CHF 12.9 million out-of-patient settlement that resulted from a now concluded commercial litigation proceeding.

The major variance is the difference in doubtful debt provisions with 2012 showing a charge of CHF 10 million compared to a benefit in 2013 of around CHF 100,000, as we continue to see an improvement in Southern Europe – Southern European receivables. The major drivers impacting financial results for the quarter were interest expenses related to the Asahi litigation, interest paid to bondholders as well as other financial income of CHF 3.1 million related to movements in hedging and valuation.

Improved foreign exchange performance is the principal driver of its improvement for the quarter. Tax expense for the first quarter amounted to CHF 17 million, which translates into a tax rate of 14.8%. We would expect the tax rate for the full year to be around the current levels.

Net income for the quarter amounted to CHF 97.9 million or fully diluted earnings per share of CHF 0.85 compared to CHF 0.38 last year. Core EPS amounted to CHF 1.26 per share, an increase of 57% as we continued to benefit from the ongoing share buyback.

Late in the first quarter, we sold 1.9 million treasury shares to a major healthcare investor. These treasury shares are not part of the current buyback program but were purchased on the first part of -- line of trading some time ago. Under Swiss law, treasury shares can only be hold for six years before they become subject to withholding tax.

We remain committed to dilution management. The current share buyback is 62% completed and we aim to finish it in the time-frame originally envisaged. We will then evaluate next steps to ensure dilution to our shareholders is absolutely minimized.

And with that, I will hand back to Roland for the Q&A.

Roland Haefeli

Thank you very much, Andrew. We can move to the Q&A session by 2:20 pm here in Switzerland. We will have our annual general meeting next Thursday. So a lot of time that Andrew and Jean-Paul and Otto have today is a lot to (inaudible). So I will try to get the Q&A done within 15 to a maximum 25 minutes if you agree to that and I kindly ask that in order to facilitate the speed that you ask one question and one question only that we can actually respond properly and don't have to go into remembering what you have asked. So with these kind of technical remarks I would like to open the floor and hand over to the conference call operator, please.

Question-and-Answer Session

Operator

(Operator Instructions) We have our first question from Ravi Mehrotra from Credit Suisse, your question please.

Ravi Mehrotra - Credit Suisse

Hi, thank you. Good morning, guys, and congratulation on a great quarter. Let me ask the most obvious question. Could you give us any quantification of the US inventory build or perhaps comment on the number of patients on drug? Thank you.

Jean-Paul Clozel

Thank you very much, Ravi. I am looking into the error here, Andrew, which you mentioned into some more details or...

Andrew Oakley

Yeah, sure. I mean look it's -- at the end of the year we had inventory levels at the wholesalers was at -- were pretty low levels. We are not talking about major sort of order phasing but one, two weeks of orders. I mean I think if we look at the where we are after the -- where we expect to see for the full year. If we compare it to consensus that was on our website which was showing about the minus two for product sales for the full year, I certainly would think that sales for the full year will end in positive territory for the full year. So that’s pretty much as much quantification as I can give at this point.

Ravi Mehrotra - Credit Suisse

Fair enough. Thank you.

Jean-Paul Clozel

Thank you, Ravi. Next question please.

Operator

We have a next question from James Gordon from JPMorgan, your question please.

James Gordon - JPMorgan

Hello, thanks for taking my question. You know way it follows on from the Tracleer question but it was. You talked about carefully looking at 2013 guidance, I am just wondering how much is the need for this careful look relates to high top line expectations versus the potential for low operating costs when you initially set the 2013 guidance?

Jean-Paul Clozel

Andrew.

Andrew Oakley

James, I think we will be looking at all areas of the P&L in terms of performance in the top line and in terms of spending. I mean you know of course we have some sort of flexibility in terms of what we can and can't do from an OpEx point of view. We certainly think that there is some potential that we will be able to bring some of the profitability that we forecasted for 2014 into 2013 and I think we will make some more comments with the Q2 numbers.

James Gordon - JPMorgan

Thank you.

Jean-Paul Clozel

Thank you very much. Next question please.

Operator

The next question comes from Guillaume Van Renterghem from UBS, your question please.

Guillaume Van Renterghem - UBS

Hi, guys. Just a quick one on the US, can you just provide us with an update on your -- generic situation there, when can we get an update on the legal situation as to whether you would be obliged to provide Tracleer samples to the generic players?

