HALB¥ JAHRES¥ BERICHT 2012.

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(1)WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. HALBJAHRESBERICHT 2012..

(2) INHALTSVERZEICHNIS ACTELION HALBJAHRESBERICHT 2012. FINANCIAL REPORT. 02. 08. 03. 09. 06. Actelions Wertschöpfungsstrategie Übersicht über die Finanzlage. 10. 11. Unaudited Interim Consolidated Income Statements Unaudited Interim Consolidated Statements of Comprehensive Income Unaudited Interim Consolidated Balance Sheets. 12. 13. 14. Unaudited Interim Consolidated Statements of Cash Flows Unaudited Interim Consolidated Statements of Changes in Shareholders’ Equity Notes to the Unaudited Interim Consolidated Financial Statements. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. MANAGEMENT BERICHT. Actelion Halbjahresbericht 2012.

(3) ACTELIONS WERTSCHÖPFUNGSSTRATEGIE Actelions Strategie hat zum Ziel, aufbauend auf den zahlreichen Stärken des Unternehmens Mehrwert zu schaffen. Zu diesen Stärken zählen die globale Führungsrolle in der Therapie der pulmonalen arteriellen Hypertonie (PAH), eine starke und weltweit effizient operierende Verkaufsorganisation, die hochproduktive Forschungstätigkeit und eine einzigartige Unternehmenskultur, die darauf abzielt, innovative Medikamente bereitzustellen, die das Leben von Patienten verbessern. Die Kernelemente von Actelions Strategie bestehen darin, die PAH-Franchise zu stärken und zu erweitern, zusätzliche Spezialitäten-Franchisen aufzubauen, und die Rentabilität zu erhalten und zu steigern.. Actelion Halbjahresbericht 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. MANAGEMENTBERICHT.

(4) Managementbericht Financial Statements. 4. PAH-FRANCHISE STÄRKEN UND AUSBAUEN Actelion beabsichtigt, seine führende Rolle im Bereich PAH mit Tracleer ®, Ventavis® und der aktuell laufenden Einführung von Veletri® auf dem globalen Markt zu stärken. Das PAH-Portfolio des Unternehmens wird sich mit Macitentan und Selexipag, die sich derzeit beide in einem fortgeschrittenen Entwicklungsstadium befinden, weiter verändern. Die im April 2012 veröffentlichten positiven Ergebnisse der Morbiditäts-/Mortalitätsstudie für Macitentan, einem neuartigen dualen Endothelin-Rezeptor-Antagonisten, bieten einen soliden Ausgangspunkt für die nächste Entwicklungsstufe von Actelion. In der zulassungsrelevanten, auf klinische Ereignisse ausgerichteten Langzeitstudie SERAPHIN, bei der 742 Patienten mit PAH bis zu dreieinhalb Jahre lang behandelt worden waren, wurde der primäre Endpunkt erreicht. Im Verlauf der Studie konnten die Patienten zudem mit einer PAH-Basistherapie in Form eines PDE-5-Inhibitors oder oraler/inhalierter Prostanoide behandelt werden. Mit Macitentan konnte bei beiden verwendeten Dosierungen (3mg und 10 mg) das Risiko eines Morbiditäts-/Mortalitätsereignisses gegenüber Plazebo über den gesamten Behandlungszeitraum gesenkt werden. Das Risiko in der 10 mg-Gruppe wurde um 45 % verringert (p<0,0001). Bei 3 mg konnte eine Risikoabnahme von 30 % verzeichnet werden (p=0,0108). Die Behandlung mit Macitentan wurde in der SERAPHIN-Studie sehr gut vertragen. Das Unternehmen liegt im Zeitplan, das Gesuch um Zulassung des Arzneimittels bis zum 4. Quartal 2012 bei den Zulassungsbehörden weltweit einzureichen. Actelion ist gut aufgestellt, um mit Macitentan möglicherweise einen neuen Behandlungsstandard für PAH einzuführen.. AUFBAU ZUSÄTZLICHER SPEZIALITÄTEN-FRANCHISEN Als zweite Priorität möchte das Unternehmen auf der Grundlage vielversprechender Forschungs- und Entwicklungsprojekte und gestützt durch aktuelle Initiativen im Bereich Business Development mittelfristig einen ergänzenden Geschäftszweig auf dem Gebiet der Arzneimittelspezialitäten aufbauen. Mit dieser Massnahme soll das Wachstum gefördert und das Risiko gestreut werden. Mit der Ausrichtung seiner Forschungs- und Entwicklungsaktivitäten (F&E) auf seltene Krankheiten und Spezialindikationen will Actelion mittelfristig zusätzliche Franchisen auf dem Gebiet der Arzneimittelspezialitäten schaffen, die mit einem für ein Unternehmen seiner Grösse angemessenen kommerziellen Aufwand verbunden sind. Die Neuausrichtung der F&E-Aktivitäten dürfte sich in einem Rückgang der F&E-Ausgaben niederschlagen. Nach einer Überprüfung des Portfolios werden Projekte, die dieser Strategie nicht entsprechen, entweder eingestellt oder für eine Partnerschaft oder Auslizensierung vorbereitet. Die Umstrukturierung der Pipeline erfordert eine Neuausrichtung der Organisation, um die Allokation der Ressourcen zu optimieren.. Actelion Halbjahresbericht 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Zusätzlich zu Macitentan entwickelt Actelion Selexipag, die potenziell erste wirksame orale Therapie für die Behandlung von PAH auf der Grundlage von Prostazyklin. Selexipag wird aktuell in der Phase III-Studie namens GRIPHON untersucht, an der 1.150 Patienten teilnehmen sollen. Wie bei SERAPHIN, ist das Ziel dieser zulassungsrelevanten Studie, eine Verringerung des Risikos von Morbiditäts-/Mortalitätsereignissen nachzuweisen. Daten aus dieser Studie werden für 2014 erwartet; eine Zwischenauswertung ist für 2013 geplant. Im Erfolgsfall könnte diese Studie Actelion die Möglichkeit eröffnen, den Einsatz Prostazyklin-basierter Therapien bei der Behandlung von PAH erheblich auszuweiten..

(5) Managementbericht Financial Statements. 5. RENTABILITÄT HALTEN UND STEIGERN Eine gesunde finanzielle Basis ist die Voraussetzung, um die Möglichkeiten vollständig ausschöpfen zu können, die das Unternehmen mit Macitentan und Selexipag im Bereich PAH geschaffen hat. Aus diesem Grund hat das Unternehmen im Rahmen seiner Wertschöpfungsstrategie ein Kostensparprogramm lanciert, um so die Ertragskraft des Geschäfts zu optimieren. Mit dem Kostensparprogramm möchte das Unternehmen verschiedenen aktuellen Herausforderungen begegnen. Hierzu zählen die anhaltende Stärke des Schweizer Frankens, der zunehmende Wettbewerb in den Vereinigten Staaten und das schwierige Preis- und Rückerstattungsumfeld in Europa. Sofern keine unvorhergesehenen Ereignisse eintreten, erwartet das Unternehmen aufgrund seiner strategischen Neuausrichtung und der beschleunigten Auswirkungen des Kostensparprogramms für 2012 ein Wachstum des Kerngewinns im mittleren einstelligen Prozentbereich. Diese Guidance schliesst jegliche Auswirkungen aufgrund von Veränderungen bei den Rückstellungen für nicht gesicherte Forderungen in Südeuropa aus. Ausserdem geht das Unternehmen davon aus, dass der Kerngewinn in lokalen Währungen 2013 auf dem Niveau von 2012 gehalten werden kann und – sofern keine unvorhergesehenen Ereignisse eintreten – 2014 eine Rückkehr zu einstelligem Wachstum und 2015 zu zweistelligem Wachstum möglich ist.. DEM WACHSTUM VERPFLICHTET Wir sind davon überzeugt, dass Actelion auf der Grundlage des bestehenden Portfolios und der Kostensparmassnahmen, zu denen wir uns im Rahmen unserer Strategie verpflichtet haben, gut aufgestellt ist, um in Zukunft nachhaltige Kerngewinne und höhere Renditen für unsere Aktionäre zu erzielen.. Jean-Paul Clozel Chief Executive Officer. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Jean-Pierre Garnier Präsident des Verwaltungsrats. Actelion Halbjahresbericht 2012.

