Actelion's CEO Discusses Q1 2014 Results - Earnings Call Transcript

Apr.17.14 | About: Actelion Ltd. (ALIOF)

Actelion Ltd (OTCPK:ALIOF) Q1 2014 Earnings Conference Call April 17, 2014 8:00 AM ET

Executives

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

Jean-Paul Clozel – CEO, Founder, Member of the Board, and Chairman

Otto Schwarz – EVP & COO

André C. Muller – EVP & CFO

Analysts

Guillaume Van Renterghem – UBS

James Gordon – JPMorgan

Richard Parkes - Deutsche Bank

Sachin Jain – Bank of America

Ravi Mehrotra - Credit Suisse

Peter Welford – Jefferies

Operator

Welcome to the Actelion First Quarter 2014 Financial Results Conference Call. As a reminder all participant are in a listen-only mode. 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

Thank you very much. Good morning to those of you in the United States. Good afternoon to those of you in Europe, who actually managed to still join this call, we do apologize for the fact that we’re delaying your eastern hunt. We’ll try to be as short and concise as possible to allow you to leave as quickly as possible.

We hope that your questions will also be short and precise so we can answer them in a short and precise manner after the presentations that are going to be made by Jean-Paul Clozel, Chief Executive Officer; who will talk you through the key highlights of the very pleasing and satisfying numbers we report today. Otto Schwarz, Chief Operating Officer will give you a detailed view and peek into the commercial dynamics behind the product sales that we’re up 9%, this exclude the U.S. rebate reversals that are very good finding and we have also with us André Muller, our Chief Financial Officer, who will dwell into the core earnings gross we grew again 9% if you take out the impact of the U.S. rebate reversals again a very pleasing number. And I can also tell you that neither in the press release or in the slides that we hide any eastern eggs.

So, accordingly I can handover with this, and I still nevertheless even if it’s before eastern I have to warn you about the risks of being invested into Actelion as this call will include forward-looking statements. And with those 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 for our review of the progress we made in the first quarter of 2014 which has been a very good start as a year for us at Actelion.

I’m pleased to have Otto Schwarz, our Chief Operating Officer here today to take us through the progress we’ve made. He will give you detail on our product platform. Our CFO, André Muller will then take us through the key financials.

You may remember the first slides from our conference call just two months ago was the 2013 full year results. This is our strategy for long term shareholder value creation which we announced in 2012. It is this around three key elements, first we’re focusing on (Indiscernible) and growing our PAH process. We’re building another specialty franchise and why we are transitioning our PAH function and bidding this other franchise, we want to optimize profitability.

As you would hear, we had made progress on all fronts. Here the key highlights in the first quarter, I’m pleased to report that we again had 12 financial results, with sales of CHF 469 million which is an increase of 13% supported by U.S. rebate reversals. Our core earnings had CHF 189 million up 19% at constant exchange rates.

Let’s now look at the highlights on the commercial front, the launch momentum Opsumit continues to be strong for the U.S. And also in the European countries we’ve launched such as Germany and Switzerland, we have strong demand. In Germany which is a very important market for us, we can see that the initial launch momentum is as strong as in the U.S. We are on target to continue to launch Opsumit in more markets worldwide and our siding in Japan later on this year. Looking at Tracleer, sales were at CHF 383 million, this is an increase of 7% in local currencies. So, the demand for Tracleer is still strong in market where Opsumit is not available yet.

Moving on to Veletri which is becoming a global asset. We sold the CHF 53 million for the first quarter so demand was mainly driven by Japan. The key part of delivering our strategy is to build an additional specialty franchise. As you recall the acquisition of Ceptaris and in specialty product Valchlor was exactly that. We acquired Ceptaris in September and launched Valchlor in November within the CTCL Center of Excellence.

We expect the demand to grow as Valchlor would be more wider (indiscernible). As you can see we are at the very good start to the year in terms of product sales. Otto is going to more detail on the products and explain you what it says driver were.