Jean-Paul Clozel

I am sorry, you are asking us about the ongoing procedure in the United States whereas we are being asked to provide commercial sample for Tracleer and given that this is an ongoing case, we cannot forecast if and when the judge will rule. So if you allow us given that it's an ongoing procedure, we would like to decline to comment at this point in time. If the second part, did you only talk about this case or did you also require a slightly update?

Guillaume Van Renterghem - UBS

No, no, it was only this case, but since you don't add to these questions, fair enough. Can you tell us the, I mean what do you estimate that the underlying growth rate in the US, do you think, I mean it used to be around minus 8%, minus 10% in the US last year in terms of underlying rolling quarters. Do you think that you have moved back towards minus 5.5%, do you think it’s a rough estimate?

Jean-Paul Clozel

If I think it’s best with Otto to give us a brief overview about the competitive landscape in the US.

Otto Schwarz

You know I think the competitive situation hasn't changed; we’re still fighting recent down which is a significant label advantage and I think we have managed Q1 well, but, we are not returning to Tracleer growth in the US.

Guillaume Van Renterghem - UBS

But do you think that you have come down to probably minus 5% instead of minus 8%?

Otto Schwarz

No, I am not going to give you numbers; the difference between minus 5% and minus 8% from a basic dynamic point of view, it’s pretty irrelevant. So at the end of the day what I can tell you we are not going to grow the business. It will take some time until we can go back to grow the business in Tracleer.

Guillaume Van Renterghem - UBS

So maybe to follow-up on Ravi’s question, can you tell us roughly how many patients, because you haven't provided that number for a long time; how many patients you currently have on Tracleer in the US, is it something you can say?

Jean-Paul Clozel

No, I guess as we haven't provided in the past, I'm not going to provide it today, just to finish that line it is where we create that and we are working very hard on getting Macitentan approved in the United States where the timelines are for PDUFA in the third week of October. So that's clearly going to be determined where we want to grow again with Macitentan in United States. So you have to be a little bit patient there.

Roland Haefeli

Thank you, Guillaume. The next question please.

Operator

The next question comes from Richard Parkes from Deutsche Bank. Your question please?

Richard Parkes - Deutsche Bank

Just if we look at Veletri sales in the US, it seems to kind of stabilize from a quarter-on-quarter basis and you are saying that growth is now going to come from other territories; I am just wondering what we should be thinking about the magnitude of the sales opportunity in Europe and Japan as potentially larger or smaller than the sales opportunity that you've capitalized on in the US? And I think can I just clarify the comment that Otto made about US trends for the Tracleer business, is that on a volume basis you are talking about or on a value basis?

Jean-Paul Clozel

Number one, here I'm talking on the volume basis, because as you have seen we continuously improved our pricing situation in the US. Regarding Veletri, I don't see it stabilizing; I think its growing relatively nicely. We have moved successfully to the second-generation of Veletri which gives us 0.5 microgram presentation with which we are gaining additional formula recovery. So I expect continuous growth of Veletri out in the US and you might have noticed we also increased our price on Veletri in the US actually pretty significantly to come at par with Flolan.

Regarding the size of the markets, the Japanese market is primarily driven by the pricing level is by far the largest market, so this should significantly add to our growth provided that we can launch this successfully in the US. And also Europe will add some growth and the landscape in Europe is a bit sketchy because the markets with Flolan is not even on the market; there is a different generic situation, but definitely from zero we will definitely grow in Europe as well.

Otto Schwarz

Maybe just to clarify some of the numbers because we're not really agreed, we don't agree with you about stabilizing.

Andrew Oakley

Veletri, on a quarter-to-quarter basis, compared to first quarter of last year, grew 24% on a local currency basis and compared to the prior quarter, Q4 of 2012, grew 10%. So it's still growing.

Richard Parkes - Deutsche Bank

Yeah, fair enough.

Otto Schwarz

Thank you very much, Richard, and next question please.

Operator

We have a next question from Andrew Weiss from Bank Vontobel, your question please.

Andrew Weiss - Bank Vontobel

Thank you for taking my question. Regards to the balance sheet and one of the P&L items, with the arbitration settlement, there is a 12.8 million charge to your P&L, your restricted cash for litigation is going up by 250 million and the litigation provision on the other side of the balance sheet is only going by 25 million. Andrew, can you help us reconcile how those numbers put together and which cases are involved in these different numbers moving around? Thank you.