(6) Managementbericht Financial Statements. 6. ÜBERSICHT ÜBER DIE FINANZLAGE Finanzkennzahlen in Millionen CHF. Ergebnisse 1. Halbjahr 2012. Ergebnisse 1. Halbjahr 2011. in %. Produktumsatz. 861,8. 890,1. (3). Betriebsaufwand. 635,8. 1.193,0. (47). Betriebsgewinn (Verlust). 229,2. (223,1). –. Kerngewinn. 300,7. 266,7. 13. Reingewinn (Verlust). 173,7. (262,3). –. 1,46. (2,20). –. Verwässerter EPS in CHF. Im ersten Halbjahr 2012 belief sich der Produktumsatz auf CHF 861,8 Millionen. In lokalen Währungen entspricht dies einer Abnahme von 3 %. Veränderungen bei den Rückstellungen für nicht gesicherte Forderungen in Südeuropa, die sich aus einem signifikanten Rückgang der Forderungen ergaben, sowie die strikte Kostenkontrolle führten zu einem Anstieg des Kerngewinns um 14 % in lokalen Währungen (13 % in CHF) auf CHF 300,7 Millionen. Basierend auf diesen starken Halbjahresergebnissen und den beschleunigten Auswirkungen des kürzlich angekündigten Kostensparprogramms erhöht Actelion seine Prognose für den Kerngewinn für das Gesamtjahr 2012.. PRODUKTUMSÄTZE Die Auswirkungen der Wettbewerbssituation auf dem Gebiet der pulmonalen arteriellen Hypertonie (PAH) in den USA in Verbindung mit Preissenkungen in mehreren europäischen Märkten und Brasilien führten zu einem Rückgang des Produktumsatzes um 3 % in lokalen Währungen und in Schweizer Franken. Der gesamte Produktumsatz belief sich auf CHF 861,8 Millionen, im Vergleich zu CHF 890,1 Millionen in der Vorjahresperiode.. Der Umsatz von Tracleer sank um 4 % in lokalen Währungen und belief sich auf CHF 752,4 Millionen. Das zugrundeliegende Mengenwachstum (+ 2 %) wurde von Japan, Europa und anderen Märkten angetrieben. Der Umsatz für Ventavis lag bei CHF 56,1 Millionen. Dies bedeutet einen Rückgang um 8 % in lokalen Währungen, der vollständig auf die Abnahme der ausgelieferten Einheiten zurückzuführen ist. Veletri, das dritte Produkt in der PAH-Franchise, entwickelt sich weiterhin gut: der Umsatz im ersten Halbjahr 2012 stieg um 82 % in lokalen Währungen und erreichte CHF 11,4 Millionen. Zavesca verzeichnete mit einem Plus von 20% in lokalen Währungen starke Umsatzzuwächse. Das Unternehmen beobachtete eine kontinuierliche Zunahme in der Indikation Niemann-Pick Typ-C ausserhalb der USA. Die Zahl der behandelten Patienten stieg um 23%, während einige Patienten mit Morbus Gaucher-Typ-1 wieder zur Enzymersatztherapie (ERT) zurückkehrten. Das Unternehmen profitierte zudem von einem positiven Preiseffekt in den USA.. Actelion Halbjahresbericht 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Geographisch betrachtet, verringerte sich der Produktumsatz in den Vereinigten Staaten im Vergleich zum ersten Halbjahr 2011 um 8 % und in Europa um 1 %. In Japan stieg der Produktumsatz um 7 % und blieb in den übrigen Ländern konstant..

(7) Managementbericht Financial Statements. 7. BETRIEBSAUFWAND Mit dem kürzlich angekündigten Kostensparprogramm beabsichtigt Actelion, die Ausgaben für Forschung und Entwicklung (F&E) zu kürzen und die Fixkosten zu senken. Diese Massnahmen unterstreichen die Bemühungen des Unternehmens, Mehrwert für seine Aktionäre zu schaffen. Die damit verbundenen Umstrukturierungskosten werden in die Jahresrechnung für das Gesamtjahr 2012 eingehen. Diese Kosten werden jedoch nicht in der Berechnung des Kerngewinns berücksichtigt. In den ersten sechs Monaten 2012 stiegen die F&E-Ausgaben um 1 %. Darin enthalten ist eine Meilensteinzahlung in Höhe von USD 10 Millionen (CHF 9,1 Millionen) an Auxilium Pharmaceuticals, Inc. im Zusammenhang mit unserer Zusammenarbeit bei XIAFLEX in bestimmten Regionen. Die Aufwendungen für Verkauf, allgemeine und administrative Ausgaben beliefen sich in der ersten Jahreshälfte 2012 auf CHF 284,5 Millionen, ein Rückgang um 20%. Eine Verringerung der Rückstellungen für nicht gesicherte Forderungen in Südeuropa, niedrigere Rechtskosten sowie eine straffere Kostenkontrolle trugen zu diesem Rückgang bei. Der Netto-Ergebnis-Effekt aus der Verringerung der Forderungen in Südeuropa betrug im ersten Halbjahr etwa CHF 19 Millionen.. KERNGEWINN UND REINGEWINN Der Kerngewinn von Actelion stieg um 14 % in lokalen Währungen (13 % in CHF). Die operative Kerngewinnmarge der Gruppe liegt bei 35 %, was einer Steigerung um 5 % entspricht, die vor allem auf die oben genannten Anpassungen bei den Rückstellungen, Einsparungen durch Prioritätensetzung bei den Ressourcen und das laufende Kostensparprogramm zurückzuführen ist. Unter Ausschluss der Anpassungen bei den Rückstellungen für nicht gesicherte Forderungen ergab sich ein Anstieg um 6 % in lokalen Währungen.. Der vollständig verwässerte Gewinn pro Aktie stieg auf CHF 1,46 gegenüber einem Verlust pro Aktie in Höhe von CHF 2,20 in der Vorjahresperiode. Der Kerngewinn pro Aktie (Core EPS), der aktienbasierte Vergütungen sowie Abschreibungen und Amortisationen und andere Posten wie einmalige Meilensteinzahlungen und die Zinsen für die Rückstellung im Zusammenhang mit einem Rechtsfall ausschliesst, stieg um 14 % auf CHF 2,12.. AUSBLICK Actelion erwartet auch weiterhin, dass der Produktumsatz im Gesamtjahr 2012 im niedrigen einstelligen Bereich abnehmen wird. Basierend auf einer strengeren Kostenkontrolle und den beschleunigten Auswirkungen des Kostensparprogramms erhöht Actelion seine Prognose für den Gewinn des Gesamtjahres 2012. Unvorhersehbare Ereignisse und Veränderungen bei Rückstellungen für Forderungen in Südeuropa ausgeschlossen, geht Actelion davon aus, dass der Kerngewinn 2012 im mittleren einstelligen Prozentbereich wachsen wird.. Andrew J. Oakley CFO. Actelion Halbjahresbericht 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Der Reingewinn betrug CHF 173,7 Millionen, verglichen mit einem Verlust von CHF 262,3 Millionen im ersten Halbjahr 2011 (in den Zahlen von 2011 sind Rückstellungen für einen Rechtsstreit in Höhe von CHF 485,2 Millionen enthalten, die später reduziert wurden)..

(8) Product sales amounted to CHF 861.8 million, a decrease of 3% in local currencies, impacted by the US competitive environment and European austerity measures. Total operating expenses amounted to CHF 635.8 million compared to CHF 1,193 million during the same period in 2011. The main reason for the decrease is the litigation provision incurred during the first half of 2011 alongside a partial reversal of doubtful debt provisions and tight cost control. Core earnings, defined as product sales less cash opex1, amounted to CHF 300.7 million, which represents an increase of 14% in local currencies. Net income for the period was CHF 173.7 million compared to a net loss of CHF 262.3 million in 2011. This translates into fully diluted earnings per share of CHF 1.46. 1. Cash opex exclude depreciation and amortization, stock option expenses as well as other exceptional items that may distort comparison.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. FINANCIAL REPORT.

