Biogen Idec (Denmark) Manufacturing ApS

Transcription

1 Biogen Idec (Denmark) Manufacturing ApS Biogen Idec Allé 1, 3400 Hillerød CVR No Annual report for the year ended 31 December 2013 Approved at the annual general meeting of shareholders on 12 May 2014 As chairman:... Kaare Smit

2 Contents Management's review 1 Company details 1 Financial highlights 2 Management's review 3 Statement by management on the annual report 5 Independent auditor's reports 6 Financial statements Income statement 7 Balance sheet 8 Statement of changes in equity 10 Notes Accounting policies 11 Revenue 15 Staff costs 15 Amortisation/depreciation of intangible assets and property, plant and equipment 15 Other operating expenses 15 Financial income 16 Financial expenses 16 Tax for the year 16 Intangible assets 16 Property, plant and equipment 17 Share capital 17 Provisions 17 Other payables 17 Contingent liabilities and other financial obligations 18 Related parties 18 Fee to the auditors appointed by the company in general meeting 18 /

3 Management's review Company details Address, Postal code, City Biogen Idec Allé 1, 3400 Hillerød CVR No Home Page Tel Telefax Supervisory board Executive board Auditors Inga Birgitte Thygesen, chairman Esther Maria Alegria Andrew Stober Andrew Stober PricewaterhouseCoopers, Statsautoriseret Revisionspartnerselskab Strandvejen 44, 2900 Hellerup Tel Telefax

4 continued - Management's review Financial highlights 5-year summary (in DKK thousands, except per share data): Key figures (in DKK thousands) Revenue Operating profit/loss Net financials Profit/loss for the year Balance sheet total Investments in property, plant and equipment Equity Average number of employees Financial ratios in % Gross margin 20,4 22,1 22,4 25,3 44,6 EBIT margin 12,9 10,0 12,1 10,6 28,0 Return on assets 3,6 1,8 1,2 1,0 3,1 Equity ratio 91,8 93,3 96,5 95,1 96,5 Return on equity 2,9 1,4 1,2 1,0 2,5 2

5 continued - Management's review Management's review The company's business review Biogen Idec (Denmark) Manufacturing ApS main activities are production of biotechnological drug substance, packaging, labeling and quality control. The company is part of US-based Biogen Idec Inc. working with development, manufacturing and marketing of innovative therapies for the treatment of neurodegenerative diseases, hemophilia and autoimmune disorders. Financial review The Company s income statement for the year ended 31 December 2013 shows a net profit of tdkk and the balance sheet at 31 December 2013 shows equity of tdkk In June 2013 the biotechnological production received licensure from the health authorities to be able to do commercial production. During the year the pharmaceutical production has increased significantly. The labelling and packaging and quality control activities continued to expand in During 2013, the Company employed an average of 483 full-time employees, compared to an average of 375 fulltime employees in The current year s revenue, DKK million, primarily derives from contract manufacturing fees related to bulk production and labeling and packaging of biological products, as well as related quality control activities. The net profit for the year is consistent with the expectations expressed at the beginning of the year. The increase in profit is primarily due to increase in revenue, noted above. Knowledge resources The Company is operating in the area of biotechnological products with a high degree of specialised knowledge. Production and infrastructure are subject to the health authorities strict product requirements relating to drugs for patient treatment purposes. Special risks For biotech companies the most significant risks relate to the generally large degree of uncertainty in relation to research and development of new products and the strong public regulations governing the industry, including the market conditions for sale of biotechnological products. Statutory CSR report Corporate, Environmental, and Social Responsibility (Statutory report on CSR for the financial year 2013, cf. Section 99a of the Danish Financial Statements Act) Biogen Idec is an active participant in Pharmaceutical Supply Chain Initiatives (PSCI), and supports the Principles, which align with international frameworks and standards, including the United Nations Global Compact. PSCI is a group of 14 major pharmaceutical companies that share a vision of better social, economic and environmental outcomes as documented in the Pharmaceutical Industry Principles for Responsible Supply Chain Management. Environmental Biogen Idec (Denmark) Manufacturing ApS works to ensure more sustainable production. The Company is subject to public regulations according to the Danish Environmental Protection Act, including regulations relating to discharge of waste water from production equipment and disposal of materials used in the production unit, labeling & packaging or laboratory. At group level, the Company is taking additional initiatives aimed at more sustainable consumption of energy and water, reuse of materials and environmentally-friendly disposal of waste. Human rights In every country where we operate, Biogen Idec follows all laws, regulations and international conventions related to human rights, including the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy and the Organization for Economic Co-operation and Development Guidelines for Multinational Enterprises. The expectation to adhere to laws and regulations is outlined in our Code of Business Conduct. Suppliers are also subject to our code. Additionally, we are working to improve the monitoring and enforcement of human rights in our supply chain through participation in the Pharmaceutical Supply Chain Initiative. 3

