HALBJAHRESBERICHT 2014 UNSERE ZUKUNFT GESTALTEN.

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1 UNSERE ZUKUNFT GESTALTEN.

2 Aktionärsbrief des CEO Finanzübersicht Consolidated Financial Statements (including notes) Actelion Ltd. ist ein führendes biopharmazeutisches Unternehmen, das sich auf die Entdeckung, Entwicklung und Vermarktung innovativer Medikamente für Krankheiten mit hohem medizinischem Bedarf konzentriert. 2 3

3 HALBJAHRESBERICHT 2014 Sehr geehrte Aktionärinnen, sehr geehrte Aktionäre Ich bin sehr erfreut, Ihnen über die ausgezeichneten Fortschritte berichten zu können, die Actelion bei der Umsetzung seiner strategischen Ziele im ersten Halbjahr 2014 gemacht hat. In den USA, wo Opsumit (Macitentan) nun seit über sechs Monaten verfügbar ist, hält sich die Einführungsdynamik auf hohem Niveau. Auch in neuen Märkten wie Deutschland, der Schweiz, Grossbritannien, den Niederlanden und Skandinavien, wo Opsumit zu Beginn des Jahres eingeführt wurde, zieht die Nachfrage an. Zudem lassen die kürzlich bekannt gegebenen ersten Ergebnisse der zulassungsrelevanten Phase-III-Outcome- Studie GRIPHON mit Selexipag - dem ersten selektiven, oral anwendbaren Prostazyklin-IP-Rezeptor-Agonisten - ein anhaltendes Wachstum unseres Geschäfts auf dem Gebiet der pulmonalen arteriellen Hypertonie (PAH) erwarten. Selexipag erreichte im Hinblick auf den primären Wirksamkeitsendpunkt ein statistisch hoch signifikantes Ergebnis, so dass wir davon ausgehen, den Prozess zur Zulassung bald zu beginnen und das Produkt erfolgreich im Markt einzuführen. Mit dem durch Selexipag zu erwartendem zusätzlichen Cashflow sollten wir in der Lage sein, höhere Renditen für unsere Aktionärinnen und Aktionäre zu erzielen und gleichzeitig in künftige Wachstumsmöglichkeiten auf neuen therapeutischen Spezialgebieten zu investieren. STARKES ERSTES HALBJAHR 2014 Actelion erzielte im ersten Halbjahr 2014 eine starke Performance. Der Produktumsatz stieg auf 993 Millionen CHF (+17% bei konstanten Wechselkursen kwk). Der Kerngewinn erreichte 421 Millionen CHF (+35% bei kwk), und der Kerngewinn pro Aktie stieg um 48% auf 3,25 CHF. Unsere Produkte behaupten sich weiterhin gut im Markt, positiv beeinflusst durch die Auflösung von Rabattrückstellungen in den USA in der Höhe von CHF 54 Millionen. Tracleer (Bosentan) und Opsumit, Veletri (Epoprostenol zur Injektion) und Zavesca (Miglustat) trugen alle im ersten Halbjahr zum Gesamtwachstum in allen Regionen bei. Da der Produktebeitrag über den früheren Prognosen lag, erhöhen wir unsere Guidance für das Gesamtjahr UNSERE ZUKUNFT AUF DEM GEBIET DER PAH EIN STARKES PORTFOLIO Durch die Zulassung und Einführung von Opsumit, dessen solide klinische Daten weltweit durch ein gut differenziertes Label belegt werden, konnten wir unsere globale Führungsrolle auf dem Gebiet der PAH weiter ausbauen. Unser PAH-Portfolio umfasst jetzt Produkte zur oralen Einnahme (Tracleer, Opsumit), Inhalation (Ventavis, Iloprost) und intravenösen Anwendung (Veletri) bei Patienten in verschiedenen Krankheitsstadien (PAH Funktionsklassen II-IV); Damit sind wir in der Lage das therapeutische Anwendungsspektrum bei PAH abzudecken. Mit der potenziellen Ergänzung des Portfolios durch Selexipag sollte es uns gelingen, weitaus mehr PAH-Patienten eine auf den Prostazyklin-Signalweg ausgerichtete Behandlungsoption anzubieten. 4 5