(9) Management Review Financial Statements. 9. INTERIM CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENTS Six months ended June 30, (in CHF thousands, except per share amounts). Notes. 2012. 2011. (unaudited). (unaudited). 861,782. 890,134. Net revenue Product sales. 15. Contract revenue. 15. Total net revenue. 3,237. 79,783. 865,019. 969,917. Cost of sales. 99,670. 101,676. Research and development. 232,140. 228,729. Selling, general and administration. 284,495. 357,433. 19,496. 19,933. Amortization of acquired intangible assets Litigation provision. -. 485,205. Total operating expenses. 10. 635,801. 1,192,976. Operating income. 229,218. (223,059). Interest income Interest on litigation Interest expense on bonds. 1,150. 4,599. 10. (20,544). (5,826). 9. (5,987). (9,631). Interest expense. (454). (1,111). Impairment on financial assets. 7. (348). (3,038). Other financial income (expense), net. 7. 3,358. 4,795. 206,393. (233,271). Income before income tax expense Income tax expense. (32,655). (28,996). Net income (loss). 173,738. (262,267). 1.48. (2.20). 117,039. 119,306. 1.46. (2.20). 118,625. 119,306. 12,103. 17,654. Basic net income (loss) per share. 5. Weighted-average number of common shares (in thousands) Diluted net income (loss) per share Weighted-average number of common shares (in thousands) 1. 5. Includes stock-based compensation as follows:. Research and development Selling, general and administration. 12,852. 25,464. Total stock-based compensation. 24,955. 43,118. The accompanying notes form an integral part of these consolidated financial statements.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Operating expenses 1.

(10) Management Review Financial Statements. 10. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Six months ended June 30, (in CHF thousands). Net income (loss). 2012. 2011. (unaudited). (unaudited). 173,738. (262,267). (7,335). (34,158). Other comprehensive income (loss), net of tax Foreign currency translation adjustments Amortization of components of net periodic benefit costs Unrealized gain (loss) on marketable securities Other comprehensive income (loss), net of tax Comprehensive income (loss). 228. 819. -. (734). (7,107). (34,073). 166,631. (296,340). WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. The accompanying notes form an intergral part of these consolidated financial statements.. Actelion Half Year Report 2012.

(11) Management Review Financial Statements. 11. CONSOLIDATED BALANCE SHEETS. (in CHF thousands, except number of shares). Notes. June 30, 2012. December 31, 2011. (unaudited). (audited). 804,020. 1,281,037. 200,747. 50,000. Assets Current assets Cash and cash equivalents. 6. Short-term deposits Derivative instruments. 7. 674. 1,457. Marketable securities. 7. -. 5,520. Trade and other receivables, net. 8. 492,206. 536,481. Inventories. 57,518. 63,859. Other current assets. 24,578. 33,811. 7,083. 9,952. 1,586,826. 1,982,117. Deferred tax assets, current portion Total current assets Restricted cash for litigation. 7/10. Property, plant and equipment, net Other non-current assets. 7. Intangible assets, net Goodwill. 3. Deferred tax assets, less current portion. 378,880. -. 414,817. 424,659. 27,856. 23,385. 188,480. 204,267. 75,319. 74,940. 19,139. 22,710. 2,691,317. 2,732,078. Trade and other payables. 111,393. 101,781. Accrued expenses. 316,031. 365,467. 4,026. 10,135. Total assets Liabilities and shareholders’ equity. Deferred revenue, current portion Other current liabilities. 3. Total current liabilities Deferred revenue, less current portion Other non-current liabilities Litigation provision Long-term financial debt Pension liability. 49,448. 442,526. 526,831. 4,048. 4,843. 3. 24,351. 18,014. 10. 431,027. 404,696. 9. 235,505. 235,578. 11. 24,722. 31,271. Deferred tax liabilities Total liabilities Shareholders’ equity. 11,076. 389. 391. 1,162,568. 1,221,624. 12. Common shares (par value CHF 0.50 per share, authorized 185,598,470 and 185,735,290 shares; issued 131,060,350 and 130,464,351 shares in 2012 and 2011, respectively). 65,530. 65,232. Additional paid-in capital. 1,091,071. 1,213,004. Accumulated profit. 1,300,236. 1,126,498. (726,093). (699,392). Treasury shares, at cost Accumulated other comprehensive income (loss). 13. (201,995). (194,888). Total shareholders’ equity. 1,528,749. 1,510,454. Total liabilities and shareholders’ equity. 2,691,317. 2,732,078. The accompanying notes form an integral part of these consolidated financial statements.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Current liabilities.

(12) Management Review Financial Statements. 12. CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended June 30, 2012. 2011. (unaudited). (unaudited). 173,738. (262,267). Depreciation and amortization. 40,751. 41,190. Stock-based compensation, incl. treasury shares to members of Board of Directors. 25,257. 45,275. Excess tax benefits from share-based payment arrangements. (2,312). (847). Deferred revenue. (3,245). (79,439). (14,274). 7,969. 1,309. 3,377. (in CHF thousands). Cash flow from operating activities Net income (loss) Adjustments to reconcile net income to net cash provided from operating activities:. (Gains) Losses on derivative instruments (Gains) Losses on marketable securities, incl. other-than-temporary impairment Interest expense on bonds Trade and other receivables. 5,987. 9,631. 42,152. (51,768). Inventories. 6,333. (128). Other assets. 9,005. 8,552. 10,352. (2,377). (34,211). 435,168. Trade and other payables Other liabilities Changes in other operating cash flow items Net cash flow provided by (used in) operating activities. (6,946). (1,976). 253,896. 152,360. Cash flow from investing activities Restricted cash for litigation. (370,588). -. Purchase of short-term and long-term deposits. (350,747). (50,000). Proceeds from short-term and long-term deposits. 200,000. 150,000. Purchase of property, plant and equipment. (19,851). (52,799). Proceeds from marketable securities. 4,179. 2,346. Purchase of intangible assets. (2,804). (3,046). Purchase of other non-current assets. (4,536). -. Acquisition of a business, incl. deferred consideration payments Net cash flow provided by (used in) investing activities. (18,200). (18,375). (562,547). 28,126. (93,686). (95,316). Dividend payment Payments on capital leases Proceeds from exercise of stock options, net of expense Purchase of treasury shares Excess tax benefits from share-based payment arrangements Net cash flow provided by (used in) financing activities Net effect of exchange rates on cash and cash equivalents. (31). (42). 11,357. 11,165. (89,438). (37,698). 2,312. 847. (169,486). (121,044). 1,120. (17,181). Net change in cash and cash equivalents. (477,017). 42,261. Cash and cash equivalents at beginning of period. 1,281,037. 1,195,945. 804,020. 1,238,206. Cash and cash equivalents at end of period The accompanying notes form an intergral part of these consolidated financial statements.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Cash flow from financing activities.

(13) Management Review Financial Statements. 13. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY. Common shares (in CHF thousands, except number of shares). At January 1, 2011. Shares. Amount. Additional paid-incapital. 119,366,427. 64,912. 1,209,857. Accumulated profit. Treasury shares. Accum. other comprehensive incom (loss). Shareholders’ equity. 1,272,817. (592,461). (159,921). 1,795,204. Comprehensive income (loss), net of tax: Net income (loss). (262,267). (262,267). Other comprehensive income (loss). (34,073). Comprehensive income (loss), net of tax Excess tax benefit and underrealization from share-based payment arrangements Exercise of stock options Transactions in treasury shares. 496,409. 248. (720,450). Dividend payment 119,142,386. 516. 516. 10,917. 11,165. (223). Stock-based compensation expense At June 30, 2011 (unaudited). (34,073) (296,340). 65,160. (35,318). (35,541). 43,060. 43,060. (95,316). (95,316). 1,168,811. 1,010,550. (627,779). (193,994). 1,422,748. Comprehensive income (loss), net of tax: Net income (loss). 115,948. 115,948. Other comprehensive income (loss). (894). Comprehensive income (loss), net of tax Excess tax benefit and underrealization from share-based payment arrangements Exercise of stock options Transactions in treasury shares. 143,367. 72. (2,167,633). (626). (626). 3,006. 3,078. 6. Stock-based compensation expense At December 31, 2011 (audited). (894) 115,054. (71,613). (71,607). 41,807 117,118,120. 65,232. 1,213,004. 41,807 1,126,498. (699,392). (194,888). 1,510,454. Comprehensive income (loss), net of tax: Net income (loss). 173,738. 173,738. Other comprehensive income (loss). (7,107). 166,631. Excess tax benefit and underrealization from share-based payment arrangement Exercise of stock options Transactions in treasury shares. 595,999. 298. (1,387,562). Dividend payment 116,326,557. (1,777). 11,059. 11,357. (62,435). Stock-based compensation expense At June 30, 2012 (unaudited). (1,777). 65,530. (26,701). (89,136). 24,906. 24,906. (93,686). (93,686). 1,091,071. 1,300,236. (726,093). (201,995). 1,528,749. The accompanying notes form an integral part of these consolidated financial statements.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Comprehensive income (loss), net of tax. (7,107).