Let’s now move to our Selexipag progress where we have managed in the first quarter. We continue to work very hard in preparing for the closer of the Phase III study for Selexipag, to study is a long term outcome trial with over a thousand patients fully involved. We are co-developing Selexipag, hopefully if the study is positive it will be a positive feedback way to significant larger portion of patients. Selexipag is a non-prostanoid which has a different receptor interaction that is more selective for key process in receptors involved in pulmonary arterial hypertension. We are on track to getting results in the coming weeks unforeseen events excluded.

Let’s now talk about our own antibiotic in phase III form for epoprostenol disease infection. Epoprostenol disease is the species of positive is formed, forming bacteria that is best known for closing antibiotic associated Diarrhea. The bacterium causes Diarrhea when competing bacteria in the gut that has been wiped out by previous antibiotic treatments. Our another antibiotic cadazolid is a strong inhibitor of Clostridium difficile leading to strong suppression of toxin formation. We are continuing to inure into the program and this program should comprise about 1,300 patients worldwide. We are very pleased that in February this year as the FDA designated (indiscernible) has qualified infectious disease product and factorized development program.

Moving on to the key financial, on the right we go into the financial results in much more details but here are the highlights. Since for the first quarter, (indiscernible) an increase of 13% at constant exchange rates and co-earnings to share of 29% also at constant exchange rate to CHF 1.46. As you can see clearly we are also delivering on the said element of our strategy optimizing profitability.

I now hand over to Otto to give an update on our product performance in the first quarter of 2014.

Otto Schwarz

Thank you, Jean-Paul. Good afternoon and good morning to all of you around the globe on the phones, or your smart devices. I appreciate your interest in Actelion. I would like to give you a commercial perspective on the Actelion performance Jean-Paul just described to you in big picture terms a few minutes ago.

In Q1 we delivered a pretty decent commercial performance across all regions with total product sales of CHF 469 million, a 30% gross versus prior year in local currencies. The sales split by region is shown no material changes versus the previous quarters. The performance was driven by very strong gross in Japan, it was also boosted by some significant Tracleer inventory replenishment following the by annual March first price adjustment cycle as well as by double digit growth achieved in Germany, Italy, Switzerland and PHA emerging markets like Russia, China and our Latin America and Asian distributors business.

Q1 performance has been accelerated by some extraordinary reverses of Medicaid, managed Medicaid rebates in the U.S. of a total of CHF 18 million and the affect of 2013/2014 price increases across the portfolio. You might have noticed that we increased U.S. price of 3% in January and 4.99% in April this year. The price was increased by 9.7% in January, 8.9% in April lastly price in the U.S. was adjusted plus 14.6% in January 2014.

Beyond ongoing demand gross Q1 also benefited from strong cash collection in Greece as you can recall we changed in spring of 2012 in Greece to cash revenue recognition. So let's move on to specific products and I guess we should start with Opsumit. Opsumit launch is continued to go well. We have net sales of CHF 15 million in Q1. The U.S. launch momentum is on track. Net sales are still impacted by our early access program and in the few minutes I will give you a bit more color on our U.S. sales dynamics.

We also launched in Q1 in Germany, Switzerland, Austria, Denmark, Norway and in Canada. U.K, Ireland and Netherlands we follow in the second quarter. Let's have a closer look at the Opsumit dynamics in the U.S. where we launched at end of October 2013. After five months of the market, the affect of the first three months enrollment dynamics is now very visible which has been driven by the high volume prescribers. Consequently, average enrollments for Opsumit came down somewhat in February/March, however, they are still two times higher than the Tracleer enrollments prior to the Opsumit launch. Tracleer at the same time now is down to one third of weekly enrollments compared this pre Opsumit levels. This means we have eroded two third of the Tracleer new patients business. It also indicates that the erosion of the (indiscernible) patients this year is less pronounced. We continue to see upgrades to Opsumit from Tracleer also the absolute number of patients is somewhat lower versus the initial phase. The early access program is delivering as 75% to 80% of the patients who get the second shipments are on commercial reimbursed track with the similar percentage of patients receiving the shipment. Around 15% to 20% of patients will go into a patient system program due to lack of coverage. However, this percentage is expected to go down overtime.