6 continued - Management's review Society We have not identified any operations with significant potential or actual negative impacts on local communities. At our major locations, we have procedures in place to help ensure that the impact of our operations on our local communities remains minimal. These include environmental assessments and traffic flow strategies. We also positively impact the communities where we live and work through our community programs. The company strives to be a good corporate citizen. In January 2014 it was announced that Biogen Idec is the second most sustainable company in the world according to the Global 100 rankings, an annual corporate sustainability assessment performed by the research firm Corporate Knights.. Biogen Idec has achieved listing on the Dow Jones Sustainability Index in the last three years in a row. The information on global strategies, commitments and efforts regarding social responsibility and sustainability are published in the Biogen Idec Annual report available at Biogen Idec Corporate Citizenship Report for 2013 is expected to be available at /corporate citizenship from July Account of the gender composition of management The supervisory board consist of 2 female (67%) and 1 male (33%). Since the supervisory board consist of 3 persons it is not possible to get a more equal composition between the genders and therefore we considered this to be equally represented. Going forward we expect an equal representation of genders to be continued. The site leadership team currently consists of 42% female and 58% male and the gender composition is therefore considered to be equally represented. Going forward we expect an equal representation of genders to be continued. Post balance sheet events Since the end of the financial year and until this date, there have been no events, which materially change the presentation of the annual report. Outlook It is expected that the activities in the labelling & packaging and associated quality functions will continue at approximately the same level, subject to demand-based fluctuations inherent in the biopharmaceutical industry. The biopharmaceutical production is expected to increase in 2014 since increased production facilities are expected taken into service in May

7 Statement by management on the annual report Today, management has discussed and approved the annual report of Biogen Idec (Denmark) Manufacturing ApS for the financial year 1 January - 31 December The annual report is prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the company's financial position at 31 December 2013 and of the results of the company's operations for the financial year 1 January - 31 December In our opinion, the management's review includes a fair review of the matters dealt with in the management's review. We recommend the adoption of the annual report at the annual general meeting. Copenhagen, 12 May 2014 Executive board: Andrew Stober Supervisory board: Inga Birgitte Thygesen chairman Esther Maria Alegria Andrew Stober 5

8 Independent auditor's reports To the shareholders of Biogen Idec (Denmark) Manufacturing ApS Report on financial statements We have audited the financial statements of Biogen Idec (Denmark) Manufacturing ApS for the financial year 1 January 31 December 2013, which comprise income statement, balance sheet, statement of changes in equity, notes and summary of significant accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. Management's responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing audit procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. The audit has not resulted in any qualification. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the company at 31 December 2013 and of the results of the company operations for the financial year 1 January - 31 December 2013 in accordance with the Danish Financial Statements Act. Statement on management's review We have read management's review in accordance with the Danish Financial Statements Act. We have not performed any procedures additional to the audit of the financial statements. On this basis, in our opinion, the information provided in management's review is consistent with the financial statements. Copenhagen, 12 May 2014 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Torben Jensen state authorised public accountant Rikke Lund-Kühl state authorised public accountant 6

