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Executives

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

Jean-Paul Clozel - CEO

Andrew Oakley - EVP & CFO

Analysts

James Gordon - JPMorgan

Ravi Mehrotra - Credit Suisse

Andrew Weiss - Vontobel

Nicolas Guyon-Gellin - Exane BNP

Guillaume van Renterghem - UBS

Richard Parkes - Deutsche Bank

Michael Leuchten - Barclays Capital

Sachin Jain - Bank of America Merrill Lynch

Actelion Ltd (OTCPK:ALIOF) Q2 2013 Earnings Conference Call July 18, 2013 8:00 AM ET

Operator

Good afternoon, this is the Actelion conference operator. Welcome to the Actelion Half Year 2013 Financial Results Conference Call. As a reminder all participants are in 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 Investor Relations and Public Affairs. Please go ahead.

Roland Haefeli

Good morning or afternoon to those of you in Europe. Welcome to Actelion's first half 2013 financial results conference call. We have issued a half year report as customary for Swiss listed companies, next to the press release and all the detailed comments are available for you on our website. But to give you some commentary we have on the call today, Jean-Paul Clozel, the Chief Executive Officer of Actelion and Andrew Oakley, the Chief Financial Officer. They are here to provide you with more details on our performance in the first half of 2013. They will do so first in a presentation. Afterwards for the Q&A session we will be joined by Otto Schwarz, our Chief Operating Officer. We have allotted 45 minutes for the call and hopefully we will be able to answer all of your questions.

Before I hand over to Jean-Paul please be reminded that we will make forward-looking statements and you are hereby appropriately warned about the benefits or dangers to be invested in Actelion’s stock. And with those introductory remarks Jean-Paul, your floor.

Jean-Paul Clozel

Thank you Roland. Good afternoon or good morning to you and thank you for joining us today. I am very pleased with our strong performance in the first half of 2013. The numbers speak for themselves, with sales up by 3% and operating expenses down by 5% I am pleased to report that our core earnings are up by 18%. With these strong earnings we were also able to focus on returns to our shareholders with an increase in dividend and with 92% of the CHF 800 million buyback completed. Finally to cap off a well-managed six months we are also in the position to upgrade our earnings guidance. Andrew Oakley will discuss numbers and what is behind them in more detail after my introductory remarks.

Very importantly the overall progress was made in the first six months of this year are based on the clear cut focus on all level at Actelion to successfully implement a strategy that has three key elements; sustaining growth of pulmonary arterial hypertension franchise, build an additional specialty franchise as a mid-term goal and doing both while optimizing profitability.

As a CEO my key task is to identify growth opportunities and direct the organization to fully execute on those. Today Actelion has several opportunities at hand and we are working hard to bring them to fruition. First, Macitentan or Opsumit as it would be branded then for launch is the closest at hand. Regulatory proceedings are on track with a U.S. PDUFA date on the 19th of October this year. In all the discussion I have had over the last few months with pulmonary hypertension expert I am pleased to report that they are truly excited that the new opportunities Opsumit is expected to provide them in their daily practice. Internally we are fully aligned to size this opportunity with launch preparation very advanced. In the Q&A session our Chief Operating Officer, Otto Schwarz should be available to provide you within the limit of the possible more color on our efforts with Opsumit.

I am also very excited that Actelion had yet another opportunity to change pulmonary hypertension care with selexipag orally our available IP-receptor agonist. Today an estimated 10,000 patients our of around 70,000 treated patients with pulmonary arterial hypertension receive Prostacyclin therapy either intravenous or inhaled. In Q2 selexipag successfully passed the interim analysis with a unanimous recommendation from the independent data monitoring committee and the study is continuing as planned. Accordingly the final result of this pivotal study are now expected in mid-2014. Macitentan is not only close to reach the market in pulmonary arterial hypertension this extremely well studied endothelin receptor antagonist is already being evaluated in Phase III study in digital ulceration.

