Media Release |
|
SERONO
DELIVERS STRONG SECOND QUARTER
RESULTS
-
Excellent Rebif® performance with sales up 26.6%
to $326 million -
|
l
|
Total
revenues up 15.2% to $676.8m (up 12.5% in local currencies) and
product
sales up 13.5% to $611.5m (up 10.9% in local
currencies)
|
l
|
Reported
net income up 32.5% to $175.1m (up 31.5% in local currencies) with
underlying net income* up 13.7% to
$150.3m
|
l
|
Basic
EPS up 41.1% to $12.02 per bearer share and $0.30 per ADS with
underlying
EPS* up 21.1% to $10.32 per bearer share and $0.26 per
ADS
|
l
|
Very
strong Rebif® performance with global sales up 26.6% to $326
million and record US market share (TRx of 19.0% and NRx of
22.8%)
|
l
|
Strategic
alliance with Priority Healthcare in Reproductive Health in the
USA
|
l
|
Mylinax®
in a strong position in the race for the first marketed oral MS
therapy
|
l
|
New
R&D collaborations - PhenoptinTM from BioMarin, HuMax-TAC
from Genmab, anti-CD3 and anti-IFN gamma from
NovImmune
|
l
|
Positive
credit ratings issued by Moody’s: A3 and Standard & Poor’s:
A-
|
Serono
in Geneva, Switzerland:
|
||
Media
Relations:
|
Investor
Relations:
|
|
Tel: +41-22-739
36 00
|
Tel: +41-22-739
36 01
|
|
Fax: +41-22-739
30 85
|
Fax: +41-22-739
30 22
|
|
http://www.serono.com
|
Reuters:
SEO.VX / SRA
|
|
|
Bloomberg:
SEO VX / SRA US
|
|
Serono,
Inc., Rockland, MA
|
||
Media
Relations:
|
Investor
Relations:
|
|
Tel.
+1 781 681 2340
|
Tel.
+1 781 681 2552
|
|
Fax:
+1 781 681 2935
|
Fax:
+1 781 681 2912
|
|
http://www.seronousa.com
|
w
|
Tables
detailing sales in dollars by therapeutic area, geographic region
and the
top 10 products for the 3 and 6 months ended June 30, 2005 and
2004.
|
w
|
Consolidated
statements of income for the 3 and 6 months ended June 30, 2005
and 2004;
the consolidated balance sheets as of June 30, 2005 and December
31, 2004;
the consolidated statements of equity as of June 30, 2005 and 2004;
the
consolidated statements of cash flows for the 6 months ended June
30, 2005
and 2004; the selected explanatory notes to the consolidated financial
statements; and a reconciliation of "adjusted" earnings guidance
to IFRS
earnings guidance for the year ended December 31, 2005. These consolidated
financial statements have been prepared on the basis of International
Financial Reporting Standards.
|
Three
Months Ended
June
30, 2005
|
Three
Month Ended
June
30,2004
|
|||||||||||||||
$
million
|
%
of sales
|
%
change $
|
$
million
|
%
of sales
|
||||||||||||
Neurology
|
331.6
|
54.2
|
%
|
24.4
|
%
|
266.6
|
49.5
|
%
|
||||||||
Reproductive
Health
|
179.8
|
29.4
|
%
|
(0.6
|
%)
|
180.8
|
33.6
|
%
|
||||||||
Growth
& Metabolism
|
71.1
|
1
1
.6
|
%
|
8.1
|
%
|
65.8
|
12.2
|
%
|
||||||||
Dermatology
|
7.4
|
1
.2
|
%
|
4739.2
|
%
|
0.2
|
0.0
|
%
|
||||||||
Others
|
21.6
|
3.6
|
%
|
(14.4
|
%)
|
25.2
|
4.7
|
%
|
||||||||
Total
sales (US$ million)
|
$611.5
|
100
|
%
|
13.5
|
%
|
$538.6
|
100
|
%
|
Three
Months Ended
June
30, 2005
|
Three
Months Ended
June
30, 2004
|
|||||||||||||||
$
million
|
%
of sales
|
%
change $
|
$
million
|
%
of sales
|
||||||||||||
Europe
|
277.6
|
45.4
|
%
|
23.6
|
%
|
224.6
|
41
.7
|
%
|
||||||||
North