9 Income statement for the year ended 31 December Notes Revenue Production costs Gross margin Administrative expenses Other operating expenses Operating profit/loss Financial income Financial expenses Pre-tax profit/loss Tax for the year Profit/loss for the year Recommended appropriation of the profit/loss for the year Retained earnings/accumulated loss

10 Balance sheet at 31 December Notes Assets Fixed assets Acquired intangible assets Intangible assets Land and buildings Other fixtures and fittings, tools and equipment Property, plant and equipment in progress Property, plant and equipment Other receivables Investments Total fixed assets Current assets Receivables from group entities Income taxes receivable Other receivables Receivables Cash Total current assets Total assets

11 Balance sheet at 31 December Notes Equity and liabilities Equity 11 Share capital Retained earnings Total equity Provisions Provisions for deferred tax Total provisions Liabilities Trade payables Payables to group entities Other payables Short-term liabilities Total liabilities Total equity and liabilities

12 Statement of changes in equity () Share capital Retained earnings/accumulated loss Total Balance at 1/ Profit/loss for the year, cf. appropriation of profit/loss Equity at 1/ Profit/loss for the year, cf. appropriation of profit/loss Extraordinary dividend distributed Equity at 31/

13 Notes 1. Accounting policies The annual report of Biogen Idec (Denmark) Manufacturing ApS has been presented in accordance with the provisions of the Danish Financial Statements Act as regards large reporting class C enterprises. The accounting policies applied by the company are consistent with those of last year. Omission to present a cash flow statement With reference to section 86(4) of the Danish Financial Statements Act, no cash flow statement has been prepared. The entity's cash flows are part of the consolidated cash flow statement for the parent company Biogen Idec Inc. Recognition and measurement in general The annual report has been prepared under the historical cost method. Revenues are recognised in the income statement as earned, which includes recognition of value adjustments of financial assets and liabilities measured at fair value or amortised cost. Furthermore, all costs incurred to achieve the earnings for the year are recognised in the income statement, including depreciation, amortisation, impairment losses and provisions as well as reversals due to changed accounting estimates of amounts that have previously been recognised in the income statement. Assets are recognized in the balance sheet when it is probable that future economic benefits attributable to the asset will flow to the Company and the value of the asset can be measured reliably. Liabilities are recognized in the balance sheet when it is probable that future economic benefits will flow out of the Company and the value of the liability can be measured reliably. Assets and liabilities are initially measured at cost. Subsequently, assets and liabilities are measured as described for each item below. Reporting currency The financial statements are presented in Danish kroner. Currency translation Transactions denominated in foreign currencies are translated into Danish kroner at the exchange rate at the date of the transaction. Receivables, payables and other monetary items denominated in foreign currencies are translated into Danish kroner at the exchange rate at the balance sheet date. Realised and unrealised exchange gains and losses are recognised in the income statement as financial income/expenses. Leases Leases concerning fixed assets which qualify for recognition as assets held under finance leases and where the entity bears all significant risks and enjoys all significant benefits associated with the title to such assets are treated according to the same accounting policies as are other fixed assets. On initial recognition, the cost of assets held under finance leases is measured at the lower of the fair value and the net present value of the lease payments, made up based on the interest rate implicit in the lease or, alternatively, the entity's borrowing rate. Commitments under finance leases are recognised in the balance sheet as a liability, and the interest element of the lease payment is recognised in the income statement. Leases in respect of which the entity does not bear all significant risks and enjoy all significant benefits associated with the title to the assets are considered operating leases. Payments under operating leases are recognised in the income statement over the term of the lease. 11