We are also testing with much higher doses up to 15 times a regular dose if Macitentan is well tolerated in concentrations with Glioblastoma. If this is the case we will then embark on a Phase II program sometimes in 2014. In the same year we are also planning in initiating studies with Macitentan in other undisclosed autonomous indication.

Another opportunity for value creation of Actelion’s capacities are another oral antibiotic in (inaudible) disease related infection. Our first Phase II data presentation in Berlin in Q2 was well received and we are now in the process to initiate the Phase III with first patient enrolment in this Phase III before the end of the year. In the field of S1P receptor moderators we are reviewing our development strategy for immunological disorders on the basis of encouraging data obtained with our follow-up compound. Emerging tolerability data in human volunteers suggest that this compound may be substantially differentiated from other S1P receptor modulators currently on the market or in clinical development.

In conclusion I can therefore report to you that Actelion has made significant progress in the first six months of 2013. We working diligently on the many opportunities at hand and we do so with a very keen eye on our bottom line. In order discuss our financial performance I now hand over to Andrew. Andrew please?

Andrew J. Oakley

Thank you, Jean-Paul and good morning and/or good afternoon. During the first six months of 2013 Actelion product sales increased by 3% in local currencies to CHF 894 million. Operating income amounted to CHF 262 million, a strong result albeit to a certain degree a phasing of both sales and OpEx. Core earnings for the first half of the year amounted to CHF 330.7 million, an 18% increase in local currencies. Fully diluted earnings per share in the first six months of 2013 amounted to CHF 1.73 compared to CHF 1.46 for the same period last year. Amidst a continued challenging environment product sales reached CHF 884.1 million an increase of 3% in local currencies. This very good performance was driven by a number of factors and I will go into more detail for each product.

Looking firstly at segmentation, U.S. sales accounted 42% of total product sales, 38% of sales were from Europe. 10% were from Japan and 10% from other markets of the world. Just a note on the U.S. performance, sales reductions in the first half of 2013 were slightly higher in comparison to last year. However net sales performance was positively affected by rebate reversals related to prior year sales to government customers. These reversals amount to approximately CHF 8 million. There may be an additional such benefit in the second half of the year potentially further adding to core earnings growth.

Now let me now provide some detail on performance of each of our products. Tracleer sales on a local currency basis increased by 3% to reach CHF 766.9 million. In the U.S. we did continue to see some erosion of market share leading to a decrease in shipments to patients although unit performance for the half year was assisted by a modest increase wholesale at inventory levels. Sales performance in the U.S. was also aided by price increases of 4% in January and 5.5% in March.

In Europe along with the rest of the pharmaceutical industry we saw price levels continuing to decrease with average pricing for the half year down approximately 3% which eroded an otherwise solid underling performance. In Japan our second largest country market continued patient demands saw shipments increased by 10%.

Ventavis sales for the period were CHF 53.2 million. This represents a decrease of 6% in local currencies with unit volume decreasing by 10% in the face of continued competition but this was somewhat offset by a price increase of 6% in January of this year. Veletri continued to gain share of the IV Epoprostenol market in the U.S. finishing the first half of 2013 with around an estimated 55% market share. Overall unit shipments were up 16% and the company also benefited from a 19% of price increase during the period. We also saw first sales in Japan in like June with just over 100 million yen of sales in the first week. Zavesca sales continued to increase strongly with local currency growth of 17% to CHF 47.7 million, supported by a price increase of 9% in the U.S. in January of this year. Outside of the U.S. we continue to see strong uptick in the Niemann-Pick Type C indication with 29% more patients on therapy.

During the first half of 2013 core research and development expenses totalled CHF 167.7 million, a decrease of 16% on local currency basis. As a result of last year's cost savings initiatives both fixed and variable costs decreased. Personnel related costs at headquarters are 9% lower compared to first six months of 2012. Discretionary spending was also lower with the SERAPHIN study concluding in April 2012 and a number of studies being discontinued, again driven in part by the cost savings initiatives. However with the cadazolid Phase III and other early development programs expected to start before the end of 2013 research and development expenses will increase in the second half of this year.