America
|
216.6
|
35.4
|
%
|
3.7
|
%
|
208.8
|
38.8
|
%
|
||||||||
Latin
America
|
32.4
|
5.3
|
%
|
12.7
|
%
|
28.7
|
5.3
|
%
|
||||||||
Others
|
84.9
|
13.9
|
%
|
10.9
|
%
|
76.5
|
14.2
|
%
|
||||||||
Total
sales (US$ million)
|
$611.5
|
100
|
%
|
13.5
|
%
|
$538.6
|
100
|
%
|
Six
Months Ended
June
30, 2005
|
Six
Months Ended
June
30, 2004
|
|||||||||||||||
$
million
|
%
of sales
|
%
change $
|
$
million
|
%
of sales
|
||||||||||||
Neurology
|
629.4
|
54.1
|
%
|
18.3
|
%
|
532.1
|
50.4
|
%
|
||||||||
Reproductive
Health
|
345.3
|
29.7
|
%
|
(1
.6
|
%)
|
351.0
|
33.3
|
%
|
||||||||
Growth
& Metabolism
|
137.5
|
1
1
.8
|
%
|
7.4
|
%
|
128.0
|
12.1
|
%
|
||||||||
Dermatology
|
11.8
|
1
.0
|
%
|
41
71 .9
|
%
|
0.3
|
0.0
|
%
|
||||||||
Others
|
38.9
|
3.4
|
%
|
(11.4
|
%)
|
43.9
|
4.2
|
%
|
||||||||
Total
sales (US$ million)
|
$1,162.9
|
100
|
%
|
10.2
|
%
|
$1,055.3
|
100
|
%
|
Six
Months Ended
June
30, 2005
|
Six
Months Ended
June
30,
2004
|
|||||||||||||||
$
million
|
%
of sales
|
%
change $
|
$
million
|
%
of sales
|
||||||||||||
Europe
|
542.5
|
46.6
|
%
|
17.0
|
%
|
463.5
|
43.9
|
%
|
||||||||
North
America
|
401.4
|
34.5
|
%
|
3.1
|
%
|
389.3
|
36.9
|
%
|
||||||||
Latin
America
|
61.9
|
5.3
|
%
|
12.4
|
%
|
55.1
|
5.2
|
%
|
||||||||
Others
|
157.1
|
13.6
|
%
|
6.6
|
%
|
147.4
|
14.0
|
%
|
||||||||
Total
sales (US$ million)
|
$1,162.9
|
100
|
%
|
10.2
|
%
|
$1,055.3
|
100
|
%
|
Three
Months
Ended
June
30, 2005
|
Three
Months
Ended
June
30,
2004
|
|||||
*TA
|
$
million
|
%
of sales
|
%
change $
|
$
million
|
%
of sales
|
|
Rebif®
|
MS
|
326.0
|
53.3%
|
26.6%
|
257.5
|
47.8%
|
Gonal-f®
|
RH
|
149.9
|
24.5%
|
(0.7%)
|
150.9
|
28.0%
|
Saizen®
|
Growth
|
53.6
|
8.8%
|
21.2%
|
44.2
|
8.2%
|
Novantrone®
|
MS/Oncology
|
18.3
|
3.0%
|
(22.4%)
|
23.6
|
4.4%
|
Serostim®
|
Wasting
|
17.3
|
2.8%
|
(19.5%)
|
21.5
|
4.0%
|
Raptiva®
|
Dermatology
|
7.4
|
1.2%
|
4739.2%
|
0.2
|
0.0%
|
Crinone®
|
RH
|
6.5
|
1.1%
|
43.3%
|
4.5
|
0.8%
|
Ovidrel®
|
RH
|
6.3
|
1.0%
|
45.5%
|
4.4
|
0.8%
|
Cetrotide®
|
RH
|
6.2
|
1.0%
|
(3.5%)
|
6.4
|
1.2%
|
Metrodin-HP®
|
RH
|
4.1
|
0.7%
|
(7.9%)
|
4.5
|
0.8%
|
Six
Months
Ended
June
30,
2005
|
Six
Months
Ended
June
30,
2004
|
|||||
*TA
|
$
million
|
%
of sales
|
%
change $
|
$
million
|
%
of sales
|
|
Rebif®
|
MS
|
618.8
|
53.2%
|
19.7%
|
517.1
|
49.0%
|
Gonal-f®
|
RH
|
287.9
|
24.8%
|
(0.1%)
|
288.3
|
27.3%
|
Saizen®
|
Growth
|
101.4
|
8.7%
|
19.5%
|
84.8
|
8.0%
|
Serostim®
|
Wasting
|
35.5
|
3.1%
|
(17.3%)
|
43.0
|
4.1%
|
Novantrone®
|
MS/Oncology
|
34.3
|
2.9%
|
(11.8%)
|
38.9
|
3.7%
|
Cetrotide®
|
RH
|
12.4
|
1.1%
|
(2.3%)
|
12.7
|
1.2%
|
Crinone®
|
RH
|
12.1
|
1.0%
|
34.0%
|
9.0
|
0.9%
|
Ovidrel®
|
RH
|
12.1
|
1.0%
|
45.9%
|
8.3
|
0.8%
|
Raptiva®
|
Dermatology
|
11.8
|
1.0%
|
4171.9%
|
0.3
|
0.0%
|
Metrodin-HP®
|
RH
|
7.3
|
0.6%
|
(1.6%)
|
7.4
|
0.7%
|
*
Therapeutic Areas
|
|||
RH
|
=
Reproductive Health
|
Wasting
|
=
AIDS Wasting
|
MS
|
=
Multiple Sclerosis
|
Growth
|
=
Growth Retardation
|
Oncology
|
=
Oncology
|
Dermatology
|
=
Dermatology
|
Six
months ended June 30
|
2005*
US$'000
|
%
of
Revenues
|
%
change
|
2004*
US$'000
|
%
of
Revenues
|
|||||||||||
Revenues | ||||||||||||||||
