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SPEEDEL reports higher Q1 earnings
Contribution from cost-of-goods savings exceeds expectations
The royalty report from Novartis includes details on the royalties due to Speedel from Novartis' reported net sales of USD 28 million for SPP100/Aliskiren in the U.S., Europe and in other countries. This report also includes details on the cost-of-goods savings which Novartis has achieved for product sold during the first quarter, using the chemical synthesis route developed by Speedel and licensed to Novartis in 2002. A further increased proportion of the product sold by Novartis in the first quarter was reported to be eligible for the savings on cost-of-goods stipulated in the licensing agreement.
Of the royalties due to Speedel on sales of SPP100/Aliskiren, the majority arise from sales of Tekturna/Rasilez as a single product pill. However, in January 2008, when Novartis launched Tekturna HCT as a single tablet combination with the diuretic HCT in the U.S., Speedel also became eligible for royalties on this 'combo' product as the licence contract clearly stipulates. The royalties that Novartis have reported as being due to Speedel on sales of Tekturna HCT are lower than Speedel believes to be a fair consideration and discussions are continuing to resolve this disagreement.
Alice Huxley, CEO, stated: "We are glad that the cost-of-goods savings arising from Novartis' use of the manufacturing process developed by Speedel for SPP100 are making a growing contribution to our revenues. It is encouraging to see the first fruits of our major technical breakthrough which enabled the first renin inhibitor to come to market.
Unfortunately we also have a disagreement with Novartis. The issue at stake is the level of royalty revenues that we should be receiving from sales of the combination or 'combo' drug Tekturna + Diuretic HCT for which Novartis received U.S. marketing approval from the FDA in January of this year. While the U.S. prescriptions for Tekturna HCT in Q1 are rather small we expect them to grow over time so this is an issue that we will need to resolve for the future."
Financial Calendar 2008
Q2 2008 - 4 September 2008 (changed from 19 August 2008)
Q3 2008 - 4 December 2008 (changed from 14 November 2008)
Forward looking statements
This press release includes forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are based on our current expectations and projections about future events. All statements, other than statements of historical facts, regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The word "may" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations described in these forward-looking statements and you should not place undue reliance on them. There can be no assurance that actual results of our research and development activities and our results of operations will not differ materially from these expectations. Factors that could cause actual results to differ from expectations include, among others: our or our partners' ability to develop safe and efficacious products; our or our partners' ability to achieve positive results in clinical trials; our or our partners' ability to obtain marketing approval and market acceptance for our product candidates; our ability to enter into future collaboration and licensing agreements; the impact of competition and technological change; existing and future regulations affecting our business; changes in governmental oversight of pharmaceutical product development; the future scope of our patent coverage or that of third parties; the effects of any future litigation; general economic and business conditions, both internationally and within our industry, including exchange rate variations; and our future financing plans.
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