A satisfactory year with significant investments

Ballerup, Denmark, 5 April 2016  “2015 was a satisfactory year for LEO Pharma,” says President and CEO Gitte Aabo. “We have strengthened our ability to help patients with skin diseases all over the world through new treatment solutions, major acquisitions, new partnerships, and investments in patient-focused initiatives. We have also significantly changed our organisation.”

Net sales increased to an all-time high of MDKK 8,457 against MDKK 7,973 in 2014, corresponding to 6% growth, despite challenging market conditions. Sales were positively impacted by the USD exchange rate, and in local currency growth was 0.5%. Sales were influenced by generic competition in US following the loss of exclusivity on Taclonex® Ointment and lower than expected sales of Picato®. Sales in several markets, such as China and France, developed positively.

Operating profit (EBIT) was MDKK 695, a decrease against MDKK 762 in 2014, because of major investments in partnerships and operations. Net profit was MDKK 645 against MDKK 1,544 in 2014, due to a decrease in financial income as a result of volatility in financial markets.

‘Helping SARAH’ – LEO Pharma’s new, transformational strategy

2015 marked the beginning of a major transition in LEO Pharma. With the launch of the strategy „Helping SARAH – LEO towards 2020‟ in December 2014, LEO Pharma has set out on a transformational journey to help people all over the world achieve healthy skin.

As part of the strategy, LEO Pharma entered into an agreement to acquire the portfolio of dermatology solutions from Astellas Pharma Inc. The transaction, the largest in LEO Pharma's more than 100-year history, was closed on 1 April 2016. As a result of the acquisition, LEO Pharma has increased its strategic goal of helping people from more than 70 million to more than 100 million people in 2020.

Another important milestone in 2015 was the US FDA approval of Enstilar®, a novel foam treatment for psoriasis vulgaris and the latest addition to LEO Pharma's treatment offering. Enstilar® became available for patients in the US at the beginning of 2016 and received scientific approval in the EU last month.

Also, LEO Innovation Lab was established. LEO Innovation Lab develops solutions to support people with psoriasis, focusing on all aspects of daily life. With clear success criteria but no immediate profit requirements, LEO Innovation Lab reflects LEO Pharma's strong focus on patient needs.

In addition, LEO Pharma made significant changes in management and governance. Lars Olsen was appointed new Chairman of the LEO Foundation and Jukka Pertola was appointed new Chairman of LEO Pharma A/S. A new Global Leadership Team has been established, along with a major reorganisation of the company.

“We have invested significantly in our future during 2015,” says Gitte Aabo. “Going forward, we will continue our investments, while also increasing our focus on efficiency and optimisation. I am confident that we will continue to strengthen our position in dermatology and achieve our strategic goal of helping more than 100 million people in 2020.”

Expectations for 2016

LEO Pharma expects to increase revenue further in 2016, driven among other things by the launch of Enstilar®. In addition, the acquisition of the dermatology portfolio from Astellas Pharma Inc. is expected to have a positive impact on revenue. EBIT margin is expected to decrease due to depreciation of the acquisition.