Product
sales
|
1,162,900
|
10.2
|
%
|
1,055,335
|
||||||||||||
Royalty and license income |
115,237
|
29.0 |
%
|
89,360 | ||||||||||||
Total
Revenues
|
1,278,137
|
100.0
|
%
|
11.7
|
%
|
1,144,695
|
100.0
|
%
|
||||||||
Operating
Expenses
|
||||||||||||||||
Cost
of product sales
|
133,995
|
147,851
|
||||||||||||||
%
of Sales
|
11.5
|
%
|
14.0
|
%
|
||||||||||||
Selling,
general and administrative
|
437,115
|
34.2
|
%
|
15.9
|
%
|
377,253
|
33.0
|
%
|
||||||||
Research
and development
|
302,059
|
23.6
|
%
|
21.1
|
%
|
249,379
|
21.8
|
%
|
||||||||
Exceptional
litigation expense and related costs
|
725,000
|
56.7
|
%
|
-
|
-
|
-
|
||||||||||
Other
operating expense, net
|
130,512
|
10.2
|
%
|
15.2
|
%
|
113,251
|
9.9
|
%
|
||||||||
Total
Operating Expenses
|
1,728,681
|
135.3
|
%
|
94.7
|
%
|
887,734
|
77.6
|
%
|
||||||||
Operating
(Loss) / Income
|
(450,544
|
)
|
(35.3
|
%)
|
(275.3
|
%)
|
256,961
|
22.4
|
%
|
|||||||
Financial
income, net
|
15,964
|
(34.5
|
%)
|
24,380
|
||||||||||||
Other income, net |
22,280
|
64
|
||||||||||||||
Total Non Operating Income, net |
38,244
|
24,444
|
||||||||||||||
(Loss)
/ Income Before Taxes and Minority Interests
|
(412,300
|
)
|
(32.3
|
%)
|
(246.5
|
%)
|
281,405
|
24.6
|
%
|
|||||||
Taxes |
(20,434
|
)
|
45,772
|
|||||||||||||
(Loss)
/ Income Before Minority Interests
|
(391,866
|
)
|
235,633
|
|||||||||||||
Minority interests |
759
|
(1,611
|
)
|
|||||||||||||
Net
(Loss) / Income
|
(392,625
|
)
|
(30.7
|
%)
|
(265.5
|
%)
|
237,244
|
20.7
|
%
|
2005
|
|
*
* Proforma
2005
|
|
%
Change
|
|
2004
|
|
*
*
Proforma
2005
%
Change
|
||||||||
Basic
(Loss) / Earnings per Share (in U.S. dollars)
|
||||||||||||||||
-
Bearer shares
|
(26.96
|
)
|
17.01
|
(277.8
|
%)
|
15.16
|
12.2
|
%
|
||||||||
-
Registered shares
|
(10.78
|
)
|
6.81
|
(277.8
|
%)
|
6.07
|
12.2
|
%
|
||||||||
-
American depositary shares
|
(0.67
|
)
|
0.43
|
(277.8
|
%)
|
0.38
|
12.2
|
%
|
||||||||
Diluted
(Loss) / Earnings per Share (in U.S. dollars)
|
||||||||||||||||
-
Bearer shares
|
(26.96
|
)
|
16.99
|
(278.1
|
%)
|
15.13
|
12.2
|
%
|
||||||||
-
Registered shares
|
(10.78
|
)
|
6.79
|
(278.1
|
%)
|
6.05
|
12.2
|
%
|
||||||||
-
American depositary shares
|
(0.67
|
)
|
0.42
|
(278.1
|
%)
|
0.38
|
12.2
|
%
|
Net
(Loss) / Income
|
(392,625
|
)
|
(30.7
|
%)
|
(265.5
|
%)
|
237,244
|
20.7
|
%
|
|||||||
Litigation
expense and related costs
|
725,000
|
-
|
||||||||||||||
Tax
impact on litigation expense and related costs
|
(64,525
|
)
|
-
|
|||||||||||||
Gain
on sale of investment in Celgene
|
(29,963
|
)
|
-
|
|||||||||||||
Tax
impact on gain on sale of investment in Celgene
|
1,439
|
-
|
||||||||||||||
Impairment loss on investment in CancerVax |
8,440
|
-
|
||||||||||||||
Net
Income without exceptional items
|
247,766
|
19.4
|
%
|
4.4
|
%
|
237,244
|
20.7
|
%
|
Three
months ended June 30
|
2005*
US$'000
|
%
of
Revenues
|
%
change
|
2004*
US$'000
|
%
of
Revenues
|
|||||||||||
Revenues
|
||||||||||||||||
Product
sales
|
611,487
|
13.5
|
%
|
538,622
|
||||||||||||
Royalty
and license income
|
65,269
|
33.3
|
%
|
48,981
|
||||||||||||
Total
Revenues
|
676,756
|
100.0
|
%
|
15.2
|
%
|