4 6 Der im zweiten Quartal erzielte Umsatz von 38 Millionen CHF ist ein Beleg für die bedeutenden Fortschritte, die wir mit der Einführung von Opsumit gemacht haben. In den USA gewinnt das Produkt aufgrund der zunehmenden Akzeptanz durch die medizinische Fachwelt Marktanteile von anderen Endothelin-Rezeptor-Antagonisten (ERAs). Inzwischen wurden mit den meisten führenden Krankenversicherungen die Rückerstattungen festgelegt und die Aufnahme in Arzneimittellisten vereinbart. Ausserhalb der USA machten die Einführungsaktivitäten mit zehn Markteinführungen im ersten Halbjahr 2014 rasche Fortschritte. In der zweiten Hälfte 2014 steht die Einführung in Australien und Italien an und 2015 in Frankreich und Spanien. In der ersten Jahreshälfte 2014 wurde Macitentan in Australien und Mexiko zugelassen, und in Japan und anderen Märkten wurde die Zulassung beantragt. Die frühe Akzeptanz von Opsumit in der medizinischen Fachwelt ist überaus ermutigend. Zudem hat sich unsere kommerzielle Strategie bei zahlreichen erfolgreichen Einführungen in verschiedenen geographischen Regionen bewährt. In Märkten, in denen Opsumit noch nicht verfügbar ist, verzeichnen wir weiterhin eine robuste Nachfrage nach Tracleer, die in Europa auch durch die Indikation Digitale Ulzerationen gestützt wird. In diesen Märkten werden wir bis zur Einführung von Opsumit weiterhin den Einsatz von Tracleer bei PAH fördern. Veletri entwickelt sich dank der ausgezeichneten Einführungsdynamik in Japan (unter dem Namen Epoprostenol ACT ) und verschiedenen europäischen Märkten zu einem erfolgreichen globalen Produkt. In den USA nimmt sein Anteil am intravenösen Epoprostenol- Markt weiter zu. Die Ergebnisse der GRIPHON-Studie sind sehr vielversprechend. Die Wirksamkeit von Selexipag liegt weit über unseren Erwartungen: gegenüber Plazebo konnte das Risiko eines Morbiditäts-/Mortalitätsereignisses bei Patienten, die grossenteils bereits mit einer oralen PAH-Therapie und insbesondere einer Kombination aus einem Endothelin-Rezeptor-Antagonisten und einem PDE-5-Inhibitor behandelt wurden, um 39% reduziert werden (p<0.0001). Ausserdem kann aus der niedrigen Rate von Therapieabbrüchen geschlossen werden, dass die Hochtitrierung bis zur maximal verträglichen Dosis von Selexipag erfolgreich war. Es ist wichtig darauf hinzuweisen, dass Selexipag ein selektiver Prostazyklin-Rezeptor-Agonist ist und nicht ein Prostazyklin-Analogon, und dass das von uns beobachtete Profil auf diesen einzigartigen Wirkmechanismus zurückgeführt werden kann. Entsprechend werden wir Selexipag nun auch in anderen Indikationen prüfen, in denen der selektive Prostazyklin IP Rezeptor Agonist als therapeutische Option infrage kommt. Es freut mich sehr, dass unsere Partner bei Nippon Shinyaku die diese Substanz entdeckt haben die Zusammenarbeit mit Actelion gewählt und uns damit die Möglichkeit gegeben haben, das globale Potenzial von Selexipag auszuschöpfen. Gemeinsam mit Opsumit und Veletri wird Selexipag der entscheidende Faktor für den Ausbau, die Diversifizierung und die Globalisierung unseres PAH-Portfolios sein. AUFBAU EINES ZUSÄTZLICHEN SPEZIALITÄTEN- PORTFOLIOS In der ersten Hälfte 2014 machten wir auch Fortschritte bei der Umsetzung des zweiten Elements unserer Strategie dem Aufbau eines zusätzlichen Spezialitäten- Portfolios neben PAH. Wir sind weiterhin auf der Suche nach innovativen Zukäufen aus externen Quellen. Dabei ist es uns aber wichtig, uns nicht von dem gegenwärtig in unserer Industrie vorherrschenden Kauffieber mitreissen zu lassen, sondern nur solche Business Development- Aktivitäten in Betracht zu ziehen, die strategisch sinnvoll sind und zu einer Stärkung unseres Unternehmens führen. Valchlor wurde im November 2013 in den USA zunächst in Kompetenzzentren für kutanes T-Zell-Lymphom (CTLC) eingeführt. Im März 2014 wurde der Ausbau unserer Verkaufsorganisation abgeschlossen, so dass wir neben den CTLC-Zentren nun auch mit anderen Dermatologen zusammen arbeiten. Zavesca erzielt weiterhin starke Umsätze. Ausserhalb der USA wo Zavesca für die Behandlung von