Formerly release things are proceeding according to our ambitious plans. Four other five major pharmacy benefit manager organizations have listed Opsumit, we list in July. All major health plans have listed Opsumit by July 2014. Various market research also indicates that the Opsumit profile perception is already nice differentiated on key efficacy, tolerability and safety parameters supporting growing prescribe adoption. Currently almost thousand physicians have prescribed at least one Opsumit out of the 2004 physicians certified two prescribe Opsumit.

Now let's look at the ex-U.S. launches. Germany launched in early February and the trajectory in the first two months is even stronger than the one in the U.S. Again driven higher volume PAH centers. We assume that we experience in Germany also a similar policy effect like we saw in the U.S. with significant numbers of Tracleer upgrades as well as high initial new era patient market share.

Switzerland which launched in end of February had a very strong first month, very similar to the uptake in Germany with pretty similar patient dynamics. We also launched in Q1 in Canada in the private market only in Austria, with full in reimbursement which is expected to come sometimes in Q3. We also launched in Denmark in Norway and in all these markets with high customers propensity to prescribe Opsumit. Following a positive reimbursement decision in Scotland and Wales and we expect listing of the Opsumit in the English PAH commission of guidelines we plan to start fully commercializing in the U.K. in May. As you might recall we started promoting Opsumit in the U.K. already in February 2014. Ireland we will launch in April followed by Netherlands in May.

So in summary, the diverse Opsumit launch is so far have one thing in common. They all go very well. By the end of Q1 we had a total of over 2003 patients treated with Opsumit, a pretty satisfying uptake in chronic market like PAH and in the market with multi records of slow uptake for new products entering this market. So let's move on with Tracleer.

Tracleer phase III reached CHF 383 million in Q1, up 7% in local currency, top line was positively impacted by US rebate reversals and various 2013/2014 price increases. However, despite declining union sales in market where Opsumit has been launched most notably in the U.S. overall on a global scale, units grew 3% due to strong performance in Japan and the ulcer indication in Europe specially in Italy and Germany.

Tracleer sales were, or the Tracleer growth was also driven by strong sales in PAH emerging markets where for example in Russia and China the markets respond very well through our incremental feed force investments which accelerated gross momentum. I am also pleased to report for the second time Tracleer did not on the lower price decreased for March first during the bi-annual and pricing bidding process in Japan. Also (indiscernible) the branded generic version of commercialized by the markets of Netherlands will be ready to be launched in the few European markets facing generic complications to Tracleer.

So Veletri, our epoprostenol presentation is an important asset to fully cover the continuum of KMPH and becoming as asset with global sales of CHF 15 million, 134% growth versus previous year in local currency. Major drive of this accelerated trajectory is the very successful launch in Japan in June 2013 together with launches in other markets like Canada, Spain, Switzerland, Netherlands, U.K., and the Czech Republic. More markets will follow over the next 12 months.

In Japan by March 1st, we have to accept the price cut for Veletri which together with some other March impression due to the competition will result in an approximately 18% lower net price going forward. In the U.S. Veletri is continuing to gain grounds versus Flolan and let's move now to the force products in our PAH portfolio, where Phase reached CHF 28 million , 5% growth versus previous year local currency solidly driven by reversal of U.S. Medicaid rebates of CHF 2.9 million and the multiple price increases I mentioned before.

Unit sales continued to erode due to the competition by (indiscernible) and this will not change for the balance of 2014 and we even need to see the impact of oral which will be obviously positioned versus inhaled Prostacyclin. We are also now ready to defend against the potential generic entry which could enter the market later in 2014 or early 2015.

Now let's take a brief look at our specialty portfolio beyond PAH. Zavesca delivered sales of CHF 26 million, a very solid 16% growth versus previous years in local currency. Sales continued to be driven by the Niemann-Pick C indication outside the U.S. and new markets like Japan where the products has been launched last year. Overall the GD1 patients base is relatively stable supported by the significant business in Brazil. In the US Zavesca business growth is driven by price.