Andrew Oakley

Yes, sure, Andrew, not a problem. Look the restricted cash relates purely and to the Asahi bond and the decision to increase the amount of restricted cash was one based on the opportunity to reduce cost. So we can have about -- saving of about 2 million in interest and sort of bank fees etcetera by pricing more cash in terms of securitizing the bond. I mean this is a completely voluntary thing. It's completely flexible. So it could be reversed at any sort of day. The 12.9 million charge related to a commercial proceeding that was settled in the first quarter and is not related to the provision, and the movement in the provision is purely foreign exchange.

Otto Schwarz

Andrew, I would like to clarify again. The 12.9 million is not Asahi related.

Andrew Weiss - Bank Vontobel

Yes.

Otto Schwarz

That proceeding that has ended and that is done and over with.

Andrew Weiss - Bank Vontobel

Okay. Can you tell us which one it was?

Otto Schwarz

As part of the agreement on the arbitration, if indeed, that the parties do not comment on.

Andrew Weiss - Bank Vontobel

Okay. So it's a private party, it's not the Department of Justice.

Otto Schwarz

No.

Andrew Weiss - Bank Vontobel

Okay, good. Thank you.

Otto Schwarz

Thank you very much. Next question please.

Operator

The next question comes from James Gordon from JPMorgan, your question please.

James Gordon - JPMorgan

Hello, thanks for taking the follow-up question. It was one on R&D and the moving parts. If [some exercise] was positive interim, I was wondering how much would that reduce 2014 R&D spend, would you that mean maybe you could actually get to double-digit core earnings growth in 2014?

Andrew Oakley

Richard, let’s deal with that one when we had the interim -- sorry James, apologies James, let’s deal with that one we have the results that are a great thing that is positive at the interim so let’s party about that at the time.

Jean-Paul Clozel

So we just let’s not be too optimistic on these opportunity because it will need a very, very I would say a very strongest act to be stopped at this stage.

Otto Schwarz

And may be to clarify again for all of you on the call an interim analysis is scheduled. We would hope to receive information about the outcome of the interim analysis in the coming week. The information that we most likely expected that an independent drug safety monitoring board will advise continuation of the study. So there is no data available to us or to anybody else.

In that case of continuation it would be saying continue to study and we will share that information with you. Should that be a discontinuation notice then indeed again no data would be available other than that the study is being discontinued and patients are being called in for last visit.

So that we are very clear how this is kind to go about in the next two weeks and as Jean-Paul point out company expect the most likely outcome and continuation of the study that would that mean that final study results could become available somewhere in the middle of 2014. Next question please.

Operator

The next question comes from Olivia Capra from Barclays, your question please.

Olivia Capra - Barclays Capital

So my question is for Andrew, and do you seriously related that the Tracleer sales force were converged to take opportunity upon the Opsumit launch and therefore your additional launch cost for Opsumit will be fairly marginal, is it still the thinking?

Andrew Oakley

There is no increase from that headcount point of view, but there will be of course promotional budget that’s required for launch, maybe Otto, see if we can benefit from his thoughts on this.

Otto Schwarz

No, we will -- of course we will -- even from the out of proper investment today move most of the [planning] from Tracleer to Opsumit, but we will need a little of incremental money because we would used our investment into Tracleer over the last three years to reflect kind of the top line development and just need a bit more fund to have a professional launch of core product but no infrastructure. We have enough counts.

Olivia Capra - Barclays Capital

Okay, great. And if I may ask a quick follow-on.

Jean-Paul Clozel

Please ma’am.

Olivia Capra - Barclays Capital

Sure. And the penetration of generics in Canada, is there any update there?

Otto Schwarz

The penetration of the generics in Canada is very low compared to standard. They have currently a treatment in our reach share of around below 20% which compared to benchmark erosions in Canada for generic entry, I think it’s a pretty nice job of our Canadian affiliate to defend the business and it also shows the loyalty, the subscriber base has to Tracleer.

Olivia Capra - Barclays Capital

Okay, great. Thank you.

Jean-Paul Clozel

Thank you very much, Olivia. And I would like to check with the conference call operator, how many calls are still pending?

Operator

So we have three more questions.

Jean-Paul Clozel

Can we go ahead with the three more questions?

Operator

The next one comes from Ravi Mehrotra from Credit Suisse.

Ravi Mehrotra - Credit Suisse

Hi, thanks for taking my follow-up. Can you just remind us of your thought on Macitentan pricing? Obviously I'm not looking for granularity of the actual numbers, but just conceptually what do you think abut with regard to premium or discount percent when you launch? Thank you.