Core selling and general administration costs for the first half of the year amounted to CHF 283.2 million, an increase of 3% on a local currency basis. During the second quarter we saw an acceleration of launch activities for both Veletri and Opsumit. Veletri saw first sales in Japan late in June and in Europe the registration process was successfully concluded, and we’ll be launching in the first European markets imminently. We also intensified our outreach to PAH physicians ahead of the expected approval of Opsumit later this year. Additional costs were also seen at the corporate level in support of various commercial application proceedings.

The strong operating performance has resulted in our ability to bring forward into 2013 -- growth which we had previously forecast to occur in 2014. For the first six months of the year core earnings on a local currency basis grew by 18% to CHF 330.7 million. I will deal with the full year picture later in the presentation.

Non-core costs for half year were 69.4 million compared to CHF 55.6 million in 2012. The main driver of the increase is an arbitration settlement of a commercial matter in the amount of CHF 12.9 million in the first quarter of the year. As a reminder the first half of 2012 included a 9.1 million milestone payment made to Auxilium Pharmaceuticals and we also had a higher level of doubtful debt reversals, 19.3 million in 2012 compared to 8 million in 2013. The majority of the reversal of doubtful debt provisions in 2013 is related to Greece as we received payments of CHF 21 million during the first half of this year. As a reminder June 2012 saw a substantial payment of old receivables in Spain.

Financial results for the half year showed a loss of 28.3 million compared to a loss of 22.8 million for the corresponding period in 2012. The main product continues to be interest provisions related to the Asahi litigation. The total charge for the period was CHF 19.7 million compared to CHF 20.5 million in the first half, first six months of 2012. Movement in other financial expense was mainly due to the weakening of the Japanese yen compared to the Swiss franc. Tax expense for the first half six months amounted to CHF 34.4 million which translates into a tax rate of 14.7% and for the full year the tax rate is expected to remain between 14% and 15%.

Net income for the first half of this year was CHF 199.5 million which translates into fully diluted earnings per share of 1.73, an increase of 18%. The share buyback over the last 12 months has contributed one-third of this increase. Core earnings per share increased on a local currency basis by 21% to CHF 2.39. The strong operating performance for the first six months of this year has resulted in cash from operations increasing by 18% to just under CHF 300 million and free cash flow increasing by 37% to CHF 285.6 million. As the headquarter buildings are nearing completion and without further investment in (inaudible) investment in CapEx was substantially lower at CHF 11.6 million, a decrease of over 40%. We've also increased the restricted cash related to the bail bond of the Asahi litigation which has resulted in annualized savings of just under $2 million.

Dividend payment for the year was CHF 113.3 million as the shareholders approved an increase of the dividend by 25% to CHF 1 per share. During the first six months of 2013 we bought back shares in the amount of CHF 349.3 million and the share buyback is now 92% completed.

For 2013, unforeseen events excluded, we now expect local currency core earnings growth to cross into double-digit territory compared to the previous guidance for the year of an unchanged core earnings level relative to 2012. Compared to the original earnings guidance provided in May of last year we will enter 2014 with a much higher earnings based on the back of higher than previously guided earnings levels in both 2012 and 2013. Therefore for 2014 we would now expect core earnings in local currencies to at least the same level as 2014 as the case, compared to the current year. We would then expect earnings growth to be at least in the single digit percentage range into ‘15 again from a much higher base than expected when the full year outlook we issued in 2012.

And with that I will hand back over to Roland.

Roland Haefeli

Thank you very much, Andrew. And with this ladies and gentlemen I can open the floor for questions. If you could do us a favor clearly announce your name, your affiliation and truly try not to challenge our abilities to take notes only ask one question and go back in the queue that would help us to clear the line. With this conference call operator open the floor please.

Question-and-Answer Session

Operator

(Operator Instructions). We have the first question from James Gordon from JPMorgan, your question please.

