UPDATE 1-Cost cuts help Actelion raise 2012 outlook

Thu Jul 19, 2012 1:59am EDT

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ZURICH, July 19 (Reuters) - Actelion, Europe's biggest biotech company, said previously announced cost cuts should boost its bottom line this year, as it swung to a first-half profit despite its key drug facing tough competition in the United States.

Actelion said on Thursday it now expected core earnings to grow in the mid single-digit percentage range for 2012, whereas previously it had guided for no core earnings growth.

"I am very pleased that our efforts to control costs are already having an impact on profitability," chief executive Jean-Paul Clozel said.

Net income for the first half rose to 174 million Swiss francs ($177 million), compared with a net loss of 262 million in the 2011 period.

Sales of Tracleer fell 4 percent in local currencies to 752 million francs, due to tough competition in the United States and price cuts in other regions.

Pulmonary arterial hypertension (PAH) drug Tracleer accounts for the majority of the company's sales, meaning it must take measures to ensure growth when it loses exclusivity in 2015.

The group is also battling pressure on margins due to a strong franc, a weak European economy that has pressured healthcare spending, and increasing competition from U.S. company Gilead's rival drug Letairis.

To counter these pressure it announced job cuts and other savings measures last week. It has not yet indicated how large the one-off restructuring charge will be or how much money it intends to save.

PAH is a disease of the arteries connecting the lungs and the heart. As blood flow gets restricted the right side of the heart gets put under rising strain to pump blood, resulting in symptoms of breathlessness and fatigue.

Actelion's big drug hope is PAH treatment macitentan, which received a boost as a viable top seller earlier this year after it beat expectations in a key clinical trial.

The company said it had collected more than 100 million francs in due payments from southern European countries, where the debt crisis has raised questions about hospitals' ability to settle ills. It said its more upbeat profit view for the year was contingent on no further unpaid bills in the region. ($1 = 0.9792 Swiss franc) (Reporting by Catherine Bosley; Editing by Dan Lalor)

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