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First half-year 2009: performance ahead of expectations

Net profit up 11%, Strong research and investment effort, Positive net financial position, Annual growth guidance maintained at 10%

The Board of Directors, meeting on 25 August 2009 under the chairmanship of Albert Saporta approved the 2009 half year financial statements:

Sales growth and financial position

In spite of the unfavourable economic background, sales were maintained at a high level (up 12% - 11% organic, excluding foreign exchange effect), due to the continuing growth of sublingual treatments.  The launch of ORALAIR®, which started at the end of 2008 in Germany, has confirmed its commercial success.

Selling, general and administrative expenses posted a moderate 8% increase, substantially offset by the growth in sales.  The 29% increase in net R&D costs highlighted the continued dynamic development of allergen tablets.  In this context, operating profit grew by 7% to € 19.6 million.  Due to good control of financial expenses, net profit increased by 11% to € 13.4 million.  Diluted earnings per share amounted to € 1.01.

EBITDA grew by 12% to € 24.1 million.  Against a background of sustained investments, free cash flow rose by 45% to a positive € 14.5 million, particularly due to a reduction in working capital requirements.  For the first time in 10 years, the net financial position was a positive € 1.3 million.

The half-year financial report can be downloaded from the corporate website: http://www.stallergenes.com/ 

Significant recent transactions and events

The mutual recognition procedure for Oralair® (grass pollen desensitization tablet) started at an operational level in the second quarter and should lead to registration in most European countries by the end of 2009.

The phase IIb/III clinical study on the dust mite desensitization tablet for adult rhinitis proved positive and will support a European registration process.  This study is a world first in dust mite immunotherapy, both in terms of its scale and the quality of its results.

Outlook for 2009

The 2009 sales growth guidance remains set at 10%.  This level of growth should ensure operating profit remains at a level equivalent to 2008, against a background of increased R&D investments.  Investments will remain at a high level, without calling into question the target of maintaining operating profitability above 15% and a positive free cash flow.

Lastly, the second half-year will be marked by a number of significant announcements.  Five major phase II/III clinical study results are expected, of which three, if proving positive, will allow for registration into Oralair® phase III in the US, 3rd year of Oralair® long-term study in Europe and phase III Staloral® study on asthma in China.