James Gordon - JPMorgan

Hello, it's James Gordon from JP Morgan. Thanks for taking my question. I had a few but if I have to do one my question would be the 2014 and 2015 guidance what does that assume in terms of the Macitentan U.S. labels for liver toxicity or liver monitoring, so could the guidance encompass getting U.S. label that does require liver monitor initially, or could it be outside the guidance if you get a clean label?

Andrew J. Oakley

James, that’s a very good question and a good try. Our guidance is based on earnings level and of course earnings is always a balance between investment in R&D and possibilities. So if things are good then we can spend some more and if not then we’ll cut back but earnings guidance is earnings guidance.

James Gordon - JPMorgan

Okay. I will get back in the queue.

Roland Haefeli

Thank you James and I agree good try. Next question please.

Operator

The next question comes from Ravi Mehrotra from Credit Suisse. Your question please?

Ravi Mehrotra - Credit Suisse

Thank you for taking my question. It relates to the S1P developments. Could you give us any granularity on the improved clinical profile of the follow up S1P that you saw, thank you.

Roland Haefeli

Thank you, Ravi that would be Jean-Paul to discuss.

Jean-Paul Clozel

It’s difficult because we want to confirm our first findings and observations and it’s very clear that I think that we might have found the drug which would be devoid of some of the side-effects of the other drugs, especially during the first dose. So we want to confirm that and I think in my mind it’s very clear but we need to have a confirmation and I think we need to think really what should we do if we have such a differentiation. What do we do with Ponesimod, should we change our program? And in order to take this decision we need to get more information and we are working very hard now to get this information.

Ravi Mehrotra - Credit Suisse

Thank you.

Jean-Paul Clozel

Thank you.

Roland Haefeli

Thanks Ravi. Next question please.

Operator

Our next question comes from Andrew Weiss from Bank Vontobel. Your question please.

Andrew Weiss - Vontobel

Thank you for taking my question. One for Andrew. I noticed on the balance sheet that the cash for litigation is one of the provision have moved from the long-term section to the current section of the balance sheet. Can you tell us what is -- what the auditor’s or what is your thinking behind that change in the balance sheet position?

Andrew J. Oakley

Andrew, it’s pretty simple. We would expect that within the next 12 months the matter would be resolved. So in that case we moved from non-current to current.

Andrew Weiss - Vontobel

Is that based on your assessment or do you have a court date that should…

Andrew J. Oakley

It’s based on our assessment.

Andrew Weiss - Vontobel

Thank you.

Jean-Paul Clozel

Just to quickly update as we have said before it’s at the discretion of the judges in the United States to come to a conclusion of that proceeding. We would expect that it could happen before the end of this year. And with this next question please.

Operator

The next question comes from Nicolas Guyon-Gellin from Exane BNP. Your question please.

Nicolas Guyon-Gellin - Exane BNP Paribas

Hello. Thanks for taking my question. My question is about Macitentan, how confident are you that there will be no advisory committee in the U.S., especially since Maci is not on the agenda of the next fix of August 1?

Jean-Paul Clozel

I think you just said it. It’s not on the agenda and we are not announcing any delay so you can draw the conclusion. We can never be 100% sure because it’s always possible that at the last minute the FDA would change mind but I think that we can say rather safely that there will be no Advisory Board for Macitentan.

Nicolas Guyon-Gellin - Exane BNP

Okay. Thank you.

Roland Haefeli

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

Yeah, hi. A question for Andrew. I am just wondering whether you could explain your hedging strategy and tell us I mean especially for the U.S. and euros what is your current exposure for 2013 and what’s your strategy for 2014?

Andrew J. Oakley

I’m not sure then that's a question for today. I mean we have a policy that’s a 12 month rolling policy in terms of hedging and zero months we're 100% at 12 month, we're somewhere between zero and 100. It's from a -- in terms of impact on the P&L it's not a huge impact.

Guillaume van Renterghem - UBS

Okay, thank you.

Roland Haefeli

Thank you Guillame. Next question please.

