During the 2007/08 business year, Ypsomed was able to conclude two similarly important licensing agreements and, for the first time, achieved CHF 2.3 million in licensing revenues. In May 2007, a non-exclusive licensing agreement was signed with a worldwide pharma group and, in September 2007, another contract was concluded with Cilag International, both in the field of autoinjectors. In addition, Ypsomed brought three new pen systems to market that were successfully launched in the 2007/08 business year (Symlin™ pen for Amylin, Nutropin® pen for Genentech and Ypsomed’s own Ypsopen® in Germany).
Technology platforms lead to numerous customer projects
In the 2007/08 business year, Ypsomed invested an above average of CHF 31.2 million in research and development, roughly 10.8% of total revenues. In total, CHF 9.6 million were invested in the development of the own products continuous injection device and safety pen needles and capitalized in the balance sheet in accordance with IFRS regulations, while CHF 21.6 million of research and development costs were charged directly to the profit and loss statement.
Payments from client-specific projects rose 80% from CHF 3.5 million to CHF 6.4 million. Ypsomed enjoys the trust of its customers, as the excellent results in customer audits demonstrate. Overall, numerous new contracts were closed, which allowed Ypsomed to further enhance its leadership position in innovation in the 2007/08 business year, and which will create growth impulse for Ypsomed in about two years from a broader customer base.
Sanofi-Aventis and Ypsomed strengthen their collaboration
Ypsomed’s extensive and strong patents have been a decisive factor in enabling pending legal proceedings to be resolved amicably, and to sign new, important contracts with the main customer, Sanofi-Aventis. These contracts include a licensing agreement for the non-exclusive use of Ypsomed’s rights, a new production and delivery contract for a significant portion of the SoloStar® pens that Sanofi-Aventis uses, a collaboration contract in the field of pen needles, as well as the extended and adjusted production contracts for OptiClik® and OptiSet®. With these contracts, Ypsomed remains a principal supplier to Sanofi-Aventis for a large number of high quality pen systems for administering Lantus®, Apidra®, and other insulins worldwide.
Confident about the future
With injection systems and pen needles for self-medication, as well as with its diabetes direct business, Ypsomed is active in numerous growth markets, because the worldwide demographic development and the social change, in terms of our way of life, give rise to an increasing number of patients whose quality of life Ypsomed can improve significantly through its products.
Chairman, Dr. h.c. Willy Michel, is very pleased: “Ypsomed has excellent mid to long-term growth prospects, which we can take advantage of based on our success factors. With the know-how of our employees, with patent protected innovations, and a broad portfolio of products and services, we will be able to expand our customer base significantly in the next two years, diversify our total revenue basis, and further increase profitability, thanks to sensible cost management.”
CEO Richard Fritschi added: “We will benefit from the expansion of the pen needle production in Solothurn most noticeably in the second half of our 2008/09 business year. The new agreement with Sanofi-Aventis for the production of the SoloStar pen system will show positive effects in approximately 18 to 24 months, after completion of the required industrialization and set-up phases.”
Due to reduced order volumes from Sanofi-Aventis for the existing pen systems OptiPen Pro, OptiSet and OptiClik, Ypsomed expects sales in the business year 2008/09 to reach the level of last year’s, as well as an overall slight improvement of EBIT margins, depending on product mix and royalties. Ypsomed will continue to invest in research and development, along with the strategically important continuous injection device. For the 2008/09 business year, Ypsomed is planning investments of CHF 35 to CHF 40 million in fixed assets.
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