587,603
|
100.0
|
%
|
||||||||
Operating
Expenses
|
||||||||||||||||
Cost
of product sales
|
74,525
|
3.2
|
%
|
72,182
|
||||||||||||
%
of Sales
|
12.2
|
%
|
13.4
|
%
|
||||||||||||
Selling,
general and administrative
|
222,466
|
32.9
|
%
|
15.2
|
%
|
193,050
|
32.9
|
%
|
||||||||
Research
and development
|
145,785
|
21.5
|
%
|
18.4
|
%
|
123,180
|
21.0
|
%
|
||||||||
Other
operating expense, net
|
66,688
|
9.9
|
%
|
16.4
|
%
|
57,293
|
9.8
|
%
|
||||||||
Total
Operating Expenses
|
509,464
|
75.3
|
%
|
14.3
|
%
|
445,705
|
75.9
|
%
|
||||||||
Operating
Income
|
167,292
|
24.7
|
%
|
17.9
|
%
|
141,898
|
24.1
|
%
|
||||||||
Financial
income, net
|
9,077
|
(40.9
|
%)
|
15,346
|
||||||||||||
Other
income, net
|
26,568
|
60
|
||||||||||||||
Total Non Operating Income, net |
35,645
|
15,406
|
||||||||||||||
Income
Before Taxes and Minority Interests
|
202,937
|
30.0
|
%
|
29.0
|
%
|
157,304
|
26.8
|
%
|
||||||||
Taxes
|
27,626
|
25,742
|
||||||||||||||
Income
Before Minority Interests
|
175,311
|
131,562
|
||||||||||||||
Minority
Interests
|
187
|
(637
|
)
|
|||||||||||||
Net
Income
|
175,124
|
25.9
|
%
|
32.5
|
%
|
132,199
|
22.5
|
%
|
|
2005
|
*
* Proforma
2005
|
%
Change
|
2004
|
*
*
Proforma
2005
%
Change
|
|||||||||||
Basic
Earnings per Share (in U.S. dollars)
|
||||||||||||||||
-
Bearer shares
|
12.02
|
10.32
|
41.1
|
%
|
8.52
|
21.1
|
%
|
|||||||||
-
Registered shares
|
4.81
|
4.13
|
41.1
|
%
|
3.41
|
21.1
|
%
|
|||||||||
-
American depositary shares
|
0.30
|
0.26
|
41.1
|
%
|
0.21
|
21.1
|
%
|
|||||||||
Diluted
Earnings per Share (in U.S. dollars)
|
||||||||||||||||
-
Bearer shares
|
11.90
|
10.25
|
40.2
|
%
|
8.49
|
20.8
|
%
|
|||||||||
-
Registered shares
|
4.76
|
4.10
|
40.2
|
%
|
3.40
|
20.8
|
%
|
|||||||||
-
American depositary shares
|
0.30
|
0.26
|
40.2
|
%
|
0.21
|
20.8
|
%
|
Net
Income
|
175,124
|
25.9
|
%
|
32.5
|
%
|
132,199
|
22.5
|
%
|
||||||||
Gain
on sale of investment in Celgene
|
(29,963
|
)
|
-
|
|||||||||||||
Tax
impact on gain on sale of investment in Celgene
|
1,439
|
-
|
||||||||||||||
Impairment loss on investment in CancerVax |
3,740
|
- | ||||||||||||||
Net
Income without exceptional items
|
150,340
|
22.2
|
%
|
13.7
|
%
|
132,199
|
22.5
|
%
|
As
of
|
June
30, 2005 *
|
December
31 , 2004
|
|||||
US$'000
|
US$'000
|
||||||
Assets
|
|||||||
Current
Assets
|
|||||||
Cash
and cash equivalents
|
747,744
|
275,979
|
|||||
Short-term
financial assets
|
582,328
|
784,999
|
|||||
Trade
accounts receivable
|
410,211
|
427,935
|
|||||
Inventories
|
275,029
|
326,937
|
|||||
Prepaid
expenses and other current assets
|
223,284
|
237,205
|
|||||
Total
Current Assets
|
2,238,596
|
2,053,055
|
|||||
Non-Current
Assets
|
|||||||
Tangible
fixed assets
|
728,502
|
799,878
|
|||||
Intangible
assets
|
311,938
|
290,558
|
|||||
Deferred
tax assets
|
254,628
|
201,023
|
|||||
Long-term
financial assets
|
657,557
|
929,030
|
|||||
Other
long-term assets
|
122,178
|
133,302
|
|||||
Total
Non-Current Assets
|
2,074,803
|
2,353,791
|
|||||
Total
Assets
|
4,313,399
|
4,406,846
|
|||||
Liabilities
|
|||||||
Current
Liabilities
|
|||||||
Trade
and other payables
|
329,381
|
426,616
|
|||||