Last but not least, our latest addition to the portfolio Valchlor which reported sales of around CHF one million in Q1. Valchlor and the indication is described in the first bullet, has been launched in November with a small team to the 63 CTLC centers respectively to the 120 top prescribers. Followed now by the launch in mid March with the full dedicated sales force to the 8002 potential prescribers. The propensity used in the product is high. However, despite around 2008 patients from the active ingredients treated with compounded presentations today this is a market being exercised not only from a disease managements perspective but also managing all dimensions of the patients journey form diagnosis to prescription over fulfillment with reimbursed product active enrollment into program. So here we need a bit of patience. For Europe we are evaluating the opportunity and the appropriate commercial strategies.

So let me conclude my commercial perspective with four take home messages. First very solid commercial performance in Q1 even excluding some special effects like the extraordinary Medicaid managed Medicaid rebate reversals in the U.S. Secondly the Opsumit launch goes very well. Opsumit initial launched dynamic in the U.S. also seen in new markets like Germany and Switzerland validating our commercial strategy. Thirdly Veletri launch is continue to do very well more markets bigger markets like France, Spain and Italy to come. And fourth, Valchlor, we had the first successful entry step into the CTLC market and we need to keep the product and the people involved as bit of time. And with that I pass on to André. André please.

André C. Muller

Thank you Otto. Good afternoon or good morning ladies and gentlemen and thank you for joining us today. Let me start with the quick look at the highlights. As Jean-Paul mentioned 2014 is off to a very good start. Product sales amounted to CHF 469 million, a 13% increase in local currencies or 9% increase excluding the reversal of rebates related to prior year Medicaid managed care Medicaid accruals. Core earnings amounted to CHF 189 million, a 19% increase on local currency basis and another 9% increase excluding the impact of reversal rebates. This profitable growth of our business is also reflected in our operating income that amounted to CHF 153 million. Fully diluted core earnings per share for the first quarter of 2014 amounted to CHF 146 compared to CHF 1.23 for the same period of last year. A full reconciliation of U.S. GAAP numbers to core performance can be found on our website.

Here you can see how the first quarter 2014 core earnings of CHF 189 million came about. Core earnings increased by 90% in local currency mainly driven by high product sale to CHF 469 million. Core research and development expenses at CHF 82 million were 4% higher at local currency. Our clinical expenditure increase slightly. Core SG&A at CHF 147 million was up 14% at constant exchange rate main driver for the increase of the product launches if Opsumit and Veletri around the globe as Otto outlined earlier.

For documentation purposes, here is the reconciliation from core earnings to U.S. GAAP operating income. Allow me to highlight just a few details of general relevance. Good cash collection is continuing specially in Spain and Greece allowing to reverse CHF 1 million of doubtful debts provisions. DSO, days of sales outstanding at the end of March was 71 days an all time low for Actelion down six days from the end of last year.

Depreciation and amortization amounted to CHF 25 million an increase of CHF 6 million mainly driven by the amortization on the Valchlor intangible assets applied through the direct acquisition in September 2013.

Now moving to U.S. GAAP numbers. The main driver for the increase in operating income to CHF 163 million was clearly the increased gross margin as well as the impacts of the Medicaid and managed Medicaid reversals of CHF 16.5 million. Operating expenses were CHF 12 million higher than in the third quarter of last year. Also you can clearly see the CHF 12 million reserve currency impact mainly driven by a weaker Japanese Yen and US dollar against Swiss Franc.

Now moving on to U.S. GAAP net income. Company reported net income of CHF 128 million an increase of 40% in local currencies. Financial results includes the interest expense of CHF 10 million relating to the litigation, CHF 3 million interests on the 235 million straight bond as well as some currency hedging and other interest income. Tax expense for the first three months was CHF 15 million which translates into a tax rate of 10.4%. The final payment resulted in the tax loss in our U.S. affiliate that offsets and will continue for a while to offset taxation in our main affiliate in the U.S.