Otto Schwarz

Being conceptually, we will decide the price when we have the label, so concept stays the same. And the second guiding principle is we want to price the product so that we have market access from day one.

Ravi Mehrotra - Credit Suisse

Perfect, thank you.

Otto Schwarz

And restricted market access from day one.

Ravi Mehrotra - Credit Suisse

Understood.

Jean-Paul Clozel

Thank you, Ravi. Next question.

Operator

The next question comes from Peter Welford from Jefferies, your question please.

Peter Welford - Jefferies

Hi, thanks for taking my questions. Just two quick follow-ups, one was just to Andrew regarding the voluntary returns of 60 million in the restricted cash. Is that 2 million, is that the saving per quarter and is that reason for the low financial spend in the quarter rather than full year?

Andrew Oakley

Peter I really wish it was to the quarter, but unfortunately I'm not that good. It’s an annual saving not a quarterly one. So partly it's not thing as good as you thought.

Peter Welford - Jefferies

I just thought you've got a way to up, your interest rates have last but no okay.

Andrew Oakley

The improved financial result was mainly foreign exchange, so that was really improved FX environment for us for the quarter.

Peter Welford - Jefferies

Okay. And then just on selexipag, will you make any comment, I know you said it'd only be a continuation, only be, but will there be any comment at all on tolerability in terms of patients remaining in the trial or anything like that or will it purely be a continuation, discontinuation or otherwise it would be stop the trial?

Jean-Paul Clozel

Yes, purely directional in terms of continue or discontinue. There is no data communication flow from the DSMB to the company. There is no data therefore that we could share with the market. We are going to be in the same situation.

Peter Welford - Jefferies

Okay, thank you.

Jean-Paul Clozel

Thank you. With that, we will have the last question please.

Operator

And the last question comes from Richard Parkes from Deutsche Bank, your question please.

Richard Parkes - Deutsche Bank

Hi, thanks for taking my follow-up. It was just in relation to the futility analysis on the GRIPHON study, I am just wondering what has been -- is it the charter’s decision and it’s simply based on calculation of whether you can still pay the statistics or is there something else that has been given to them to define what would be futile?

Otto Schwarz

Well, the futility decision as a standard is unable to reach statistical significance on the primary endpoint, that's the key hurdle. Jean-Paul, do we have any additional information on the stats plan?

Jean-Paul Clozel

No, it’s clear that the study could be stopped if there would be safety issue, that's number one. And number two could be stopped for futility if looking at the present results we have no chance to be positive. So that's usual and that recommendations was DSMB and they have to deal with the data that they have with viability of data to make the calculation in order to tell us that it makes sense to continue the study as it is.

But we just would like also to say that for efficacy, we would stop for -- we wouldn't -- there maybe not only simple p-value was the only criteria, we will look and we have asked and it's usual the DSMB is looking at all the variable data to make that decision. It's not only a p-value. It's also looking at the entirety of the data because we know it has been a very long. It would be a very large, it's largest PAH study ever done and we want to be sure either to stop or to continue for the good reasons.

Richard Parkes - Deutsche Bank

Thanks very much.

Otto Schwarz

Thank you very much, Richard. And with this, at 2:35 PM Swiss Time, I would like to conclude this call by quickly point out to you a significant news flow over the coming week. We're looking at the annual general meeting of shareholders to take place on Thursday. We will clearly have financial results to be shared with you on the 18th of July. In between, as you have heard, points are to implement selexipag that we're going to press release.

At the top of our line we have anticipated disclosure in Berlin at the end of the month with some more detail on the cadazolid Phase II results that have been shared with you top line in December. We're also looking at data presentations at American Thoracic Society, where most importantly there is a presentation scheduled to have a deeper look at hospitalization and death that occurred in the macitentan study that if you remember that’s an hospitalization due to PAH was reduced by 50% in the SERAPHIN Phase III pivotal study.

Second half of the year we look forward then to initiate new clinical program with ponesimod and cadazolid. And most importantly, we look then forward to the hopeful successful conclusion of regulatory proceedings in the United States for macitentan where we have a PDUFA for the third week of October and we hope also to make significant progress in the European Union of the market through the regulatory filling.

Jean-Paul Clozel

Thank you very much for your continued interest in Actelion. And with this conference call operator thank you for closing down the call and thank you very much for your participation.

Operator

Ladies and gentlemen, thank you all for attending. You may now disconnect.

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