Operator

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

Richard Parkes - Deutsche Bank

Hi it’s Richard Parkes from Deutsche Bank. Thanks for taking my question, good results. Just wondering, I mean you are generating lot of cash, you’ve got strong balance sheet despite the share buyback. So I was just wondering what your thinking was in terms of utilization of cash going forward, particularly with postponement of the ponesimod Phase III study, maybe a freeze-ups on R&D budget there, I’m just wondering whether you see any M&A or in licensing opportunities, you’ve got a vision of having a trying to build a second franchise. So are you seeing any opportunities out there?

Roland Haefeli

Jean-Paul?

Jean-Paul Clozel

Yeah, I think it's ponesimod if we decide postpone the start of the Phase III we have many other potential projects. We are very conscious of our commitment to a level of profitability, to commitment to our shareholders, so we are clearly limited into the amount of spending for R&D. And therefore we have to be extremely careful to find the best way to spend our money and this is what we try to do. So we have run and for example we had mentioned we had some projects which are moving extremely well. Macitentan should be approved this year and we can start as we have always told you we can start other program with Macitentan and of course once selexipag we get to know the efficacy and the results of GRIPHON we also might initiate other programs. So I don’t think we will expand much in terms of R&D but maybe in a different way than previously anticipated.

In terms of also using our cash for acquisitions we have said that we have a very clear commitment also on profitability and this applies also for M&A. That means that we do not want to be diluted by large acquisitions. What we want to do is to find M&A opportunities which would be accretive extremely rapidly and that’s difficult but we're working very hard and hopefully we might be able to find some opportunities.

Richard Parkes - Deutsche Bank

Okay can I just ask a quick follow-up on I just wondered if Andrew could maybe give us some guidance on R&D as a percentage of sales this year because given that postponement of the Phase III study I’m assuming cost are going to be below the historic range this year.

Andrew J. Oakley

Richard they probably will be but I’m not going to sort of necessarily guide that precisely on individual spend items but we do expect to see that there will be an increase in R&D spend in the second half, but be competitive first half of the year mainly with cadazolid starting, sort of sometime this half you will see an increase in costs for the second half, this is the first half. So if you take the first half you’re going to have to add a little bit in terms of spend.

Richard Parkes - Deutsche Bank

Okay, great thanks.

Roland Haefeli

Thank you and good try again. Next question please.

Operator

The next question comes from Michael Leuchten from Barclays your question please.

Michael Leuchten - Barclays Capital

Yes thank you. One quick if the 10-Q, the updated guidance you’ve offered for 2013, [Inaudible] on the number slide that they are they are going to be about CHF 50 million less in costs this year than you had initially anticipated and you’re clearly referring to the fact of that being the efficiency program coming through quicker. Could I just attempt to add a little more color there what’s really happened quicker than you expected that allowed you to upgrade the guidance and reflect that in your expectations?

Andrew J. Oakley

Michael I’m sure about the numbers off the top of my head that you’re mentioning but look from a color perspective we probably have been extremely careful in terms of not to let people go over the last six months but if people are leaving we have been very sort of circumspect in terms of replacing these people so the natural headcount has come down and we saw that that headcount come down in R&D by about 9%, during the first six months of the year compared to where we were in June of last year. I mean clearly yes I mean the decision to have a little bit of a delay with Ponesimod program has been for that 2013 in terms of some of that spend is not going to occur this year.

Jean-Paul Clozel

I just would like to add that there are efforts everywhere. So if every department tries to decrease its expenses to cost conscious at the end it adds up and that I said that I am very happy that all the collaborators of Actelion really have tried to come out with savings and this is why we see this decrease incur.

Michael Leuchten - Barclays Capital

Thank you.

Roland Haefeli

Thank you very much. Next question please.

Operator

The next question comes from Sachin Jain from Bank of America. Your question please.

Sachin Jain - Bank of America Merrill Lynch

Hi, thanks for taking my question. A quick follow-up on S1P1 in Phase I. I know it’s early stages at the moment but is there any potential for that asset to move straight to Phase III and if that was the case any early thoughts on partnering versus going solo in various indications. Thank you.