14 Notes 1. Accounting policies - continued Income statement Revenue Revenue include service fees for packing and labelling products to be distributed to group enterprises. Service fees are recognised exclusive of VAT. Income from the supply of services is recognised as revenue with reference to the stage of completion. Revenue is measured net of all types of discounts/rebates granted. Also, revenue is measured net of VAT and other indirect taxes charged on behalf of third parties. Other operating expenses Other operating income and operating expenses comprise items of a secondary nature relative to the entity's core activities, including gains or losses on the sale of fixed assets. Production costs Production costs comprise expenses incurred to pack and label the products. Production costs include materials, direct wages and production overheads such as maintenance costs, amortisation, depreciation etc. as well as expenses to operate, administer and manage the packing facilities. Research costs, development costs not satisfying the criteria for capitalisaion and amortisation/depreciation of capitalised development costs are also recognised under production costs. Furthermore, provisions for losses on construction contracts are recognised. Administrative expenses Administrative expenses include expenses incurred in the year for purposes of managing and administering the company, including expenses relating to administrative staff, management, office premises/expenses as well as amortisation/depreciation of assets used for administrative purposes. Amortisation/depreciation of intangible assets and property, plant and equipment The item comprises amortisation/depreciation of intangible assets and property, plant and equipment. Intangible assets are amortised on a straight-line basis over the expected useful life of each individual asset. The estimated useful lives for intangible assets are as follows: Useful life (year) Software 0-5 Property, plant and equipment are depreciated on a straight-line basis over the expected useful life of each individual asset. The depreciation basis is the cost plus revaluations. The expected useful lives of the assets are as follows: Useful life (year) Buildings Other fixtures and fittings, tools and equipment 6-20 Computer hardware 3-5 Financial income and expenses Financial income and expenses are recognised in the income statement at the amounts that relate to the reporting period. Net financials include interest income and expenses, realised and unrealised capital and exchange gains and losses on foreign currency transactions and surcharges and allowances under the advance-payment-of-tax scheme, etc. 12

15 Notes 1. Accounting policies - continued Tax Tax for the year includes current tax on the year's expected taxable income and the year's deferred tax adjustments. The portion of the tax for the year that relates to the profit/loss for the year is recognised in the income statement, whereas the portion that relates to transactions taken to equity is recognised in equity. The entity and its Danish group entities are taxed on a joint basis. The Danish income tax charge is allocated between profit-making and loss-making Danish entities in proportion to their taxable income (full allocation method). Balance sheet Intangible assets Other intangible assets include software. Other intangible assets are measured at cost less accumulated amortisation and impairment losses. Gains or losses on the sale of intangible assets are recognised in the income statement under 'Other operating income' or Other operating expenses', respectively. Gains and losses are calculated by reference to the difference between the selling price less selling expenses and the carrying amount at the time of sale. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. Gains or losses arising from the sale of items of property, plant and equipment are recognised in the income statement under 'Other operating income' or 'Other operating expenses', respectively. Gains and losses are calculated by reference to the difference between the selling price less selling expenses and the carrying amount at the time of sale. Impairment of fixed assets Every year, intangible assets and property, plant and equipment are reviewed for impairment. Where there is indication of impairment, an impairment test is made for each individual asset or group of assets, respectively, generating independent cash flows. The assets are written down to the higher of the value in use and the net selling price of the asset or group of assets (recoverable amount) if it is lower than the carrying amount. Receivables Receivables are measured at amortised cost, which usually corresponds to the nominal value. Provisions are made for bad debts on the basis of objective evidence that a receivable or a group of receivables are impaired. Provisions are made to the lower of the net realisable value and the carrying amount. Cash and cash equivalents Cash comprises cash balances and bank balances. Income tax Current tax payables and receivables are recognised in the balance sheet as the estimated tax charge in respect of the taxable income for the year, adjusted for tax on prior years' taxable income and tax paid on account. Provisions for deferred tax are calculated, based on the liability method, of all temporary differences between carrying amounts and tax values, with the exception of temporary differences occurring at the time of acquisition of assets and liabilities neither affecting the results of operations nor the taxable income, as well as temporary differences on non-amortisable goodwill. Deferred tax is measured according to the taxation rules and taxation rates in the respective countries applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. Deferred tax assets are recognised at the value at which they are expected to be utilised, either through elimination against tax on future earnings or through a set-off against deferred tax liabilities within the same jurisdiction. 13