(14) Management Review Financial Statements. 14. NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CHF thousands, except share and per share amounts). NOTE 1. BASIS OF PRESENTATION The unaudited condensed interim consolidated financial statements for Actelion Ltd (“Actelion” or the “Group”) have been prepared under Generally Accepted Accounting Principles in the United States (“US GAAP”) for interim financial information. Accordingly, such financial statements do not include all the information and footnotes required by US GAAP for annual financial statements. These interim financial statements should be read in conjunction with the audited consolidated financial statements of the Group for the year ended December 31, 2011. All amounts are presented in Swiss francs (“CHF”) unless otherwise indicated.. NOTE 2. ADOPTION OF NEW ACCOUNTING POLICIES. As of January 1, 2012, the Group adopted prospectively ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs, (“ASU 2011-04”), an update to ASC 820, Fair Value Measurement. For current US GAAP preparers many of the amendments clarify currently existing concepts and provide additional application guidance on existing fair value measurement and disclosure requirements. In particular, such amendments specify that: a) the concepts of highest and best use and valuation premise in a fair value measurement are only relevant when measuring the fair value of non-financial assets; b) that the fair value of own equity instruments should be determined from the perspective of a market participant that holds such instruments as assets; and c) that the existing disclosures about the unobservable inputs used in Level 3 fair value measurements should be quantitative. ASU 2011-04 also introduced two significant changes to the existing accounting guidance related to changes in the fair value measurements of financial instruments managed within a portfolio and to the application of premiums or discounts in the absence of Level 1 inputs. It permits entities that manage their financial instruments on the basis of net exposure to also measure the fair value of such instruments on net basis and prohibits the usage of blockage factors based on the transaction quantity of the instruments measured at fair value. The revised guidance also significantly expands the disclosures required for fair value measurements using Level 3 inputs including information about the valuation processes used by a reporting entity and the sensitivity of fair value measurements to changes in unobservable inputs. ASU 2011-04 became effective for public entities during annual and interim reporting periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on the Group’s financial position, results of operations and cash flows. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. As of January 1, 2012, the Group applied retrospectively the requirements of ASU 2011-05, Presentation of Comprehensive Income, (“ASU 2011-05”), an update to the Comprehensive Income Topic of FASB ASC (“ASC 220”) and ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income (“AOCI”) in ASU 2011-05. ASU 2011-05 increased the prominence of items reported under other comprehensive income and eliminated the option to present elements of other comprehensive income as part of the statement of changes in stockholders’ equity. It requires an entity to present all non-owner changes in stockholders’ equity either in a single continuous statement of comprehensive income or in two separate but consecutive statements. For public entities, the provisions of both accounting standard updates became effective for annual and interim reporting periods beginning after December 15, 2011. As the amended guidance only clarified the presentation of items reported in other comprehensive income but did not change their nature, recognition, measurement or reclassification requirements, the adoption of ASU 2011-05 and ASU 2011-12 did not have a material impact on the Group’s financial position, results of operations and cash flows..

(15) Management Review Financial Statements. 15. NOTE 3. ACQUISITIONS AND GOODWILL GeneraMedix In 2009, in conjunction with the acquisition of epoprostenol sodium with improved thermal stability from privately-held GeneraMedix Inc. (“GXI”), the Group assumed a contingent consideration related to future patent issuance events in various markets and thus is re-measured at fair value at each reporting date using Level 3 inputs. As of June 30, 2012, the fair value of the contingent consideration amounts to CHF 17.7 million (USD 18.5 million). Thereof, CHF 2.3 million (USD 2.4 million) are included in other current liabilities and CHF 15.4 million (USD 16.1 million) are disclosed as other non-current liabilities. Compared to December 31, 2011, the fair value of the contingent consideration has increased by CHF 0.3 million (USD 0.3 million) due to accretion of contingent consideration expense mainly driven by changes in the discount rate and timing estimates and by CHF 0.3 million due to effects of foreign currency translation. The fair value changes of the contingent consideration are included in selling, general and administration expenses. The maximum undiscounted amount of the contingency remains unchanged at USD 20 million (CHF 19.1 million) and is expected to be paid in 2012 and in 2013.. December 31, 2011. Contingent consideration expense. Foreign currency translation. June 30, 2012. USD. CHF. USD. CHF. CHF. USD. CHF. 18,258. 17,153. 285. 268. 297. 18,543. 17,718. In determining the fair value of the contingent consideration the Group considered present value calculations of the expected cash-outflows as well as probabilities of amounts and timing of settlement of the contingencies. At June 30, 2012, and December 31, 2011, the Group applied a discount rate of 6.22% and 7.18%, respectively. This discount rate corresponds to the Bloomberg Composite US Industrial BB yield, which management believes is equivalent to a market participant’s cost of borrowing. In addition, management relies on input from internal and external patent lawyers as well as latest available information on status of procedures and actions from the respective patent offices to estimate the probability and timing of occurrence of patent issuance events. The following table outlines the significant unobservable inputs used in the fair value measurement of the contingent consideration as of June 30, 2012:. Range (weighted average). Contingent consideration arising from acquisitions. Valuation technique. Unobservable input Probability of patent issuance. Discounted cash flows. Period of patent issuance Discount rate. June 30, 2012 December 31, 2011 100%. 100%. 2012–2013. 2012–2013. 6.22%. 7.18%. A decrease of the probability of patent issuance could lead to a significantly lower fair value measurement of the contingent consideration in the period of revaluation. An issuance of a final negative office action from any of the patent offices concerned would lead to a decrease of that probability to 0% and de-recognition of the respective portion of the contingent consideration. Similarly, a significant delay in patent office procedures or significant increase of the discount rate could lead to a significant decrease in the fair value measurement of the contingent consideration in the period of revaluation. Except for the case of final patent rejection, none of the changes in the unobservable inputs would lead to a change of the maximum undiscounted amount of the contingency of USD 20 million.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Level 3 fair value measurement.

(16) Management Review Financial Statements. 16. Goodwill Except for the effect of foreign currency translation, the net carrying amount of goodwill has not been adjusted in the current reporting period. The following table summarizes the changes in 2012: Balance at January 1 74,940. Translation effects 379. Balance at June 30 75,319. NOTE 4. COLLABORATIVE AGREEMENTS Collaborative agreements with third parties represent the Group’s major agreements with multiple elements. The significant deliverables generally include license fees and milestone payments, which are recognized as contract revenue when the services are performed and collectibility is reasonably assured. License fees are treated as separate units of accounting only if upon careful evaluation of the facts and circumstances in the individual contracts it has been determined that they have a standalone value to the customer. The assessment of standalone value depends on the customer’s ability to recover a substantial portion of the consideration paid to the Group either through resale or use. Revenue from non-refundable, upfront license fees and performance milestones where the Group has continuing involvement is recognized ratably over the estimated performance or agreement period, depending on the terms of the agreement. The recognition of revenue is prospectively adjusted for subsequent changes in the development or agreement period. Revenue associated with performance milestones where the Group has no continuing involvement or service obligation is recognized upon achievement of the milestone. Payments received in excess of amounts earned are classified as deferred revenue until earned.. Payments made to acquire individual research and development (“R&D”) assets, including those payments made under licensing or collaborative agreements, that are deemed to have an alternative future use or are related to proven products are capitalized as intangible assets. Payments made to acquire individual R&D assets that do not have an alternative future use, are expensed as R&D costs. R&D costs for services rendered under collaborative agreements are charged to expense when incurred. Reimbursements for R&D activities received from other collaborators are classified as reduction of the Group’s R&D expense.. On February 23, 2012, the Group entered into a long-term collaborative agreement with Auxilium Pharmaceuticals, Inc. (NASDAQ: AUXL or “Auxilium”) to develop, supply and commercialize Xiaflex® (collagenase clostridium histolyticum), a novel biologic for the potential treatment of Dupuytren’s contracture and Peyronie’s disease. Xiaflex® is approved by the US Food and Drug Administration (“FDA”) and by the European Medicines Agency (“EMA”) as treatment for Dupuytren’s contracture and is in development in Japan. In addition, the product is also being evaluated under two global Phase III development programs for the potential treatment of Peyronie’s disease where Auxilium recently announced positive top-line data. Under the terms of the agreement, the Group received exclusive rights to commercialize Xiaflex® for the treatment of Dupuytren’s contracture and Peyronie’s disease in Canada, Australia, Brazil and Mexico upon receipt of the respective regulatory approvals. The Group will be primarily responsible for the applicable regulatory and commercialization activities for Xiaflex® in these countries. Auxilium will remain primarily responsible for the global development of Xiaflex® in Peyronie’s disease and will be responsible for all clinical and commercial drug manufacturing and supply. The Group. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Following the guidance codified in the Collaborative Arrangements Topic of FASB ASC (“ASC 808”) the Group presents the result of activities for which it acts as the principal on a gross basis and reports any payments received from (made to) other collaborators based on other applicable GAAP. The Group’s accounting policy for its qualifying collaborative agreements is to evaluate amounts due from (owed to) other collaborators based on the nature of each separate activity..

