Dutch chemicals and pharmaceuticals group Akzo Nobel has reported a robust set of third quarter figures, with net profit of 313 million euros, up 79% year-on-year, way ahead of market expectations.
Sales and operating profit also came in at the top end of forecasts, up 4.5% to 3.4 billion euros and 15.5% to 364 million euros, respectively.
But the solid results were overshadowed by the announcement that one of the Akzo’s biggest pipeline hopes, the antipsychotic asenapine, is facing a delay after disappointing results in a clinical trial.
The company’s chief executive, Hans Wijers, reiterated that it plans to launch an initial public offering (IPO) for its Organon drugs unit as planned, although earlier this year he said the timing would depend on the outcome of the Phase III trials of asenapine, which is partnered with Pfizer.
Akzo said it would met with regulators early next year to discuss the way forward with asenapine. Originally it had hoped to be in a position to file for approval of the drug as a schizophrenia treatment at that time. Data on its performance in another indication – bipolar disorder – looked good, said Wijers.
The big question in analysts’ minds now is whether asenapine, which is considered one of the main drivers of growth for Organon, will now be compromised in its ability to compete in the tough market for antipsychotics.
As well as strong competition from the likes of Johnson & Johnson’s Risperdal (risperidone), Eli Lilly’s Zyprexa (olanzapine), Pfizer’s Geodon (ziprasidone), AstraZeneca’s Seroquel (quetiapine) and Bristol-Myers Squibb’s Abilify (aripiprazole), the market will also be shaken up next year when risperidone loses patent protection in the USA.
Should asenapine fail, Akzo’s intended IPO of Organon comes into question, according to analyst James Kinight at Collins Stewart, although they note it might raise the possibility of other options, e.g. a trade sale.
Organon saw 6% revenue growth to 626 million euros in the quarter, with new products - particularly the NuvaRing contraceptive which rose 66% to 53 million euros - continuing to do well and giving a “rosey” 15.3% operating margin, said Knight.
Shares in Akzo responded badly to the asenapine news, dropping 7% in late-morning trading to 44.16 euros.