In July 100% of the share capital of Pro Farma AG, a Swiss pharmaceutical company with headquarters in Zug, was acquired. The value of the transaction (enterprise value) is of CHF 16 million and was funded from existing liquidity. Pro Farma, with 2016 revenues of around CHF 10 million, markets proprietary and in-licensed specialties in selected therapeutic areas which include both prescription and OTC drugs. The main brands are Lacdigest (tilactase), Tretinac (isotretinoin) and Urocit (potassium citrate). Furthermore, the company offers distribution and promotion services to other pharmaceutical companies. The acquisition of Pro Farma represents an excellent base on which to develop our operations in Switzerland where Recordati has recently started to sell its product portfolio directly to the market. Furthermore, the main product Lacdigest will contribute to the enhancement of our presence in gastroenterology.
Also during July, a partnership with AP-HP (Assistance Publique - Hopitaux de Paris) was finalized under which AP-HP granted an exclusive world-wide license to Orphan Europe (a Recordati company) for the development and commercialization of an innovative product for the treatment of acute decompensation episodes in patients affected by Maple Syrup Urine Disease (MSUD), a severe metabolic disorder.
At the beginning of August Recordati and Gedeon Richter signed an exclusive license agreement to commercialize cariprazine, a novel atypical antipsychotic in Western Europe and in Algeria, in Tunisia and in Turkey. The European Medicines Agency (EMA) started the evaluation of Richter`s marketing authorisation application for cariprazine for the treatment of schizophrenia in March 2016. Schizophrenia is a chronic and disabling disorder that has a worldwide prevalence approaching 1%. It imposes significant burden on patients, their families, and society. Symptoms fall into three broad categories: positive symptoms (hallucinations, delusions, thought disorders, and movement disorders), negative symptoms (such as loss of motivation and social withdrawal), and cognitive symptoms (problems with executive functioning, focusing, and working memory). Cariprazine is an orally active and potent dopamine D3/D2 receptor partial agonist with preferential binding to D3 receptors and partial agonist at serotonin 5-HT1A receptors.
Business outlook
On 9 February 2017 the company announced its financial targets for 2017 and its three-year business plan. Including the contribution of further acquisitions which may be completed within the period under analysis, our financial performance expectations for the 2017-2019 period are the following:
For 2017, our targets are to achieve sales of around € 1,220 million, EBITDA of around € 410 million, operating income of around € 365 million and net income of around € 260 million.
For 2019, we expect to achieve sales of around € 1,450 million, EBITDA of around € 500 million, operating income of around € 450 million and net income of around € 325 million.
Group consolidated sales during the first two months of 2017 are particularly positive thanks to the good performance of all our activities and also to favourable seasonality factors in some countries.
Dividend
Based on the results obtained, the Board of Directors of the parent company will propose to the shareholders a dividend of € 0.35 per share, in full balance of the interim 2016 dividend of € 0.35, to be paid to all shares outstanding at ex-dividend date, excluding those in treasury stock, as from 26 April 2017 (record date 25 April 2017), with ex-dividend on 24 April 2017 (against presentation of coupon no. 19). The full 2016 dividend is therefore of € 0.70 per share (€ 0.60 per share in 2015).
Further Board resolutions to be submitted to the Shareholders Meeting
The Board of Directors approved the following further deliberation proposals to be submitted to the Annual and Extraordinary Shareholders Meeting:
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appointment of the members of the Board of Directors and Board of Statutory Auditors whose respective mandates end with the Shareholders` Meeting;
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renewal of the authorization to buy back and dispose of Recordati shares until the Annual Shareholders` Meeting which will approve the 2017 financial statements;
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examination of the Remuneration Policy pursuant to article 123ter of Legislative Decree 58/1998;
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renewal of the five-year authorization to the Board of Directors pursuant to articles 2443 and 2420-ter of the Civil Code to effect share capital increases, against payment and/or gratuitously, for a maximum nominal value of € 50 million, and to issue bonds convertible into ordinary shares and/or cum warrant, for a maximum amount of € 80 million. The current authorization was never exercised by the Board.
The appointment of Directors and of members of the Board of Statutory Auditors will be made, in compliance with compulsory requirements for balanced gender representation, by means of the list voting method and the shareholding necessary for the presentation of candidacy lists is 1% of the share capital with voting rights in the Ordinary Assembly.
The objective of the proposal to renew the authorization to buy back and dispose of Recordati shares until the Annual Shareholders` Meeting which will approve the 2017 financial statements is, as in previous years, to grant the Board the possibility: of using shares for equity acquisitions or as consideration for strategic agreements; of allowing the company to invest in its own shares; and of constituting a stock of own shares to service current and future stock option plans. The company would be allowed to purchase up to 10,000,000 Recordati existing ordinary (common) shares, which includes those shares held in Treasury stock at any given time, for a maximum cash outlay of € 300,000,000. The purchase price must be at least equal to the shares` nominal value (€ 0.125) and must not exceed the average official Stock Exchange price recorded over the 5 trading days prior to the transaction, plus 5%. Possible purchases will be made on regulated markets and must comply with article 132 of Legislative Decree 58/1998 and with article 144-bis, paragraph 1.b) of the Issuers` Regulations as approved by CONSOB`s resolution 11971/1999 and with market practice allowed and recognized by CONSOB. At 28 February 2017 the company has 3,195,262 shares in Treasury stock which amounts to 1.53% of the current share capital.