Now moving on to earnings per share, basic earnings per share increased by 42% in local currency to CHF 1.15 mainly driven by the good operating performance and a lower share count due to the first and second line share buybacks. Fully diluted earnings per share increased by 38% in local currency to CHF 1.09 despite a high number of shares in calculation. The reason for stock price appreciation has resulted in a high number of stock options taken into the calculation of now all inter money.

Let’s have a look at cash flows now. We started the year with unrestricted growth cash position of CHF 878 million. Cash from operations excluding as impact continues to be strong at CHF 96 million. The release of CHF 609 million of the bail bond related to the case enables the company to make a final payment of CHF 458 million to (indiscernible) and to increase our unrestricted cash position for the remainder i.e. CHF 151 million. We continue to return cash through our shareholders with CHF 272 million as we vote back almost 3.1 million shares on the first line to mitigate delusion from employees stock compensation plans.

Cash from options exercises continues to be high at CHF 116 million as employees took advantage of the high share price to cash in their option. All these resulted in unrestricted gross cash position of CHF 966 million at the end of the first quarter. Taking into accounts the CHF 235 million straight bond, our unrestricted net cash position at the end of the first quarter is CHF 731 million. Despite the disappointing outcome of the litigation, so good Q1 one numbers actually did demonstrate that we retain full financial flexibility. Our good profitability and operating cash flow as well as our strong balance sheet should allow us to act on any opportunities that may occur in the future. So looking at the reminder of the year, I am confident that the company will be able to review guidance by midyear. For now we are maintaining mid single digit core earnings gross from the higher 2013 base. We are also expecting to return to single digit growth in 2016 from this high 2014 base.

Thank you for your attention and I hand over to Roland.

Roland Haefeli

Thank you very much Andre and just for completeness sake, I’m sorry we had a little problem in the speech I think we maintained low single digit increase compared to a higher 2013 base. So that goes on me. Sorry for that. If we look at time it is 2:35 here in (Basal) and we would have approximately 15 minutes to answer your questions. Conference call operator, if I may ask to open the lines for people who identify themselves with name and affiliation and are so concentrated and diligent to ask one question only and then go back into the line to facilitate us to be able to address them straight forward. Thank you.

Question-and-Answer Session

Operator

Thank you. We have our first question. The first question comes from Guillaume Van Renterghem – UBS. Your line is now open.

Guillaume Van Renterghem – UBS

Hi, well done on the results so. I am definitely going to stick to one basically the long one. Maybe a question for Otto. With regards to the tearing of Opsumit, this is a tearing of Tracleer, I looked at the roughly 8000 health care plan on the exchange in the U.S. and I see that Tracleer roughly two third of the plans operate as tier 2 and 12% as tier 3 and when I look at the Opsumit plans, which currently refer Opsumit roughly I mean if you 22% operate as tier 2 and 61% as tier 3. So, I mean I just see the exchange not the non-exchange plan so I was just wondering whether you can confirm or comment as to whether we see a difference in tearing between Tracleer and Opsumit in real life?

Otto Schwarz

Ultimately no, because the objective is and that would be achieved, the least thing is kind of finally negotiated in principle the position of Opsumit is equal to Tracleer.

Roland Haefeli

Thank you. Otto I think that was very straight forward. Next question please.

Operator

The next question comes from James Gordon – JPMorgan, your line is now open.

James Gordon – JPMorgan

Hello, thanks for taking my question James Gordon from JPMorgan. I had a couple but I will just one for now which was Selexipag. What should we expect in terms of an achievable six minute distance benefit in that is the inhalable Prostacyclin and then we can look at Ventavis is like 40 meters should we look at all module ended or should we look at what you showed in Phase II which I think is about 24 meter benefit and the phase II there were less patients on background therapies so there might have been an easier population to show a six minute benefit?

Otto Schwarz

Yes, James I think the first point actually this is more be on a mortality study and maybe Jean-Paul you want to try over the things.

Jean-Paul Clozel

It's very important, this thrive is not designed for evaluating walk distance. It's the – the main point is mobility mortality so I think that you know I don't think we should speculate and take any conclusion about the walk test which would not be measuring the same conditions and not be comparable to any other tribes and made before.