Short-term
financial debts
|
29,338
|
34,527
|
|||||
Income
taxes
|
119,234
|
166,861
|
|||||
Deferred
income - current
|
32,663
|
33,128
|
|||||
Other
current liabilities
|
924,745
|
225,143
|
|||||
Total
Current Liabilities
|
1,435,361
|
886,275
|
|||||
Non-Current
Liabilities
|
|||||||
Long-term
financial debts
|
602,179
|
640,892
|
|||||
Deferred
tax liabilities
|
19,292
|
24,242
|
|||||
Deferred
income - non current
|
140,928
|
157,004
|
|||||
Provisions
and other long-term liabilities
|
259,490
|
261,728
|
|||||
Total
Non-Current Liabilities
|
1,021,889
|
1,083,866
|
|||||
Total
Liabilities
|
2,457,250
|
1,970,141
|
|||||
Minority
Interests
|
953
|
3,343
|
|||||
Shareholders'
Equity
|
|||||||
Share
capital
|
255,058
|
254,420
|
|||||
Share
premium
|
1,050,758
|
1,023,332
|
|||||
Treasury
shares
|
(984,426
|
)
|
(987,489
|
)
|
|||
Retained
earnings
|
1,517,512
|
2,020,425
|
|||||
Fair
value and other reserves
|
7,657
|
56,829
|
|||||
Cumulative
foreign currency translation adjustments
|
8,637
|
65,845
|
|||||
Total
Shareholders' Equity
|
1,855,196
|
2,433,362
|
|||||
Total
Liabilities, Minority Interests and Shareholders' Equity
|
4,313,399
|
4,406,846
|
Share
capital
US$'000
|
|
Share
premium
US$'000
|
|
Treasury
shares US$'000
|
|
Retained
earnings
US$'000
|
|
Fair
value
and
other
reserves
US$'000
|
|
Cumulative
foreign
currency
translation
adjustments
US$'000
|
|
Total
shareholders'
equity
US$'000
|
||||||||||
Balance
as of January 1, 2004:
|
||||||||||||||||||||||
As
previously reported
|
253,895
|
1,002,991
|
(157,642
|
)
|
1,669,700
|
22,711
|
88,535
|
2,880,190
|
||||||||||||||
Effect
of revisions to IAS 39 Financial Instruments: Recognition
and Measurement
|
(26,649
|
)
|
33,137
|
(2,035
|
)
|
4,453
|
||||||||||||||||
Effect
of IFRS 2 Share Based Payments
|
(2,947 |
)
|
(258 |
)
|
(3,205 |
)
|
||||||||||||||||
As
restated *
|
253,895
|
1,002,991
|
(157,642
|
)
|
1,640,104
|
55,848
|
86,242
|
2,881,438
|
||||||||||||||
Acquisition
of treasury shares
|
(258,974
|
)
|
(258,974
|
)
|
||||||||||||||||||
Issue
of share capital
|
464 |
18,311
|
3,189
|
21,964
|
||||||||||||||||||
Net
income
|
237,244
|
237,244
|
||||||||||||||||||||
Dividend
- bearer shares
|
(71,096
|
)
|
(71,096
|
)
|
||||||||||||||||||
Dividend
- registered shares
|
(28,258
|
)
|
(28,258
|
)
|
||||||||||||||||||
Fair
value adjustments on available-for sales investments
|
(10,320
|
)
|
(10,320
|
)
|
||||||||||||||||||
Translation effects | (29,507 | ) | (29,507 |
)
|
||||||||||||||||||
Balance
as of June 30, 2004 *
|
254,359 | 1,021,302 | (413,427 | ) |
1,777,994
|
45,528 | 56,735 | 2,742,491 | ||||||||||||||
Balance
as of January 1, 2005:
|
||||||||||||||||||||||
As
previously reported
|
254,420
|
1,023,125
|
(987,489
|
)
|
2,064,499
|
23,482
|
69,841
|
2,447,878
|
||||||||||||||
Effect
of revisions to IAS 39 Financial Instruments: Recognition and
Measurement
|
(28,546
|
)
|
33,347
|
(2,246
|
)
|
2,555
|
||||||||||||||||
Effect
of IFRS 2 Share Based Payments
|
207
|
(15,528
|
)
|
(1,750
|
)
|
(17,071
|
)
|
|||||||||||||||
As
restated *
|
254,420
|
1,023,332
|
(987,489
|
)
|
2,020,425
|
56,829
|
65,845
|
2,433,362
|