The Board of Directors also approved the Remuneration Report pursuant to article 123ter of the Legislative Decree 58/98, the first part of which is the Remuneration Policy to be submitted to the Annual Shareholders` Meeting. The Remuneration Report will be made available to the public within the terms of the law.
Crossborder merger by absorption of an entirely held company
The Board of Directors has also approved the project of crossborder merger by absorption in RECORDATI S.p.A. of the Luxembourg company, entirely held, RECORDATI SA CHEMICAL AND PHARMACEUTICAL COMPANY, in view of rationalising its chain of control for foreign companies.
Being a merger by absorption of an entirely held company:
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the merger will be implemented in a streamlined form pursuant to article 2505 of Italian Civil Code and will be decided by the Board of Directors of the Company by resolution in the form of a public deed, as permitted by art. 22 of the articles of association, and without prejudice of the provisions of art.2505, paragraph 3, of the Italian Civil Code;
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on the date on which the merger will become effective, the shares representing the entire share capital of merged company RECORDATI SA CHEMICAL AND PHARMACEUTICAL COMPANY will be cancelled, with no share swap or issue of new shares by RECORDATI S.p.A.. Accordingly, no share exchange ratio has been determined, and the merger will not involve any change to the composition of the shareholding structure or the control system of RECORDATI S.p.A..
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the merger is exempt from the application of Consob Regulation 17221/2010 and subsequent amendments, as stipulated by the procedure adopted by the Company on transactions with related parties, pursuant to the provisions of art. 14, paragraph 2 of the above Regulation.
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the merger does not require the obligation to publish the information document referred to in Article 70, paragraph 6, of the Issuers` Regulations (in any case, it is noted that Recordati SpA, in 2012, resolved to make use of the derogation from the fulfillment to publish the information document in the event, among other things, mergers` significant transactions).
In light of its crossborder nature, the merger will be effective from the date of the final registration of the merger deed in the Register of Companies of Milan (where RECORDATI S.p.A., the absorbing company, is registered) or any later date established in the merger deed.
Call to an Annual and Extraordinary Shareholders` Meeting
The Board of Directors resolved to convene the Annual and Extraordinary Shareholders` Meeting to be held at the company`s offices on 11 April 2017 at 10.00 am, the sole convocation date, with the following agenda:
Annual Meeting
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Board of Directors` Review of Operations; Report of the Board of Statutory Auditors; Financial Statements as at and for the financial year ended 31st December 2016; relative and consequent resolutions.
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Appointment of the Board of Directors:
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Determination of the number of the members of the Board of Directors.
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Determination of the length of the term of office of the Board of Directors.
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Appointment of the members of the Board of Directors; relative and consequent resolutions.
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Determination of the remuneration of the members of the Board of Directors.
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Appointment of the Board of Statutory Auditors:
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Appointment of the members of the Board of Statutory Auditors and the relative Chairman.
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Determination of their remuneration.
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Remuneration policies in accordance with article 123-ter of Legislative Decree No. 58 of 24th February 1998; relative and consequent resolutions.
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Proposal to authorise the purchase and utilisation of treasury stock; relative and consequent resolutions.
Extraordinary Meeting
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Subject to preliminary revocation of the authorisation granted by the Extraordinary Shareholders meeting of 19 April 2012, grant of an authorisation to the Board of Directors in accordance with articles 2420-ter and 2443 of the Italian Civil Code for maximum amounts of Euro 80,000,000 and Euro 50,000,000 respectively; consequent amendment to Art. 6 of the Corporate By-Laws, relative and consequent resolutions.
The entire notice of call of an Ordinary Shareholders` Meeting is made publicly available as of today on the company`s website www.recordati.com and can also be viewed on the authorized storage system 1Info (www.1Info.it). Within the terms prescribed by current laws and regulations the Directors` reports on the points of the Shareholders` Meeting agenda and any other documents relative to the Shareholders` Meeting agenda will be made available on the company website, at the company`s offices and on the authorized storage system 1Info (www.1Info.it).
Recordati, established in 1926, is an international pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT 0003828271), with a total staff of around 4,000, dedicated to the research, development, manufacturing and marketing of pharmaceuticals. Headquartered in Milan, Italy, Recordati has operations in the main European countries, in Russia, in other Central and Eastern European countries, in Turkey, in North Africa, in the United States of America and in some Latin American countries. An efficient field force of medical representatives promotes a wide range of innovative pharmaceuticals, both proprietary and under license, in a number of therapeutic areas including a specialized business dedicated to treatments for rare diseases. Recordati is a partner of choice for new product licenses for its territories. Recordati is committed to the research and development of new specialties within the urogenital therapeutic area and of treatments for rare diseases. Consolidated revenue for 2016 was € 1,153.9 million, operating income was € 327.4 million and net income was € 237.4 million.
For further information:
Recordati website: www.recordati.com
Investor Relations Media Relations
Marianne Tatschke Studio Noris Morano
(39)0248787393 (39)0276004736, (39)0276004745
e-mail: inver@recordati.it e-mail: norismorano@studionorismorano.com
Statements contained in this release, other than historical facts, are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based on currently available information, on current best estimates, and on assumptions believed to be reasonable. This information, these estimates and assumptions may prove to be incomplete or erroneous, and involve numerous risks and uncertainties, beyond the Company`s control. Hence, actual results may differ materially from those expressed or implied by such forward-looking statements. All mentions and descriptions of Recordati products are intended solely as information on the general nature of the company`s activities and are not intended to indicate the advisability of administering any product in any particular instance.
Board approved 2016 accounts
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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: RECORDATI via GlobeNewswire
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