October 20, 2015 / 5:46 AM / 5 years ago

REFILE-UPDATE 3-Actelion raises 2015 earnings forecast after strong drug sales

(Fixes spelling of “Tracleer” in eighth paragraph)

* Biggest European biotech raises earnings forecast

* Could afford acquisitions above $2.5 billion - CFO

* Reward from large buy would have to justify risk - CFO

* CEO declines comment on strategic talks with ZS Pharma

By John Miller

ZURICH, Oct 20 (Reuters) - Europe’s biggest biotech firm Actelion Ltd, which is weighing acquisitions to increase its reach, raised its full-year earnings forecast on Tuesday as sales of a new lung and heart drug beat expectations.

Sales of Actelion’s new pulmonary arterial hypertension (PAH) drug Opsumit were 147 million francs ($154 million) in the third quarter, above the 125 million forecast by analysts. Net income was 165 million, again above forecasts of 134 million.

“The company has its costs under control,” analysts at Zuercher Kantonalbank wrote. “As a result, the operating results and the profit were significantly above market expectations.”

In the first nine months, Actelion’s core earnings rose to 651 million francs from 563 million a year earlier, when it faced U.S. rebate reversals. The company now expects core earnings growth to exceed 20 percent this year, up from a previous forecast of growth in the mid- to high-teens.

Actelion shares rose as much as 5 percent on Tuesday and traded 2.9 percent higher at 128.8 francs at 0853 GMT.

The company, seen as a potential target for drug maker Shire Plc earlier this year, said it was regularly in talks with “seven or eight” companies over possible partnerships, but was relying on new drugs, not acquisitions, for growth.

“We don’t need M&A,” Chief Executive Officer Jean-Paul Clozel told Reuters in an interview, saying acquisitions were “not a fundamental aspect of our strategy”.

Actelion is counting on sales of Opsumit to make up for declining revenue from an older medicine, Tracleer, that is losing patent protection this year. Quarterly sales of Traceless, which also treats the fatal disease PAH, fell 17 percent to 289 million francs, roughly in line with analyst expectations.

“The launch momentum for Opsumit continues unabated,” said Chief Financial Officer Andre Muller.

In September, Actelion confirmed strategic discussions with the Texas-based biotechnology company ZS Pharma. Clozel declined to comment on those talks.

Actelion has the capacity for acquisitions exceeding $2.5 billion, though such a large purchase would have to be justified because it would carry more risks, CFO Muller told Reuters.

The company has 700 million francs in cash and can raise more capital should the right target arise, he said.

Clozel said Actelion had not been approached by others hunting for acquisitions. Its shares rose to more than 147 francs earlier this year on investor optimism that it could be targeted by Shire.

Prior to Tuesday’s rise, Actelion shares had dropped 16 percent since Shire made an offer for Baxalta. Biotechnology firms have also fallen over concerns drug makers face increasing pricing difficulties, particularly in the United States.

Clozel said Actelion shares had been caught in the downdraft but that the company had priced Opsumit on a par with Tracleer, rather than seeking increases that might be criticised.

“We always try not to go to the excess,” he said. ($1 = 0.9527 Swiss francs) (Editing by David Clarke)

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