||||||||||||||
Issue
of share capital
|
638
|
19,036
|
3,063
|
22,737
|
||||||||||||||||||
Issue
of call options on Serono shares
|
94
|
94
|
||||||||||||||||||||
Fair
value of stock options on Serono shares that have vested
|
8,390
|
8,390
|
||||||||||||||||||||
Net
loss
|
(392,625
|
)
|
(392,625
|
)
|
||||||||||||||||||
Dividend
- bearer shares
|
(76,992
|
)
|
(76,992
|
)
|
||||||||||||||||||
Dividend
- registered shares
|
(33,390
|
)
|
(33,390
|
)
|
||||||||||||||||||
Recognition
of unrealized loss on available-for-sale investment
|
8,440
|
8,440
|
||||||||||||||||||||
Fair
value adjustments on available-for sales investments
|
(51,898
|
)
|
(51,898
|
)
|
||||||||||||||||||
Fair
value adjustments on financial instruments
|
(5,714
|
)
|
(5,714
|
)
|
||||||||||||||||||
Translation
effects
|
(57,208
|
)
|
(57,208
|
)
|
||||||||||||||||||
Balance
as of June 30, 2005 *
|
255,058
|
1,050,758
|
(984,426
|
)
|
1,517,512
|
7,657
|
8,637
|
1,855,196
|
Six
months ended June 30
|
2005*
US$'000
|
2004*
US$'000
|
|||||
(Loss)
/ Income before taxes and minority interests
|
(412,300
|
)
|
281,405
|
||||
Reversal
of non-cash items
|
|||||||
Depreciation
and amortization
|
68,093
|
65,905
|
|||||
Financial
income
|
(25,828
|
)
|
(32,029
|
)
|
|||
Financial
expense
|
16,010
|
12,361
|
|||||
Legal
provision
|
725,000
|
--
|
|||||
Other
non-cash items
|
(16,925
|
)
|
11,281 | ||||
Cash
Flows From Operating Activities Before Working Capital
Changes
|
354,050
|
338,923
|
|||||
Working
Capital Changes
|
|||||||
Trade
accounts payable, other current liabilities and deferred
income
|
(73,180
|
)
|
(2,802
|
)
|
|||
Trade
accounts receivable and other receivables
|
(18,180
|
)
|
(26,532
|
)
|
|||
Inventories
|
4,739
|
5,942
|
|||||
Prepaid
expenses and other current assets
|
(14,289
|
)
|
(13,858
|
)
|
|||
Taxes
paid
|
(76,029
|
)
|
(49,532 |
)
|
|||
Total working capital changes |
(176,939
|
)
|
(86,782 |
)
|
|||
Net
Cash Flows From Operating Activities
|
177,111
|
252,141 | |||||
Investment
in tangible fixed assets
|
(76,267
|
)
|
(85,810
|
)
|
|||
Proceeds
from disposal of tangible fixed assets
|
2,203
|
3,159
|
|||||
Purchase
of intangible and other long-term assets
|
(47,686
|
)
|
(9,936
|
)
|
|||
Purchase
of available-for-sale investments
|
(171,825
|
)
|
(837,588
|
)
|
|||
Proceeds
from sale of available-for-sale investments
|
607,453
|
302,126
|
|||||
Interest
received
|
59,084
|
53,363
|
|||||
Net
Cash Flows From Investing Activities
|
372,962
|
(574,686 |
)
|
||||
Acquisition
of treasury shares
|
--
|
(258,974
|
)
|
||||
Proceeds
from issue of Serono shares
|
11,055
|
10,333
|
|||||
Proceeds
from exercise of options on Serono shares
|
4,534
|
677
|
|||||
Proceeds
from issue of options on Serono shares
|
263
|
--
|
|||||
Increase
in long-term financial debt
|
32,694
|
17,339
|
|||||
Repayment
of long-term financial debt
|
--
|
(5,436
|
)
|
||||
Change
in short-term financial debt
|
(4,728
|
)
|
2,301
|
||||
Other
non-current liabilities
|
(7,942
|
)
|
(5,319
|
)
|
|||
Interest
paid
|
(2,062
|
)
|
(2,591
|
)
|
|||
Dividends
paid
|
(110,382
|
)
|
(99,354
|
)
|
|||
Net
Cash Flows From Financing Activities
|
(76,568