James Gordon – JPMorgan

Thank you. I will get in the queue for another question.

Roland Haefeli

Thank you very much. Next question please.

Operator

The next question comes from Richard Parkes from Deutsche Bank. Your line is now open.

Richard Parkes - Deutsche Bank

Hi, thanks for taking my question. It's Richard Parkes from Deutsche Bank. I have got actually one request and then one question. So I am hoping that Otto can repeat the numbers that he gave with regard the speed which patients were moving from being onto reimbursement and then the proportion of patients that would be in system program longer terms. I just didn’t get chance to type those notes. And then I suppose just one simple one. I am wondering if you can give us some kind of sense as to what proportion of the 2003 patients on treatment at the end of March were previously treatment naïve versus switches or Tracleer upgrades?

Otto Schwarz

So just on the patients moving on to commercial drug, I think it's very important. So of the patients who get the second shipments again, of the patients who get the second shipments 75% to 80% of the patients are in commercial drug and of the patients who get the third shipment it’s the same percentage. What you have to however think consider that there is discontinuation from patients moving through shipments. So not all patients who get the first shipments get the second shipment which is the dynamic of the disease. It has nothing to do with Opsumit. It's the way how patients move through the disease continuum. So for those of you who then later refer to the transcript it is on the slide 11 that the numbers will be found and I am very hesitant to give – I think I gave you in off screen, on the dynamics and I would not like to speculate on the 2300, actually they also -- between Europe and the U.S. and you know these dynamics are kind of changing over time but there is a significant portion of patients which are Tracleer upgrades.

Richard Parkes - Deutsche Bank

Okay. Great. Thank you.

Roland Haefeli

Thank you very much. Next question please.

Operator

The next question comes from (indiscernible) from Barclays, your line is now open.

Unidentified Analyst

Thank you. My main question has just been answered so my second on Ventavis just you commented that you are ready to send Ventavis if and when is a generic entry I was wondering if you could elaborate on what you have got in mind. Thank you.

Otto Schwarz

Now, we are going to disclose now our strategy because for patient competitors might pick that up. But we already we know that there is one filing and we don't know when it’s going to be approved. But we have everything in place to be – to wait for them when they come and we are going to be there before they come.

Unidentified Analyst

Thank you.

Roland Haefeli

Thank you. I can't say more sorry. He is itching to tell more, he knows he can't. Thank you Michael next question please.

Operator

Thank you. The next question comes from Sachin Jain, Bank of America. Your line is now open.

Sachin Jain – Bank of America

Hi, Sachin Jain from Bank of America. On U.S. Tracleer volumes I wonder if you could quantify the volume decline in the quarter on new patients stats were down 70% and on (indiscernible) you said the switch rates were less pronounced. I wonder if you can give any numerical color around that. Thank you.

Otto Schwarz

Yeah, Sachin the second part of your question was cut off and I was like could you just, first part you asked about U.S. Tracleer volume decline and the second part was?

Sachin Jain – Bank of America

(Indiscernible) switch rates less pronounced any numerical color to that.

Otto Schwarz

Number one, on the -- first one was Tracleer volume decline. There is a significant volume decline Tracleer in the U.S.. I don't want to give you now any specific number but it is a significant decline which is the reflection also of the Opsumit uptake. So this is because of switch rate because of the erosion of the new patient market share for Tracleer, so this is kind of what we actually want to see. And on the switches there are few upgrades on the overall size of the (Indiscernible) business. that’s not going to be a very significant number. It's nice for us now where we are but it's not the significant number given the overall (indiscernible) business today. I am talking about upgrades.

Sachin Jain – Bank of America

Thank you.

Roland Haefeli

Thank you. Next question please.

Operator

Thank you. The next question comes from Ravi Mehrotra - Credit Suisse. Please go ahead.

Ravi Mehrotra - Credit Suisse

Hi, thanks for taking my question which I am reasonably sure Otto will answer, but I will give a go. Can you just, I think let’s go back to the Opsumit launch in the U.S. can you just simply give us market – new prescription market share for Opsumit with the ARA market?