16 Notes 1. Accounting policies - continued Segment information Segment information is given for revenue broken down by geographical segment. The segmentation is in accordance with the entity's internal financial management. Financial ratios Financial ratios are calculated in accordance with the Danish Society of Financial Analysts' guidelines on the calculation of financial ratios 'Recommendations and Financial Ratios 2010', cf. below: Definition of financial ratios: Gross margin: Gross margin / Revenue * 100 EBIT margin: Profit/loss from ordinary operating activites / Revenue * 100 Return on assets: Profit/loss from ordinary operating activites / Average assets * 100 Equity ratio: Closing equity / Equity & liabilities at year-end * 100 Return on equity: Profit/loss for the year / Average equity *

17 Notes Revenue Geographical segmentation of revenue: USA Europe Staff costs Analysis of staff costs: Wages/salaries Pensions Other social security costs Staff costs are recognised in the income statement under the following items, Production costs with DKK 371,252 thousand, Administrative expenses with DKK 44,642 thousand Number Number Average number of employees By reference to section 98b(3), (ii), of the Danish Financial Statements Act, remuneration to management is not disclosed. 4. Amortisation/depreciation of intangible assets and property, plant and equipment Amortisation of intangible assets Depreciation of property, plant and equpiment Amortisation/depreciation of intangible assets and property, plant and equipment are recognised in the income statement under the following items, Production costs with t.kr. 182,851 and Administrative expenses with t.kr. 12, Other operating expenses Other operating expenses include losses on the sale of property, plant and equipment, including other operating equipment. 15

18 Notes Financial income Interest receivable, group entities Other financial income Financial expenses Interest expenses, group entities Other financial expenses Tax for the year Deferred tax adjustments in the year Tax adjustments, prior years Intangible assets () Acquired intangible assets Cost Balance at 1/ Transfer from other accounts Cost at 31/ Amortisation and impairment losses Balance at 1/ Amortisation in the year 938 Amortisation and impairment losses at 31/ Carrying amount at 31/

19 Notes 10. Property, plant and equipment () Land and buildings Other fixtures and fittings, tools and equipment Property, plant and equipment in progress Total Cost Balance at 1/ Additions in the year Disposals in the year Transfer from other accounts Cost at 31/ Depreciation and impairment losses Balance at 1/ Depreciation in the year Reversal of depreciation and impairment losses, disposals Depreciation and impairment losses at 31/ Carrying amount at 31/ / / Share capital Analysis of the company's share capital, DKK 390 thousand: class Ashare(s) of DKK 100 each class Bshare(s) of DKK 100 each The company's share capital has remained DKK 390 thousand over the past 5 years. 12. Provisions The provision for deferred tax primarily relates to timing differences in respect of intangible assets and property, plant and equipment. 13. Other payables Other accrued expenses

20 Notes 31/ / Contingent liabilities and other financial obligations Other financial obligations Other rent and lease liabilities: Rent and lease liabilities Rent and lease liabilities concerning contracts which are interminable until 2013 with remaining contract terms of 1-5 years. 15. Related parties Information about related parties with a controlling interest: Related party Domicile Basis for control Biogen Idec Inc. Biogen Idec Inc., 14 Cambridge Center, Cambridge, MA 02142, USA Arrowpark Interseas Limited Sovereign House 14-16, Nelson Street Douglas, IM1 2AL, Isle of Man Biogen Idec Luxembourg Holding Sarl Biogen Idec (Denmark) New Manufacturing ApS Luxembourg Biogen Idec Allé 1, 3400 Hillerød, Denmark Participating interest Participating interest Participating interest Participating interest Information about consolidated financial statements: Parent Biogen Idec Inc. Domicile Biogen Idec Inc., 14 Cambridge Center, Cambridge, MA 02142, USA Requisitioning of the parent's consolidated financial statements The consolidated accounts of Biogen Idec Inc. can be obtained by written application to Biogen Idec Inc., 14 Cambridge Center, Cambridge, MA 02142, USA 16. Fee to the auditors appointed by the company in general meeting Fee for the statutory audit of the financial statements Fee for tax consultancy 0 30 Fee for other services