|
)
|
(341,024 |
)
|
|||
Effect
of Exchange Rate Changes on Cash and Cash Equivalents
|
(1,740
|
)
|
(1,444
|
)
|
|||
Net
lncrease/(Decrease) in Cash and Cash Equivalents
|
471,765
|
(665,013 |
)
|
||||
Cash
and cash equivalents at the beginning of period
|
275,979
|
1,003,972
|
|||||
Cash
and cash equivalents at the end of period
|
747,744
|
338,959 |
Europe
|
North America |
Middle
East, Africa
and |
Asia- Pacific, |
Latin America |
Unallocated
|
Total
|
||||||||||||||||
Six
months ended June 30, 2005
|
US$000
|
US$000
|
US$000
|
US$000
|
US$000
|
US$000
|
US$000
|
|||||||||||||||
Product
sales
|
542,476
|
401,430
|
93,680
|
63,447
|
61,867
|
-
|
1,162,900
|
|||||||||||||||
Royalty
and license income
|
96,599
|
902
|
17,736
|
-
|
-
|
-
|
115,237
|
|||||||||||||||
Total
revenues
|
639,075
|
402,332
|
111,416
|
63,447
|
61,867
|
-
|
1,278,137
|
|||||||||||||||
Operating
loss before unallocated expenses
|
(441,596
|
)
|
206,292
|
24,638
|
17,681
|
33,574
|
(50,555
|
)
|
(209,966
|
)
|
||||||||||||
Corporate
research and development expenses
|
-
|
-
|
-
|
-
|
-
|
(240,578
|
)
|
(240,578
|
)
|
|||||||||||||
Operating
loss
|
(450,544
|
)
|
Europe
|
North America
|
Middle
East, Africa and Eastern |
Asia-Pacific, Oceania |
Latin America
|
Unallocated
|
Total
|
||||||||||||||||
Six
months ended June 30, 2004
|
US$000
|
US$000
|
US$000
|
US$000
|
US$000
|
US$000
|
US$000
|
|||||||||||||||
|
||||||||||||||||||||||
Product
sales
|
463,496
|
389,260
|
87,794
|
59,734
|
55,051
|
-
|
1,055,335
|
|||||||||||||||
Royalty
and license income
|
78,324
|
606
|
10,430
|
-
|
-
|
-
|
89,360
|
|||||||||||||||
Total
revenues
|
541,820
|
389,866
|
98,224
|
59,734
|
55,051
|
-
|
1,144,695
|
|||||||||||||||
Operating
income before unallocated expenses
|
210,133
|
213,260
|
28,624
|
18,528
|
27,404
|
(46,921
|
)
|
451,028
|
||||||||||||||
Corporate
research and development expenses
|
-
|
-
|
-
|
-
|
-
|
(194,067
|
)
|
(194,067
|
)
|
|||||||||||||
Operating
income
|
256,961
|
Six
months ended
June 30
|
|||||||
2005
|
2004
|
||||||
US$000
|
US$000
|
||||||
Net
(loss) / income attributable to bearer shareholders
|
(273,861
|
)
|
170,445
|
||||
Net
(loss) / income attributable to registered shareholders
|
(118,764
|
)
|
66,799
|
||||
Total
net (loss) / income
|
(392,625
|
)
|
237,244
|
||||
Weighted
average number of bearer shares outstanding
|
10,158,113
|
11,240,537
|
|||||
Weighted
average number of registered shares outstanding
|
11,013,040
|
11,013,040
|
Six
months ended June
30
|
|||||||
2005
|
2004
|
||||||
US$
|
US$
|
||||||
Basic
(loss) / earnings per share
|
|||||||
Bearer
shares
|
(26.96
|
)
|
15.16
|
||||
Registered
shares
|
(10.78
|
)
|
6.07
|
||||
American
depositary shares
|
(0.67
|
)
|
0.38
|
As
of June 30, 2005
|
|||||||||||||
Class
of shares
|
Number
of shares
|
|
Nominal
value
|
CHF000
|
US$000
|
||||||||
Issued
and fully paid share capital
|
|||||||||||||
Registered
|
11,013,040
|
CHF10
|
110,130
|
68,785
|
|||||||||
Bearer
|
11,768,819
|
CHF25
|
294,221
|
186,273
|
|||||||||
Total
|
404,351
|
255,058
|
|||||||||||
Authorized
share capital - bearer
|
1,400,000
|
CHF25
|
35,000
|
27,288
|
|||||||||