Otto Schwarz

I think I have said that we – you know, I think we kind of – we are over the half mark but we are not where we want to be yet. Yet is very important.

Ravi Mehrotra - Credit Suisse

Presuming what you want to be is 100% NRS?

Otto Schwarz

Yeah that's unachievable but – that’s unachievable but kind of close as possible. Because the product deserves it and the patient deserve it.

Ravi Mehrotra - Credit Suisse

Okay. Thank you.

Roland Haefeli

Thank you Ravi. And that was the long answer. Next question please.

Operator

The next question comes from Peter Welford – Jefferies please go ahead sir.

Peter Welford – Jefferies

Hi, and thanks for taking my question. I am just select by the group and trial and give us some sort of visibility on what do you plan to disclose when we have headline announcement. Should we anticipate a very similar start of release to the Opsumit trial and you don't seem -- some of the details in that? I guess particularly as far as when you what sort of detail you think you will give potentially about dosing and the patients more dose they achieved. And then, can I ask a point of clarification which is what was the rebate reversal you said. I missed you short to section on Ventavis, 18 million in total but how much about is due to Ventavis?

Otto Schwarz

Good point. So I will take the first question first of all and I will – we take out the calculate this, so we have the number already? 2.3 million.

Peter Welford – Jefferies

That's great. Thank you.

Otto Schwarz

I will tell you really short to-- a little bit. Sorry, my English is still and also in English, so in terms of what you should expect on the press release indeed the study should be statistically significant it would be press release relatively similar to the Opsumit release that we did at that time it was called (indiscernible) study please understand this is a huge study. We are talking about 1,150 patients exposed to either placebo or Selexipag on the on top of all of therapies either PD5 or VRA or both. So this is a highly complex study and we will naturally focus on whether or not the primary end point has been achieved. I am not putting anything else out there already other than to tell you focus will be on the primary end point. We will give you whatever we can give you with high certainty we will try to give you data as soon as possible as we have broken the codes, actually limit of the disclosure and it is that's as far as we can go.

André C. Muller

And I think also we need to preserve presentation to scientific committee so we cannot disclose more than we are allowed to disclose without putting into danger the authorization to show the data to the scientific committee. That's scientific limitation there.

Peter Welford – Jefferies

Okay, great.

Roland Haefeli

Do we have any questions left?

Operator

There is one more question. The next question comes from Guillaume Van Renterghem – UBS. Please go ahead sir.

Guillaume Van Renterghem – UBS

Yeah hi. Just quick follow up on the market penetration. So if we look at your 2003 patients plus, if you take the entire ERA market, number of patients currently treated these 2003 patients, what percentage is that, 5% of the market you would say?

Otto Schwarz

I think, you need to really split that between the US and Europe –

Guillaume Van Renterghem – UBS

No, no. Total market. Out of the total market ---

Otto Schwarz

Total market you know there is around you know, total might be 55,000 patients, yeah but that includes Japan, that includes everything here.

Guillaume Van Renterghem – UBS

Yeah. So that means the U.S. you are close to already having reached what 10% of the market – of the ERA market?

Otto Schwarz

You are talking about, no, no. Very good try Guill, the overall, the overall share at this point in time I think it's the important, is the absolute numbers we have achieved in the source of the business which is important because and you need to see that really in relation to what has been achieved and can be achieved in the chronic market and what has been achieved in this market by other therapies coming in. this is the pretty decent uptake.

Guillaume Van Renterghem – UBS

I don’t doubt it. Thank you for your confidence.

Roland Haefeli

Great. Thank you very much. Good hunting and we are ringing already the bells on those bunnies that are in front of us that are chocolate and we are now going to have a sugar high, thank you very much for your continued interest in Actelion. It has been as always for the last 13 years true pleasure to moderate these sessions. Thank you very much and with this conference call operator we can disconnect and we will be back hopefully within a few weeks with the Selexipag top-line. Bye-bye.

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