Ladies and Gentlemen,
In May 2016, we informed you that the original target date for the division of the Group would be postponed by six to twelve months to 2017. Our decision was based on extremely positive developments that materialised more quickly than envisaged, and with greater benefit. This pleasing situation motivated the Board of Directors to adopt measures that would allow the Group to take full advantage of this promising momentum.
In recent months, Vifor Pharma has become increasingly dynamic, particularly
with regard to Ferinject® (+45.7%), which has registered strong growth in all major markets, especially the important US market (+102.2%). This performance reinforces our strategy of focusing on the core indications of nephrology, cardiology and gastroenterology. In addition, a number of new partnerships have been established: following its successful launch in the USA in mid-2015, Mircera® (licensed by Roche) contributed sales of CHF 153.2 million in the first half of 2016 alone, while the new partnerships with US companies Relypsa and OPKO Health, as well as Pfizer company Hospira, are also set to positively influence future development.
These partnerships demonstrate that Vifor Pharma is much more than a pharma product company – it stands for a culture that generates value over and above its products. Partnerships with large, international, market-leading companies such as Fresenius Medical Care, Roche, Pfizer and Daiichi Sankyo are a central pillar in its strategy.
To further build on these defining relationships and optimally exploit positive growth momentum in the future, the Board of Directors has decided to strengthen Vifor Pharma management with a new, more experienced CEO. Until this appointment is made, Vifor Pharma will be led on an interim basis by Vice-CEO Gianni Zampieri, who has played a major role within the Galenica Group for 20 years. Søren Tulstrup has left the company, and the Board of Directors would like to take this opportunity to thank him once again for his commitment. We will inform you of his successor in due course.
The pleasing results of Galenica Santé in the first half of 2016 show how the organisation is capable of tapping its potential with the three Business sectors Products & Brands, Retail and Services.
Newly created in mid-2015, the Products & Brands Business sector has developed into a fully integrated and established unit. One initial major success is the agreement with Pierre Fabre, the second largest dermo-cosmetics laboratory in the world, to exclusively distribute A-Derma products in Switzerland.
The Retail pharmacy formats Amavita, Sun Store and Coop Vitality are differentiating themselves in the market with new and expanded services. At the same time, efficiency is being continually enhanced: by mid-2017, for instance, the two GaleniCare Management headquarters in St-Sulpice and Bern are set to be consolidated at a common site in Bern.
Services will be able to strengthen its position in the dispensing doctors segment with the planned acquisition of Pharmapool, and is already ideally equipped to handle larger volumes, thanks to expansion in Niederbipp and the new, expanded Medifilm facilities.
Due to the management change at Vifor Pharma, the planned division of the Galenica Group should be effected by the end of 2017 at the latest. This means that our plans continue to aim for the earlier end of the originally planned timeframe of 2017 to end of 2019.
In July 2016, we announced the planned acquisition of the US company Relypsa. This marks a decisive strategic step which strengthens Vifor Pharma and which is just as important as the Aspreva acquisition in 2008 and the creation of VFMCRP in 2010.
The Acquisition of Relypsa concretise the commitment of Galenica Board of Directors to separate the Group. The tender offer at a price of USD 32.00 per share in cash was launched in early August, the total investments amounts to approximately USD 1.53 billion. We plan to refinance a portion of the bridge loan through equity proceeds to be raised in conjunction with the envisaged division of the Group in the course of 2017, either through an IPO of Galenica Santé or through another option such as an equity increase.
The Galenica Group is currently undergoing the largest transformation process in
its history, calling for even more commitment and a high degree of flexibility from
us all. Our excellent results in the first half of 2016 demonstrate the high degree to which employees identify with our company, as well as their tireless commitment to peak performance. They deserve a huge thank you!
Bern, 9 August 2016