Niemann-Pick Typ C zugelassen ist, ist dieses Medikament nach wie vor die einzige Therapie, und sein Wachstum auch die Folge einer grösseren Bekanntheit und häufigeren Diagnose der Krankheit. Auch unser klinisches Entwicklungsprogramm kommt gut voran. Unser neuartiges Antibiotikum Cadazolid hat eine stark hemmende Wirkung auf die Proteinsynthese von Clostridium difficile und führt zur massiven Unterdrückung der Bildung von Toxinen und Sporen. Im Moment rekrutieren wir Patienten für unser Phase-III-Programm, in dem die Wirksamkeit und Sicherheit von Cadazolid gegen Clostridium difficile-assoziierte Diarrhoe untersucht werden soll. Insgesamt rechnen wir, dass Patienten in die Studie aufgenommen werden. Wir sind nach wie vor vom therapeutischen Nutzen unseres S1P 1 -Rezeptor Agonisten Ponesimod überzeugt und untersuchen dessen langfristige Anwendung derzeit im Rahmen einer Anschlussstudie der Phase II bei Multipler Sklerose. Unser Team analysiert die Möglichkeit, die weitere Entwicklung auf der Basis eines innovativen Behandlungsschemas fortzuführen. Bei jedem weiteren Entwicklungsschritt werden wir das klinische Risiko und die erforderlichen Investitionen sowie den medizinischen Nutzen und die kommerziellen Möglichkeiten unter Einbeziehung der Empfehlungen der Gesundheitsbehörden gegeneinander abwägen. Wir suchen nach Möglichkeiten, Macitentan neben PAH im erweiterten Anwendungsgebiet der pulmonalen Hypertonie einzusetzen. Zudem evaluieren wir andere Anwendungsmöglichkeiten für diesen massgeschneiderten ERA. In einem frühklinischen Studienprogramm untersuchen wir zum Beispiel dessen therapeutisches Potenzial bei Patienten mit Glioblastom (einem Hirntumor). Wir gehen davon aus, dass wir in der zweiten Hälfte dieses Jahres über die Fortschritte unserer Entwicklungspipeline und präklinischen Projekte berichten können. VERBESSERUNG DER RENTABILITÄT ANHEBUNG DER PROGNOSE Unsere Bemühungen, die Rentabilität zu halten und zu verbessern, führte u.a. dazu, dass wir substanzielle Renditen für unsere Aktionärinnen und Aktionäre erwirtschaften konnten. Anlässlich der diesjährigen Generalversammlung bewilligten Sie neben einer Anhebung der Dividende um 20% (auf CHF 1,20) die Vernichtung der verbleibenden 6 Millionen eigener Aktien nach Abschluss des sich auf 800 Millionen CHF belaufenden Aktienrückkaufprogramms. Zudem setzen wir das Aktienkaufprogramm zur Bedienung von Mitarbeiteroptions- bzw. Aktienbeteiligungsplänen fort. Die positiven Ergebnisse für Selexipag belegen, dass sich unsere Bemühungen zur Erschliessung neuer Behandlungsoptionen gegen PAH auszahlen. Wir schaffen kontinuierlich Werte für die PAH-Gemeinschaft und für alle anderen Stakeholder von Actelion, wie sich auch an der jüngsten Entwicklung des Aktienkurses ablesen lässt. Angesichts unserer gegenwärtigen Geschäftsdynamik rechnen wir für 2014 mit einer höheren Profitabilität und erhöhen deshalb unsere Prognose für das Gesamtjahr. Unter Ausschluss unvorhersehbarer Ereignisse gehen wir jetzt für 2014 von einer Mindeststeigerung des Kerngewinns zwischen 10 und 20 Prozent bei konstanten Wechselkursen aus. Diese Anhebung der Prognose ergibt sich aus einem grösseren Produktbeitrag und dem positiven Effekt der Auflösungen von Rabattrückstellungen vor allem bei Medicaid-/Managed Medicaid-Programmen in den Vereinigten Staaten. Wenn wir die Auflösung der Rabattrückstellungen für Patientenunterstützungsprogramme in den Vereinigten Staaten nicht mehr berücksichtigen, erwarten wir im Jahr 2014 einen Mindestkerngewinn im tiefen zweistelligen Bereich bei konstanten Wechselkursen. Diese sehr starke Geschäftsentwicklung im 2014 wird eine deutlich höhere Ausgangsbasis für 2015 bilden, und wir werden deshalb unsere