(17) Management Review Financial Statements. 17. will be responsible for clinical development activities and associated costs corresponding to any additional trials required for specific territories. Upon signature of the agreement, the Group made an upfront payment of USD 10 million (CHF 9.1 million), which has been recorded as R&D expense. Upon achievement of specific regulatory, pricing and sales milestones Auxilium is eligible to receive payments totaling up to USD 58.5 million. Auxilium will also receive increasing tiered double-digit royalties based on sales of Xiaflex® in Actelion’s territories and will supply the product to the Group at a predetermined cost. As of June 30, 2012, there were no further payments received from (paid to) or amounts due from (payable to) Auxilium. On July 9, 2012, Auxillium announced that it was granted an approval by Health Canada for Xiaflex® for the treatment of Dupuytren’s contracture. Subsequently, the regulatory sponsorhsip of the dossier will be transferred to the Group, which will be responsible for further applicable regulatory and commercialization activities in Canada. Pursuant to the terms of the agreement, the first regulatory milestone has been achieved. The Group will pay USD 0.5 million, which in accordance with its policy will be capitalized and amortized on a straight-line basis over the expected use of the intangible asset.. In 2008 the Group entered into an exclusive worldwide collaboration agreement (excluding Japan) with GlaxoSmithKline (“GSK”) to develop and commercialize the Group’s almorexant, a dual orexin receptor antagonist in Phase III development for treatment of primary insomnia. The Group received an upfront payment of CHF 150 million which has been deferred and amortized over the estimated development period. On January 28, 2011, the Group and GSK announced that clinical development of almorexant has been discontinued. This decision followed a review of data from additional clinical studies, which were conducted to further establish the clinical profile of almorexant, including the tolerability profile. As of March 31, 2011, the Group determined that it has fulfilled all performance obligations related to the upfront payment and the unamortized deferred revenue balance of CHF 76.5 million has been recognized as contract revenue. Both companies will continue to work on the discovery and development of new orexin receptor antagonist therapies based on the orexin alliance formed in July 2008.. Basic and diluted earnings per share (“EPS”) are based on weighted-average common shares and exclude shares that would have an anti-dilutive effect. For the six months ended June 30, 2012 and 2011, 14,579,467 and 20,863,463 antidilutive shares were excluded from the EPS calculation, respectively. In accordance with ASC 260-10-45-19, the Group did not consider any potential common shares in the computation of diluted EPS as of June 30, 2011, due to the loss from continuing operations. The following table sets forth the basic and diluted earnings per share calculations: June 30, 2012 Basic. June 30, 2011. Diluted. Basic. Diluted. Numerator Net income (loss). 173,738. 173,738. (262,267). (262,267). Net income (loss) available for earnings per share calculation. 173,738. 173,738. (262,267). (262,267). 117,039,276. 117,039,276. 119,305,810. 119,305,810. Denominator Weighted-average number of common shares Incremental shares for assumed conversion: Share options Total average equivalent shares Earnings (loss) per share. -. 1,585,705. -. -. 117,039,276. 118,624,981. 119,305,810. 119,305,810. 1.48. 1.46. (2.20). (2.20). Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. NOTE 5. EARNINGS PER SHARE.

(18) Management Review Financial Statements. 18. NOTE 6. CASH AND CASH EQUIVALENTS Cash and cash equivalents consisted of the following at: June 30, 2012. December 31, 2011. 800,042. 1,276,436. Cash 1 Short-term bank deposits Total 1. 3,978. 4,601. 804,020. 1,281,037. Includes CHF 0.6 million pledged for an unused credit line of CHF 5 million (December 31, 2011 - CHF 0.5 million).. In 2012, in conjunction with the Asahi litigation, the Group was required to pledge USD 375 million in cash or investments to secure surety bonds posted as collateral at the California Court of Appeal, US, in order to securitize the awards granted to Asahi by the State Court in California, US – See Note 10. Commitments, contingencies and guarantees. Consequently, the Group re-classified the restricted amounts from cash to long-term restricted cash for litigation – See Note 7. Financial assets and liabilities.. NOTE 7. FINANCIAL ASSETS AND LIABILITIES The information about Group’s financial assets and liabilities reflects the requirements of the Fair Value Measurements and Disclosures Topic of FASB ASC (“ASC 820”) as well as of the Investments – Debt and Equity Securities Topic of FASB ASC (“ASC 320”). Transfers between Level 1, 2 or 3 within the fair value hierarchy are recognized at the end of the reporting period when the respective transaction occurred. The following table states Group’s financial assets and liabilities carried at fair value: June 30, 2012. December 31, 2011. Total. Level 1. Level 2. Total. Level 1. Level 2. 804,020. 804,020. -. 1,281,037. 1,281,037. –. 674. -. 674. 1,457. –. 1,457. -. -. -. 5,520. 5,520. –. 378,880. 378,880. -. -. -. -. 1,183,574. 1,182,900. 674. 1,288,014. 1,286,557. 1,457. 7,629. -. 7,629. 22,687. –. 22,687. 22,687. –. 22,687. Cash and cash equivalents Derivative financial instruments Debt securities 2 Restricted cash for litigation Total Financial liabilities carried at fair value1 Derivative financial instruments 3 Contingent consideration Total 1 2 3. See Note 3. Acquisitions for Level 3 disclosures 7,629. -. 7,629. For the six months ended June 30, 2012, no transfers to or from Level 1 and Level 2 took place. Included in marketable securities. Included in other short-term liabilities.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Financial assets carried at fair value1.

(19) Management Review Financial Statements. 19. Derivative financial instruments A significant portion of the Group’s operations is denominated in foreign currencies, principally in US Dollars, Euros and Yen. Exposures to fluctuations in foreign currencies and interest rates may adversely impact the Group’s net income and net assets. Derivative financial instruments are deployed to partially offset these risks and are not used for speculative purposes. The Group records all derivatives on the balance sheet at fair value with changes in fair value reported in other financial income (expense), net. The Group’s derivative instruments, while providing economic hedges under the Group’s policies, do not qualify for hedge accounting as defined by the Derivatives and Hedging Topic of FASB ASC (“ASC 815”). The Group determines the fair value of its derivative contracts based on observable inputs, which include foreign exchange rates, counterparty information and other related inputs. Changes in the fair value of all derivative instruments are recognized immediately in other financial income (expense) in the consolidated income statement. Fair value amounts recognized for the right to reclaim and the obligation to return cash collateral arising from derivative instruments recognized at fair value and executed with the same counterparty under a master netting arrangement are not offset. The following tables reflect the contract or underlying principal amounts and fair values of derivative financial instruments analyzed by type of contract as of June 30, 2012 and 2011. Contract or underlying principal amounts indicate the volume of outstanding positions at the balance sheet date and do not represent amounts at risk.. Contract or underlying principal amount. Location of gain or (loss) recognized in income on derivatives. Amount of gain recognized in income on derivatives. Amount of (loss) recognized in income on derivatives. Forward rate contracts. 224,295. Other financial income (expense), net. 15,866. (13,848). Total. 224,295. 15,866. (13,848). 33,198. (9,069). 33,198. (9,069). Derivative financial instruments not designated as hedging instruments June 30, 2012. June 30, 2011 Forward rate contracts. 285,116. Total. 285,116. Derivative financial instruments not designated as hedging instruments. Other financial income (expense), net. Asset derivatives Balance Sheet location. Liability derivatives Fair value. Balance Sheet location. 674. Other current liabilities. Fair value. Forward rate contracts. Derivative instruments. Total. 674. 7,629 7,629. December 31, 2011 Forward rate contracts Total. Derivative instruments. 1,457 1,457. Other current liabilities. 22,687 22,687. As of June 30, 2012 and 2011, all foreign currency forwards are privately negotiated OTC contracts with maturities of twelve months or less and entered into with counterparties with a minimum Standard & Poor’s (“S&P”) credit rating of A+. The Group determines the fair value of these derivative contracts using an income-based industry standard valuation model which utilizes counterparty information and other observable inputs, which include foreign currency spot rates, forwards points and stated maturities.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. June 30, 2012.

