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April 7th, 2006

2005 Annual Report Released


After two years of consolidation, 2005 saw a 22% increase in sales. Reaching EUR 421 million in sales, together with a positive cash flow of EUR 80 million, was a milestone achievement which allowed the Group to invest heavily in both Research & Development and our manufacturing plants as well as enhancing our solid financial standing.

In 2005, the operating margin and the return on net assets have approached our long term goal of 20%. At the close of 2005, Octapharma had, on a balance sheet of EUR 419 million, an equity ratio exceeding 66%. Octapharma is now in an excellent position to further invest in the future.

The launch of two new state-of-the-art products in Europe: Wilate (Von Willebrand Factor/FVIII-concentrate) and Octaplex (prothrombin complex concentrate) contributed to a successful year for the company in 2005. Furthermore, our US subsidiary achieved impressive sales of approximately US$100 million – a significant increase over 2004, chiefly through sales of our star product, Octagam (a liquid ready-to-use gammaglobulin for the treatment of disorders of the immune system). Also considered major achievements was the clinical development of Wilate, the filing of albumin and obtaining orphan drug status for Uniplas in the US.

Improved access to our products in the global marketplace is the result of combined efforts of every facet and level of the Octapharma organisation. Our Research & Development department delivered the technical results, and our Regulatory department effectively computed the documentation and achieved wider access through working with European authorities and overseas bodies such as the FDA. The consequent increase in demand for products in 2005 was handled smoothly by the Production department.

The outlook for 2006 is very promising. Octapharma expects further significant growth both inside and outside Europe. In this respect, there are especially high expectations for Octanate, Octapharma's von Willebrand stabilised Factor VIII concentrate, in the prevention and treatment of inhibitors. This expectation is due to an increasing awareness that the current, costly array of recombinant products on the market offer no clinical benefits over plasma-derived products.

The Asian market continues to be of growing global importance. Octapharma has great expectations for continuous growth in China, and therefore, has recently established a representative office in Beijing in March 2006.

Octapharma's enhanced collaboration with the NSTOB fractionation plant in Springe, Germany, resulting in a long-term lease of the plant in 2005, combined with an upgrading of our plants in Stockholm and Lingolsheim and the commissioning of a new high-tech filling line in Vienna, will significantly increase Octapharma’s production throughout 2006.

In 1995, 95% of Octapharma’s sales were made within Europe. Now, the European market accounts for only 63% of sales. Taking into consideration our continuous clinical and regulatory strategy for the US and other non-European markets, it is expected that European sales will represent less than 50% of total sales within the next three years, evidence of the company’s expanding reach.

Please visit the financial page to download the annual report or request a hard copy.


© Octapharma AG, 2006