Prognose Anfang nächsten Jahres neu überdenken. UNSERE ZUKUNFT GESTALTEN Seit der Bekanntgabe unserer Wertschöpfungsstrategie im Mai 2012 haben wir beachtliche Fortschritte machen können. Der Erfolg der Phase-III-Studien mit Opsumit und Selexipag ist ein Beleg dafür, dass wir unser Ziel, unser PAH-Portfolio zu erhalten und auszubauen, erreicht haben. Wir werden den dynamischen Einführungsprozess von Opsumit fortführen und alles daran setzen, künftige Einführungen ebenso erfolgreich zu gestalten. Wir arbeiten daran, die Zulassungsunterlagen für Selexipag unter Verwendung der umfangreichen Datensätze fertigzustellen. Daneben suchen wir schon jetzt nach neuen Wegen, das PAH-Portfolio auch künftig weiter auszubauen. Wir freuen uns über die innovativen Substanzen, die in unseren eigenen Forschungslabors entwickelt werden und sind zuversichtlich, den geplanten Aufbau eines zusätzlichen Spezialitätenportfolios umsetzen zu können. Wir werden uns weiterhin für die Schaffung von Werten für alle Stakeholders, dabei aber die Entwicklung der Kosten nicht aus den Augen verlieren. Von diesem Engagement werden nicht nur die Patienten profitieren, sondern auch Sie als unsere Aktionärinnen und Aktionäre. Ich schätze das Vertrauen, das Sie Actelion entgegen gebracht haben und danke Ihnen für Ihre anhaltende Unterstützung. JEAN-PAUL CLOZEL Chief Executive Officer 7

5 HALBJAHRESBERICHT 2014 HÖHEPUNKTE DES 1. HALBJAHRES CHF MILLIONEN Produktumsatz bei CHF 993 Millionen, plus 17% bei konstanten Wechselkursen (kwk) oder 11% unter Ausschluss der Auflösung von Rabattrückstellungen in den USA 35% KERNGEWINN ANSTIEG Kerngewinn bei CHF 421 Millionen, plus 35% bei kwk oder 21% unter Ausschluss der Auflösung von Rabattrückstellungen in den USA 48% EPS ANSTIEG Kerngewinn pro Aktie (EPS) bei CHF 3,25, ein Anstieg um 48% bei kwk 1.20 CHF DIVIDENDE AUSBEZAHLT Anhebung der Dividende auf CHF 1,20, ausbezahlt am 15. Mai 2014, Beleg für das Vertrauen in die gegenwärtige und zukünftige Stärke des zugrunde liegenden Geschäfts 8 9

6 KERNERGEBNISSE Umsatz nach Regionen Actelion berechnet, berichtet und prognostiziert seine Geschäftsergebnisse weiterhin auf der Grundlage der operativen Kernergebnisse, die die zugrunde liegende Geschäftsleistung genauer abbilden. in CHF Millionen 1. Halbjahr 2014 (CHF Mio.) 1. Halbjahr 2014 (%) 1.Halbjahr 2013 (CHF Mio.) 1.Halbjahr 2013 (%) % Veränderung bei kwk Kernergebnisse schliessen Einkünfte aus vertraglichen Vereinbarungen aus, ebenso Kosten, die im Zusammenhang mit aktienbasierten Vergütungen, Abschreibungen, Amortisationen, Wertminderungen, bestimmten Ertragssteuereffekten und anderen Faktoren entstehen, die vom Management als aussergewöhnlich eingestuft werden. Eine vollständige Überleitung der Kernergebnisse auf US-GAAP-Basis findet sich auf Seite 16 dieses Berichts. % Veränderung in CHF Millionen 1. Halbjahr Halbjahr 2013 in CHF bei kwk (1) Total Produktumsatz Kernaufwand F&E (1) 1 Kerngewinn (2) Kernreingewinn Verwässerter Kerngewinn pro Aktie (EPS) ) Prozentuale Veränderungen zu kwk berechnen sich nach Neukonsolidierung der Ergebnisse des ersten Halbjahrs 2014 und des ersten Halbjahrs 2013 bei konstanten Wechselkursen (die durchschnittlichen monatlichen Wechselkurse für das erste Halbjahr 2013). 2) Actelion berechnet, berichtet und prognostiziert seine Geschäftsergebnisse weiterhin auf der Grundlage der operativen Kernergebnisse, da diese nach Auffassung des Managements die zugrunde liegende Geschäftsleistung genauer abbilden. Das Unternehmen ist davon überzeugt, dass diese non-gaap-finanzmesswerte nützliche zusätzliche Informationen für Investoren bereitstellen. Diese non-gaap-messwerte werden zusätzlich und nicht als Ersatz für die nach US-GAAP erstellten Finanzzahlen berichtet. 