(20) Management Review Financial Statements. 20. Derivative financial instruments include gross unrealized gains of CHF 14.3 million (December 31, 2011: gross unrealized losses of CHF 56.5 million), all related to foreign currency transactions, which have been recorded in other financial income (expense), net. Credit and interest rate risk related to derivative and money market instruments The Group is exposed to credit losses in the event of non-performance by counterparties, which are creditworthy financial institutions with S&P credit ratings as of June 30, 2012, in a range from A to AA+ and partially protected by a Swiss state guarantee or owned by such public authorities. The Group has not experienced any credit loss in the past and believes that the risk of loss related to counterparties in derivative contracts and money market instruments is remote. In addition, the Group reviews on an ongoing basis the creditworthiness of counterparties to foreign exchange and interest rate agreements. The Group has not experienced and does not expect to incur any significant losses from failure of counterparties to perform under these agreements. For concentrations of credit risk related to the Group’s investments in money market instruments and derivatives - See Note 14. Concentrations.. Marketable securities Debt securities At December 31, 2011, the Group held Greek zero-coupon bonds with maturities from December 2012 to December 2013 with a face value of EUR 18.5 million and a fair value of EUR 4.5 million. The bonds were received in conjunction with the settlement of the Greek hospital debt for the years 2007 to 2009 (See Note 8. Financial assets and liabilities in the Group’s audited consolidated financial statements for the year ended December 31, 2011), classified as available-for-sale (“AFS”) and recorded under short-term marketable securities.. In addition, in the first quarter of 2012 the Group recognized an other-than-temporary impairment of EUR 0.3 million (CHF 0.4 million), which is presented in a separate line in the income statement. In the second quarter of 2012 the Group sold all PSI bonds and EFSF notes and received cash proceeds of EUR 3.5 million (CHF 4.2 million), which are recorded within the investing section of the consolidated statements of cash flows. In conjunction with the sale, the Group realized a loss of EUR 0.4 million (CHF 0.5 million). Transaction costs were immaterial.. Restricted cash for litigation In January 2012, in conjunction with the Asahi litigation, certain insurance companies issued USD 623.6 million in surety bonds which were posted as collateral at the California Court of Appeal, US, in order to securitize the awards granted to Asahi by the State Court in California, US – See Note 10. Commitments, contingencies and guarantees. In return, the Group was required to pledge USD 375 million in cash or investments or their equivalent in other currencies in order to secure the surety bonds. As of June 30, 2012, the Group has pledged USD 250 million and CHF 140 million in cash as collateral. Consequently, the Group re-classified the restricted amounts from cash to long-term restricted cash for litigation. As the interest accruing on the deposit accounts is at market rates, not restricted and can be used by the Group at any time, the fair value of the restricted cash for litigation is determined using Level 1 inputs. The amount of cash collateral required could change depending on the progress of the appeal procedures and currency exchange fluctuations.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. In conjunction with the Greek bail-out and following the February 21, 2012, Eurogroup statement (referred to as “private sector involvement” or “PSI”) Greece provided an offer to all private bond holders to exchange Greek-law governed bonds issued prior to December 31, 2011 for PSI bonds and notes guaranteed by the European Financial Stability Facility (“EFSF”) having a face value of 46.5% of the face value of the exchanged bonds. Actelion did not consent to the offer. With the agreement of more than 95% of the private bond holders, Greece activated an aggregate collective action clause on March 12, 2012, and forced an exchange of the 2012-2013 bonds for PSI bonds and EFSF notes. The Group realized a loss of EUR 0.4 million (CHF 0.5 million) upon exchange, which has been recorded in other financial income (expense), net. As the settlement of the 2012-2013 bonds with new debt instruments represents a cashless exchange of assets, the transaction did not have an impact on the consolidated statements of cash flows..

(21) Management Review Financial Statements. 21. Investment in associated companies On February 27, 2012, the Group acquired 20.1% of privately-held EchoSense Inc., Tortola, British Virgin Islands (“The Company” or “EchoSense”) for a cash consideration of USD 5.1 million (CHF 4.5 million). EchoSense is a medical device company which develops novel non-invasive and non-imaging ultrasound Doppler and signal processing technologies capable of extracting parametric information regarding both the coronary arteries and the pulmonary system, including but not limited to pulmonary blood pressure measurements. EchoSense is currently conducting clinical studies with its portable, non-invasive ultrasound system having graphic and numeric (parametric) outputs that serve to diagnose and evaluate, in real time, the state of different cardiac and pulmonary diseases and thus improve treatment. In addition, the Group can at its option increase its investment in the common stock of EchoSense depending on the success of the ongoing clinical studies up to 31.1%. In accordance with its accounting policy for investments in common stock, where the Group can exercise significant influence over the operations of the investee (generally between 20%50% of the voting rights), the Group applied the equity method and recorded the investment at cost as other non-current assets. The Group adjusts quarterly the carrying amount of the investment in order to reflect its share of the earnings (losses) of the Company. As of June 30, 2012, the Group has recognized its share of loss of USD 0.2 million (CHF 0.2 million), which has been classified as other income (expense), net. The basis difference between the carrying value of the investment and the Company’s underlying net assets amounts to USD 3.8 million (CHF 3.7 million) and is mainly related to not recognized IPR&D assets by the investee. In accordance, with its accounting policy, the Group reviews the investment for impairment annually or when events and circumstances indicate that the investment in EchoSense might be impaired.. Financial liabilities carried at amortized cost As of June 30, 2012, and December 31, 2011, the Group’s financial liabilities carried at amortized cost amount to CHF 235.5 million and CHF 235.6 million, respectively, and relate to the issuance of a bond on December 7, 2011 (See Note 9. Borrowings).. June 30, 2012. December 31,2011. Long-term financial debt. 235,505. 235,578. Total. 235,505. 235,578. NOTE 8. TRADE AND OTHER RECEIVABLES Trade and other receivables consisted of the following at:. Trade receivables Other receivables Trade and other receivables, gross. June 30, 2012. December 31,2011. 452,651. 527,547. 66,292. 55,827. 518,943. 583,374. Allowance for doubtful accounts. (26,737). (46,893). Total trade and other receivables, net. 492,206. 536,481. As of June 30, 2012, and December 31, 2011, approximately 36% and 44% of trade accounts receivables are due from public institutions funded by governmental agencies in certain Southern European countries. The significant decrease resulted mainly due to increased cash collections in Spain and the corresponding adjustment of the allowance for doubtful accounts.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. The following table states Group’s financial liabilities carried at amortized cost:.

(22) Management Review Financial Statements. 22. During 2012, the Spanish Government created an extraordinary mechanism for payment of outstanding positions to suppliers of governmentally funded public entities and Spanish Autonomous Regions (“The Plan”). Based on recently issued and implemented Spanish laws and regulations, the Plan introduced a special purpose entity called “Fondo de Financiación para el Pago de Proveedores” (“The Fund”) to ensure structured payment of all public creditors. In June 2012, the Fund paid to the Group in cash EUR 90 million (CHF 108.3 million), which related to public sector trade receivables outstanding as of December 31, 2011. Consequently, in June 2012, the Group released the corresponding allowance for doubtful accounts amounting to EUR 16.8 million (CHF 20.4 million), which was recorded at December 31, 2011. In addition, in the six months ended June 30, 2012, and the twelve months ended December 31, 2011, the Group transferred EUR 3.2 million (CHF 3.9 million) and EUR 6.9 million (CHF 8.5 million), respectively, of its trade accounts receivable owned by other foreign subsidiaries to third-party financial institutions without recourse. None of these financial institutions meets the criteria of a VIE subject to consolidation. The consideration received was paid in cash. The factoring transactions were accounted for as a sale and the related receivables excluded from the accompanying consolidated balance sheets. Transaction costs and net gains (losses) realized were not material. For concentrations of credit risk related to Group’s trade receivables – see Note 14. Concentrations.. NOTE 9. BORROWINGS The aggregate contractual maturities of all debt obligations due subsequent to June 30, 2012 are as follows: 2011 bond Type of payment. Amount. 2012. Annual interest. 2013. Annual interest. 11,456 11,456. 2014. Annual interest. 11,456. 2015. Repayment of debt including annual interest. 246,457. Thereafter. –. Total. 280,825. As of June 30, 2012, the total book value of all debt obligations was 235.5 million and consisted of CHF 235 million related to the principal amount of the bond issued in 2011 and CHF 0.5 million related to the unamortized portion of the premium received at issuance of the bond. 2011 bond On December 7, 2011, the Group issued CHF 235 million in 4.875% interest bearing bonds (“2011 bond”) with maturity at par on December 7, 2015. The issue price was set at 100.25%. Interest is payable annually on December 7 in arrears. The Group has the right without the consent of the current 2011 bonds’ holders to reopen this issue by the issuance of further bonds which will be fungible with the currently outstanding bonds (i.e. identical especially in respect of the terms of the bonds, final maturity and interest rate). In addition, at any time, the Group is entitled to purchase 2011 bonds in the open market or otherwise, at any price and at the option of the Group, the bonds may be held, resold or surrendered for cancellation. If purchases are made by tender, tenders for such bonds have to be made available to all holders of the 2011 bonds alike. Up to two months prior to the maturity date on December 7, 2015, and within 30 days following a change of control notice by the Group, the 2011 bond is, in accordance with its terms, redeemable at the option of the bond holders. Subject to a period of not less than 30 nor more than 60 days prior notice, the Group may redeem the bonds at any time prior to the maturity date, in whole, but not in part only, at par plus accrued interest, if 85% or more of the aggregate principal amount have been redeemed or purchased and cancelled at the time of such notice. The 2011 bond is listed on the SIX Swiss Exchange. As of June 30, 2012, its fair value amounts to 106.7%.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Payable on December 7,.