Conditional
share capital - bearer for options and/or convertible bonds
|
1,452,000
|
CHF25
|
36,300
|
28,302
|
|||||||||
Conditional
share capital - bearer for stock options
|
696,007
|
CHF25
|
17,400
|
13,566
|
|||||||||
|
As
of December 31,
2004
|
||||||||||||
Class
of shares
|
Number
of shares
|
Nominal
value
|
CHF000
|
|
US$000
|
||||||||
Issued
and fully paid share capital
|
|||||||||||||
Registered
|
11,013,040
|
CHF10
|
110,130
|
68,785
|
|||||||||
Bearer
|
11,738,175
|
CHF25
|
293,455
|
185,635
|
|||||||||
Total
|
403,585
|
254,420
|
|||||||||||
Authorized
share capital - bearer
|
1,400,000
|
CHF25
|
35,000
|
30,905
|
|||||||||
Conditional
share capital - bearer for option and/or convertible bonds
|
1,452,000
|
CHF25
|
36,300
|
32,053
|
|||||||||
Conditional
share capital - bearer for stock options
|
726,651
|
CHF25
|
18,166
|
16,041
|
2005
|
2004
|
||||||||||||
Weighted
|
Weighted
|
||||||||||||
average
|
average
|
||||||||||||
Bearer
|
exercise
|
Bearer
|
exercise
|
|
|||||||||
options
|
price
CHF
|
options
|
price
CHF
|
||||||||||
Outstanding
as of January 1
|
346,446
|
995
|
277,782
|
1,068
|
|||||||||
Granted
|
91,465
|
859
|
93,920
|
792
|
|||||||||
Exercised
|
(7,885
|
)
|
615
|
(1,480
|
)
|
578
|
|||||||
Cancelled
|
(12,450
|
)
|
1,110
|
(12,094
|
)
|
1,126
|
|||||||
Outstanding
as of June 30
|
417,576
|
969
|
358,128
|
996
|
2005
|
2004
|
||||||||||||
Weighted
|
Weighted
|
||||||||||||
average
|
average
|
||||||||||||
ADS
|
exercise
|
ADS
|
|
exercise
|
|||||||||
options
|
price
US$
|
options
|
price
US$
|
||||||||||
Outstanding
as of January 1
|
1,066,800
|
15.54
|
20,000
|
16.51
|
|||||||||
Granted
|
834,200
|
17.73
|
1,081,400
|
15.52
|
|||||||||
Exercised
|
(5,550
|
)
|
15.55
|
-
|
-
|
||||||||
Cancelled
|
(143,800
|
)
|
15.82
|
(37,200
|
)
|
15.55
|
|||||||
Outstanding
as of June 30
|
1,751,650
|
16.56
|
1,064,200
|
15.54
|
Low
|
|
High
|
|||||
"Adjusted"
earnings guidance
|
$
|
520,000
|
$
|
540,000
|
|||
Known
adjustments to arrive at IFRS earnings guidance
|
|||||||
Litigation
expense and related costs (1)
|
(725,000
|
)
|
(725,000
|
)
|
|||
Tax
impact on litigation expense and related costs (1)
|
64,525
|
64,525
|
|||||
Gain
on sale of investment (2)
|
29,963
|
29,963
|
|||||
Tax
impact on gain on sale of investment (2)
|
(1,439
|
)
|
(1,439
|
)
|
|||
Impairment
loss on investment (3)
|
(8,440
|
)
|
(8,440
|
)
|
|||
IFRS
earnings guidance
|
$
|
(120,391
|
)
|
$
|
(100,391
|
)
|
(1)
|
To
exclude the provision for the amount of $725.0 million ($660.5
million
after-tax) from the investigation related
to Serostim. The provision has been reported within operating
expenses.
|
(2)
|
To
exclude the gain in the amount of $30.0 million ($28.5 million
after-tax)
from the sale of the investment in
Celgene. The gain has been reported as other income.
|
(3)
|
To
exclude the impairment loss recognized for the amount of
$8.4 million on
the investment in CancerVax. The
impairment loss has been reported against other income.
|
SERONO
S.A.
|
||
a
Swiss corporation
|
||
(Registrant)
|
||
July
20, 2005
|
By:
|
/s/
Stuart Grant
|
Name:
Stuart Grant
|
||
Title:
Chief Financial Officer
|