In a well-received set of quarterly results, Orexo AB ADR (OTC:ORXOY) continued to execute on Zubsolv in the US, which, for the second quarter running, continued to be the only branded product in the category that increased its market share in the face of multiple generics. Zubsolv US revenues of SEK158.4m grew by 27.6% y-o-y, driving total revenues to SEK200m. EBITDA of SEK50.6m, cash flow from operations of SEK39m and a gross cash balance of SEK494.8m made Q218 one of Orexo’s best ever quarters.
Zubsolv keeps on gaining market share
As Orexo’s biggest product, Zubsolv’s US sales largely dictate Orexo’s quarterly performance and Q218 was a knock-out quarter for Zubsolv. Total net revenues were SEK199.7m up 25.5% y-o-y and driven by Zubsolv US revenues of SEK158.4m (up 27.6% y-o-y in SEK terms, or 29.8% in local currencies) including a $1.4m prior period revenue adjustment. We had already included the €3m milestone from Mundipharma for the EU launch of Zubsolv (royalties have not yet been recorded for the last quarter) in our model, but this, in addition to a further quarter of cash generation, resulted in a gross cash balance of SEK494.8m (SEK294.3m at end H117). Orexo’s minor product royalty streams did not materially affect its profitability, although the SEK11.9m from Abstral was nearly double our quarterly estimate of SEK6.1m.
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