(23) Management Review Financial Statements. 23. The Group accounts for the 2011 bond at amortized cost (Level 2). The difference between the proceeds received and the principal amount due on redemption (premium) of CHF 0.6 million and the debt issuance costs of CHF 2.9 million are amortized over the duration of the bond and are recognised, using the effective interest rate method, as interest expense on bonds in the income statement. At June 30, 2012, other non-current assets include debt issuance costs of CHF 2.5 million (December 31, 2011: 2.9 million). As of June 30, 2012, the Group recognized CHF 5.7 million interest expense related to the accrued interest payable on December 7, 2012 (December 31, 2011: CHF 0.8 million) and CHF 0.3 million related to the amortization of the premium and the debt issuance cost, net (December 31, 2011: CHF 0.04 million).. Credit facilities At June 30, 2012, the Group had a credit line of CHF 10 million as margin cover for over-the-counter trades, a credit line of CHF 5 million deployable for issuance of letters of credit, a credit line of JPY 500 million (CHF 6 million) established as an overdraft facility and senior mortgage certificates in the total amount of CHF 15.9 million. All credit facilities were unused as of June 30, 2012.. NOTE 10. COMMITMENTS, CONTINGENCIES AND GUARANTEES Commitments In conjunction with its ongoing facility expansion, the Group has entered into capital commitments totalling CHF 10 million, which are expected to be paid during the next twelve months.. Contingencies The Group records accruals for loss contingencies to the extent that their occurrence is deemed to be probable and the related damages are estimable. If a range of liability is probable and estimable and some amount within the range appears to be a better estimate than any other amount within the range, the Group accrues that amount. If a range of liability is probable and estimable and no amount within the range appears to be a better estimate than any other amount within the range, the Group accrues the minimum of such probable range. Interest on litigation includes premium on the surety bonds, which is accrued on a prospective basis and classified as non-operating expense. Litigation claims that the Group is involved in involve highly complex issues which are subject to substantial uncertainties and, therefore, the probability of loss and an estimation of damages are difficult to ascertain. Consequently, the Group cannot reasonably estimate the maximum potential exposure or the range of possible loss in excess of amounts accrued for these contingencies. These assessments can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. The Group’s assessments are based on estimates and assumptions that have been deemed reasonable by management. Litigation is inherently unpredictable, and excessive verdicts do occur. Although the Group believes to have substantial defenses in these matters, the Group could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period. Asahi Kasei Litigation On November 19, 2008, plaintiff Asahi Kasei Pharma Corporation (“Asahi”) filed a complaint at the State Court in California, US, against Actelion Ltd and its subsidiaries Actelion Pharmaceuticals US Inc., Actelion Pharmaceuticals Ltd, Actelion US Holding Company, CoTherix, Inc. (“CoTherix”) and three individual officers. The action arises from a dispute involving the license and development agreement between Asahi and CoTherix for the drug compound fasudil that has been terminated upon the acquisition of CoTherix in 2007. In its Third Amended complaint Asahi had asserted claims for. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. In the ordinary course of business the Group has entered into purchase commitments related to long-term manufacturing and supply agreements in the total amount of CHF 11.2 million for 2012, CHF 4.3 million for 2013, CHF 8.6 million for 2014, CHF 5.6 million for 2015 and CHF 6.7 million for 2016 and CHF 10.1 million thereafter..

(24) Management Review Financial Statements. 24. interference with contract, interference with prospective economic advantage, breach of confidentiality agreement, breach of common law duty of confidence, claims under California’s false advertising statute, claims for violations of California’s Cartwright Act and for violations of California’s unfair competition law. The jury trial began in February 2011 at the State Court in San Mateo County, California, and continued until May 4, 2011. On procedural grounds the trial continued until November 18, 2011, when the final judgment was issued. Prior, during or subsequent to the jury trial Asahi voluntarily dismissed the claims under the California’s false advertising statute and California’s unfair competition law. The State Court granted summary adjudication in favor of Actelion on the Cartwright Act claims and granted CoTherix summary adjudication on all claims against it. Asahi appealed the dismissal of the Cartwright Act claims against CoTherix, and that appeal was denied in March 2012 by the California Court of Appeal. Asahi’s subsequent petition for review of the decision of the California Court of Appeal was definitively denied by the California Supreme Court on June 13, 2012. On May 4, 2011, a jury awarded Asahi USD 547 million in compensatory damages and USD 30 million in punitive damages. In subsequent motions Actelion requested an election between damages of USD 358.95 million for alleged lost profits and USD 187.4 million for alleged development costs or a new trial. In addition, the motions requested a deduction of USD 78.4 million from either amount based on the previous payment related to the arbitration proceedings in 2009. On July 28, 2011, the State Court granted Actelion’s motion for offset of the previous arbitration payment and applied a reduction of USD 70.35 million on the original jury verdict. On October 20, 2011, the State Court granted Actelion’s motion for a new trial on compensatory damages contingent on Asahi’s consent to a reduction of the jury award by further USD 99.2 million. Following Asahi’s consent to this reduction, on November 18, 2011, the State Court issued final judgment for USD 377.3 in compensatory damages, USD 30 million in punitive damages and USD 0.3 million in cost reimbursements. In addition, should this final judgment be confirmed by the California Court of Appeal, Asahi would be entitled to receive pre-judgment interest of USD 8.1 million and additional simple post-judgment interest of 10% p.a., which will be applied on the total amount of the awards until paid. Consequently, the Group recorded a provision of USD 407.7 million, which represents the final amount awarded to Asahi by the State Court and which led to a net loss for the twelve months ended December 31, 2011. Furthermore, as of June 30, 2012, the Group provided for the cumulative estimated amount of interest of USD 43.4 million (December 31, 2011: USD 23.1 million), which has been recorded within accrued expenses. Since denominated in USD, both contingencies are revalued at each reporting date.. In conjunction with the appeal, in January 2012, the Group was required to provide surety bonds in total of USD 623.6 million at the California Court of Appeal, US, in order to securitize the awards granted to Asahi by the State Court in California, US. The surety bonds were issued and posted as collateral by certain insurance companies at the California Court of Appeal, US, in January 2012. In return, the Group was required to pledge USD 375 million in cash or investments in order to secure the surety bonds. The amount of collateral required could change depending on the progress of the appeal procedures and currency exchange fluctuations. As of June 30, 2012, the Group had pledged USD 250 million and CHF 140 million in cash as collateral – See Note 7. Financial assets and liabilities. The Group does not expect a resolution of the case within the next twelve months. US Department of Justice Investigation In September 2010, a Group’s subsidiary received a subpoena from the US Attorney’s Office for the Northern District of California, requesting documents relating, among others, to marketing and sales practices of Tracleer ® (bosentan) in the United States. The Group provided the documents requested pursuant to the subpoena and co-operates in additional requests by the US Authorities. As of June 30, 2012, the investigation is ongoing and the Group cannot reasonably evaluate the timing of resolution and the final outcome.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. The Group appealed the entire judgment in December 2011. The amount of cash to be paid, if any, and the timing of such payment will depend on the outcome of the appeal process. Because a resolution of the case is not expected within the next twelve months the provision and the corresponding interest have been recorded as a litigation provision..