Jean-Paul Clozel

That’s a very rapid question. Yeah, I think but it’s a really interesting question I think. It’s a key element of our thinking because clearly the follow-up compound we know a lot about what should be the dose effective, what should be some of the efficacy attribute of such a product and since the most of the side effects appear very early into the treatment with such a drug we can very quickly detect if we can see the side effects. So I think that I wouldn’t say to go from Phase I to Phase III in chronic disease is a dream. I think it’s unlikely to be so simple but I could say we’d accelerate markedly Phase II and it might allow us in some projects to go from Phase I to what we call Phase II/III. So sometimes a much natural Phase II which might in some indication give us some chances to get approved. So this is why we need to think. It’s not -- nothing is decided and I think that if these data are confirmed I think it would allow us also to re-discuss with some partners we were looking with such profile in our discussion. So yes you are right it might revive some discussions.

Sachin Jain - Bank of America Merrill Lynch

So just to clarify, would it be partnering in just MS or would you potentially then (inaudible) in partnering as well?

Jean-Paul Clozel

No, I think we need to change the complete strategy because if we start with this -- let’s imagine that we would start and decide to start with these follow-up compound, we need to think of the best, at this time development strategy and maybe to discuss with some partners at this time and I truly and I am absolutely convinced from the beginning that to get a partner in such large potential market is never an handicap but a very big advantage if we can.

Sachin Jain - Bank of America Merrill Lynch

Very clear, thank you.

Roland Haefeli

Thank you very much. Next question please.

Operator

We have a last question from Guillaume Van Renterghem from UBS. Your question please.

Guillaume Van Renterghem – UBS

Yeah, hi. So just to come back on the rebate for S1 in the U.S. just to confirm it was pricing [inaudible] in the U.S., they boosted sales by 5 million?

Andrew J. Oakley

No, number is eight.

Guillaume Van Renterghem – UBS

Eight, okay sorry. So even actually if you take that out well we see clearly that the growth in sales in the U.S. has improved while it was down for the last basically six quarters and in Q1 it improves, now in Q2 it improves again. I am just wondering if you can explain why, what has changed? Is it we are going to have less competition from [Metaris], is it because physicians wanted to switch patients from [inaudible] switch them and we should see continuous growth or bring back to positive growth?

Jean-Paul Clozel

I think from the main dynamic sales have not really changed. I think we are reaching at some point in time kind of the value where the erosion of, additional erosion of [Metaris] has become relatively small. So we are reaching a new equilibrium between the two products which we of course will change when Opsumit comes on the market. We have been pretty aggressive in our pricing and I referred to Andrew’s presentation, we have also had an inventory effect because we had very low inventories in June last year. So overall I think it’s -- we are stabilizing first year business. Can it come back to growth? Not that much because there is not very much growth in the euro market, the growth of the euro market will come with the launch of Opsumit because we can then go after market segments which are today much more difficult to go after with Tracleer also in this period.

Guillaume Van Renterghem – UBS

Okay and just a follow-up on the inventory level. How much do you estimate the change in inventory has boosted Q2 sales in U.S.?

Jean-Paul Clozel

It’s well below 10 million. It’s not substantial yeah. And actually just said to be clear we have very-very healthy inventories out. We were just very low in June last year so we are kind of back to normal but it has a bit of in effect in the U.S. and you know every million counts when you are a bit under pressure as we are with Tracleer now.

Guillaume Van Renterghem – UBS

Okay, thank you very much.

Jean-Paul Clozel

Guillaume to be precise you said Q2 there was inventory that we flat for Q1 and it had have slightly compounding Q2. So just that we are absolutely clear. We are talking about half year. You said Q2, Q2 we saw a slight coming down.

Jean-Paul Clozel

Thank you. Next question please.

Operator

We have three more questions. The next one comes from Andrew Weiss. Your question please.