(25) Management Review Financial Statements. 25. Review of strategic portfolio and potential restructuring In conjunction with the review of its strategic portfolio and the decision to re-focus its research and development (“R&D”) efforts into specialty areas the Group expects a reorganization which will affect the nature and focus of its operations. On July 11, 2012, the Group started a mandatory consultation process with the Group’s employee representatives to discuss and agree on impacted functions, locations and proposed termination benefits. As of July 17, 2012, the date these interim consolidated financial statements were available to be issued, the consultation process was ongoing. As such, as of June 30, 2012, the Group did not fulfill the criteria outlined in the Exit or Disposal Cost Obligations Topic of FASB ASC (“ASC 420”) and in the Compensation - Nonretirement Postemployment Benefits Subtopic of FASB ASC (“ASC 712”) and therefore no provision has been recorded as of June 30, 2012.. Guarantees In order to secure its obligations from derivative trading, cash pooling and forward transactions in foreign currencies, the Group has issued guarantees and a letter of indemnity to various financial institutions in the total amount of CHF 76.2 million. In the ordinary course of business the Group has entered into certain guarantee contracts and letters of credit amounting to CHF 6.9 million. The guarantees primarily relate to operating leases and credit lines for subsidiaries in foreign jurisdictions. Due to the nature of these arrangements, the Group has never been required to make payments under these contracts and does not expect any potentially required future payments to be material.. NOTE 11. PENSION PLANS. The Basic Plan is organized under the legal form of a pension foundation. The Group and its employees pay retirement contributions, which are defined as a percentage of the employees’ covered salaries. Interest is credited to the employees’ accounts at the minimum rate provided in the Basic Plan, payment of which is guaranteed by the insurance contract, which represents the Basic Plan’s primary asset. Future benefit payments are managed by the insurance company.. Swiss Management Pension Plan The Group also maintains a defined benefit plan (“the Swiss Management Pension Plan”) that also provides retirement benefits and risk insurance for death and disability for components of remuneration in excess of the maximum insurable amount of base salary described in the previous paragraph. The Swiss Management Pension Fund insures base salary above CHF 150,000, and annual incentives, up to an aggregate maximum of CHF 835,200. It is funded through contributions by the Group and its employees. In addition, the Group maintains other pension plans outside Switzerland, which are insignificant to the Group. The Group uses a measurement date of December 31 for all pension plans.. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Swiss Employee Pension Plan The Group maintains a pension plan (the “Basic Plan”) covering all of its employees in Switzerland. The Plan insures remuneration up to a maximum annual base salary of CHF 150,000 as well as additional cash incentives paid voluntarily by the Group to its employees. In addition to retirement benefits, the Basic Plan provides benefits on death or long-term disability of its employees..

(26) Management Review Financial Statements. 26. Net periodic benefit costs for the Group’s defined benefit pension plans include the following components: For the six months ended June 30, Service cost Interest cost Expected return on plan assets Amortization of net actuarial (gain) loss Net periodic benefit cost. 2012. 2011. 9,850. 9,824. 3,347. 3,090. (3,621). (3,224). 228. 819. 9,804. 10,509. NOTE 12. SHAREHOLDERS’ EQUITY Conditional capital Since inception, the Group has created conditional capital for the establishment of share option plans, convertible bonds and similar forms of financing. At June 30, 2012, the Group had conditional capital of CHF 27.3 million of which CHF 11.1 million relate to share option plans and CHF 16.2 million to convertible bonds and similar forms of financing. Movements in conditional capital are as follows: January 1, 2011 Forfeited Challenge Award options Exercise of options December 31, 2011 Forfeited Challenge Award options Exercise of options June 30, 2012. 28,098 (142) (320) 27,636 (69) (298) 27,269. Treasury shares acquired via the Share Repurchase Program (“SRP”) On October 21, 2010, the Group announced the repurchase of up to CHF 800 million of the Company’s common stock over the next three years. At the Annual General Meeting (“AGM”) on May 5, 2011, the shareholders approved to cancel shares bought through this program and to reduce the issued share capital accordingly. The buyback, which is carried out via a second trading line on the SIX Swiss Exchange, will be completed no later than October 31, 2013. Actelion’s Board of Directors and senior management believe that the share repurchase program represents an appropriate use of the Group’s cash, while allowing sufficient flexibility for continued investments in R&D, in-licensing and potential M&A opportunities. As at June 30, 2012, the Group had acquired total 5,656,675 treasury shares at an average price of CHF 36.89 through the SRP (December 31, 2011: total 3,118,075 treasury shares held, acquired at an average price of CHF 38.23). For the six months ended June 30, 2012, the Group acquired 2,538,600 treasury shares through the SRP at an average price of CHF 35.23. Treasury shares bought on the first trading line At June 30, 2012, the Group held 9,077,118 treasury shares mainly acquired on the first trading line on the SIX Swiss Exchange (December 31, 2011: 10,228,156) at an average price of CHF 57 (December 31, 2011: CHF 56.72). For the six months ended June 30, 2012, the Group did not acquire any treasury shares via the first trading line. Members of the Board of Directors received 8,230 treasury shares acquired at an average price of CHF 52.83 as compensation. In addition, during 2012, the Group transferred 1,142,808 treasury shares acquired at an average price of CHF 54.52 to Actelion’s. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Treasury shares At June 30, 2012, the Group held 14,733,793 treasury shares including those acquired via the share repurchase program (December 31, 2011: 13,346,231). The average purchase price of all treasury shares held amounts to CHF 49.28 (December 31, 2011: CHF 52.40)..

(27) Management Review Financial Statements. 27. employees in exchange for restricted stock units which vested either due to the full achievement of the conditions of the Actelion’s 2011 Share Challenge Plan on January 3, 2012, or in accordance with the conditions of the Employee Share Plan (See Note 20. Stock-based compensation in the Group’s audited consolidated financial statements for the year ended December 31, 2011). Treasury shares are deducted from equity at their cost value and are shown as a separate component of shareholders’ equity. Except for the shares acquired through the SRP, the Group intends to further use the repurchased stock to offset dilution caused by the issuance of shares related to the Group’s share-based payment plans. Common shares At the AGM on May 4, 2012, the shareholders approved the cancellation of 4,431,075 issued shares, which were acquired via the SRP at an average purchase price of CHF 37.06. The Group is currently undergoing mandatory legal procedures and expects to cancel the shares and reduce the issued share capital accordingly by the end of the third quarter of 2012. Dividends The AGM on May 4, 2012, approved a cash dividend for 2011 of CHF 0.80 per share. On May 8, 2012, the Group distributed gross dividends of CHF 93.7 million to its shareholders (2011: 95.3 million).. NOTE 13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Movements in accumulated other comprehensive income (loss) consist of the following for the six months ended June 30, 2012 and 2011, respectively:. Foreign currency translation adjustments 1 Not recognized components of net periodic benefit costs 2. Changes arizing during period. Reclassification or amortization through net income. Translation effects. June 30, 2012. (167,724). (7,340). -. 5. (175,059). (27,164). 5. 228. (5). (26,936). (194,888). (7,335). 228. -. (201,995). January 1, 2011. Changes arizing during period. Reclassification or amortization through net income. Translation effects. June 30, 2011. Foreign currency translation adjustments 1. (124,052). (34,136). -. (22). (158,210). Not recognized components of net periodic benefit costs 3. Total accumulated OCI (loss). Accumulated OCI (loss), net of tax. (35,981). (22). 819. 22. (35,162). Unrealized gains (losses) on available-for-sale securities 4. 112. (734). -. -. (622). Total accumulated OCI (loss). (159,921). (34,892). 819. -. (193,994). Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries. 2 Excludes income taxes amounting to CHF 2.1 million and CHF 2.1 million on January 1, and June 30, 2012, respectively. 3 Excludes income taxes amounting to CHF 2.7 million and CHF 2.7 million on January 1, and June 30, 2011, respectively. 4 Income taxes are not provided for unrealized gains (losses) on available-for-sale securities because these gains are taxed at zero percent. 1. Actelion Half Year Report 2012. WorldReginfo - 473d3241-2d6e-4da1-9121-9e88a181232b. Accumulated OCI (loss), net of tax January 1, 2012.