Andrew Weiss – Vontobel

Thank you for giving me the opportunity to follow-up. Andrew, with regards to the share buyback that will be finished by the end of the year. Can you give us a sense of how you look at this topic going forward? I remember that part of the reason for this buyback was to get rid of an unwanted guest in your investor pool. How do you think about that buyback going forward? Is that still an appropriate tool? Have you preferred returning cash to shareholders by dividends?

Andrew J. Oakley

I think we are going to look at all avenues of including shareholder returns whether that’s through M&A, whether that's through increased dividend or more buybacks. I think let’s get through the current one, let’s get Opsumit up in running and then perhaps towards the end of the year early next year we can discuss what we will do from a capital allocation point of view.

Andrew Weiss – Vontobel

Okay can I follow-up on that list, so acquisition, dividends, buyback would that also be your priority list how you would look at how to redistribute cash?

Andrew J. Oakley

No, Andrew.

Andrew Weiss – Vontobel

Okay, thank you.

Roland Haefeli

Thank you, Andrew. And so second last question?

Operator

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

Richard Parkes – Deutsche Bank

Hi, yeah thanks for taking my follow-up. Sorry my phone died half way through the call so my apologies if I am asking something that someone else has already asked. I noticed on clinicaltrials.gov that the first study of Macitentan in digital ulcers looks like it’s completed recruitment. I think the study is 16 weeks follow-up I was expecting data till mid next year but I was wondering maybe that could come earlier.

Jean-Paul Clozel

At this point in time we don't have a full timeline yet but we’ll update on the Q3 conference call where we stand. If we give us the range like on that one we want a little bit more on the book before we make a call.

Richard Parkes – Deutsche Bank

Okay. I also noticed that you start the trials in Maci in Eisenmenger's syndrome. I was just wondering if you could just discuss what you were looking for there and how you think that could differentiate Opsumit?

Roland Haefeli

Jean-Paul, do you want to discuss that.

Jean-Paul Clozel

No, I think we -- Tracleer has been shown to be effective in Eisenmenger and I think as you know Opsumit should be even a better drug than more efficient and safer than Tracleer in our belief and we would like to show it in the same type of patients. So if you can get at least the same efficacy without some of the drawbacks of Tracleer that would be even better. So I think it's quite important for us.

Richard Parkes – Deutsche Bank

Okay, great, thanks again.

Roland Haefeli

Thank you very much. And with this we come to the last question, just ahead of the allotted time.

Operator

The last question come from Michael Leuchten from Barclays Capital. Your question please.

Michael Leuchten - Barclays Capital

Thank you for taking my follow-on. Andrew just coming back to the guidance comments you made this morning. I said you said on the newswires that there is upside to your 2014-'15 guidance. In terms of the spirit of that comment you are very committed on the Opsumit contribution. But was that a cost related comment or do you see upside to your base business that could contribute to that guidance from a revenue perspective?

Andrew J. Oakley

Michael I think if you read the quote carefully, it's a pretty generic one that says that if sales are good then there is always upside. Look our guidance is where we are at the moment and the process as we said is always a balancing act between continued investment in R&D and banking your profit. So I wouldn't read too much into it.

Michael Leuchten - Barclays Capital

Fair enough.

Roland Haefeli

Thank you very much and with this hopefully we have been able to give you some more background color on today's Actelion half year report 2013. We are glad having you. We look forward to hopefully see you in person over the coming weeks and months as you will remember [inaudible] conference season will start again soon with ESC in Amsterdam starting with [cardiology]. We have numerous abstracts files submitted at this and other conferences in the weeks and months ahead, including rheumatology in Europe as well as chest and ACR in the United States towards the end of October, beginning of November but we will talk sooner, we will talk again on the Q2 -- Q3 conference call on 17th of October and we are looking forward to update you hopefully 18th or 19th of October about the U.S. PDUFA for Opsumit. And with this [Call Ends Abruptly].

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Source: Actelion Ltd (ALIOF.PK) CEO Discusses Q2 2013 Results - Earnings Call Transcript
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