3) Der Kerngewinn pro Aktie (EPS) für das erste Halbjahr 2013 wurde unter Verwendung des für jede Anpassung aktuellen Steuersatzes neu berechnet (zuvor CHF 2,39 unter Verwendung eines Mischsteuersatzes). PRODUKTUMSATZ In den ersten sechs Monaten 2014 belief sich der Produktumsatz auf CHF 993 Millionen, ein Anstieg um 17% bei kwk gegenüber der ersten Jahreshälfte Unter Ausschluss der Veränderung durch die Auflösung von Rabattrückstellungen in den USA von CHF 54 Millionen (H1 2014: CHF 61 Millionen; H1 2013, CHF 7.5 Millionen) stieg der Produktumsatz bei kwk um 11%. Umsatz nach Produkten United States Europa Japan Übrige Welt Total Produktumsatz PAH-Geschäft Opsumit Die Umsätze von Opsumit (Macitentan) beliefen sich in der ersten Jahreshälfte 2014 auf CHF 53 Millionen und spiegeln die starke Verkaufsdynamik nach der Einführung auf allen Märkten wider, in denen das Produkt mit Kostenerstattung lanciert wurde. Die robusten Daten zur langfristigen Wirksamkeit von Opsumit wurden von der medizinischen Fachwelt im Bereich PAH gut angenommen und werden als differenziert im Vergleich zu anderen auf dem Markt befindlichen ERAs erachtet. In den USA konnten inzwischen mit den meisten führenden Krankenversicherungen die Rückerstattungsmodalitäten festgelegt und die Aufnahme in Arzneimittellisten vereinbart werden. Ausserhalb der USA macht die Markteinführung gute Fortschritte; Opsumit wurde mittlerweile in Deutschland, Österreich (Rückerstattung im Verlauf des 4. Quartals erwartet), der Schweiz, Kanada (nur im Rahmen von privaten Versicherungsplänen), in Grossbritannien, Irland, Dänemark, Norwegen, Schweden und den Niederlanden eingeführt. Für die zweite Jahreshälfte 2014 sind Markteinführungen in Australien und Italien, für 2015 in Frankreich und Spanien geplant. In Australien und Mexiko erfolgte die behördliche Zulassung für Macitentan in der ersten Jahreshälfte 2014 und auch in Japan und anderen Märkten wurden die Registrierungsunterlagen eingereicht. Tracleer Die Umsätze von Tracleer (Bosentan) beliefen sich in der ersten Jahreshälfte 2014 auf CHF 791 Millionen, ein Anstieg um 8% bei kwk gegenüber demselben Zeitraum im Vorjahr. Dieser Anstieg ist in erster Linie auf die Auflösung der Rabattrückstellungen in den USA zurückzuführen, die im Zusammenhang mit Programmen zur Patientenunterstützung gewährt wurden, sowie auf Preisanstiege in den USA. Die Anzahl der zugrunde liegenden verkauften Einheiten stieg jedoch um 1% und war vor allem auf die anhaltend starke Nachfrage in Japan und den Schwellenländern sowie auf die Indikation digitale Ulzerationen in Europa (insbesondere in Deutschland und Italien) zurückzuführen. Auch in den Ländern, in denen Opsumit noch nicht erhältlich ist, bleibt die Nachfrage nach Tracleer unverändert stark. % Veränderung in CHF Millionen 1. Halbjahr Halbjahr 2013 in CHF bei kwk Opsumit 53 Tracleer Veletri Ventavis Valchlor 3 Zavesca Sonstige Total Produktumsatz Veletri Die Umsätze von Veletri (Epoprostenol zur Injektion) beliefen sich in der ersten Jahreshälfte 2014 auf CHF 31 Millionen, ein Anstieg um 127% bei kwk gegenüber demselben Zeitraum Dieser Anstieg wurde getragen von einer anhaltend starken Aufnahme in Japan (als Epoprostenol ACT ) und weiter gestützt von einem wachsenden Anteil am Markt für intravenöses Epoprostenol in den USA sowie den verschiedenen anderen Märkten, in denen das Produkt eingeführt wurde, wie etwa Grossbritannien, Spanien, den Niederlanden und Italien. Ventavis Die Umsätze von Ventavis (Iloprost) in den USA lagen in der ersten Jahreshälfte 2014 bei CHF 58 Millionen, ein Anstieg um 15% bei kwk. Dieser Anstieg beruhte ausschliesslich auf Preissteigerungen, Lagerveränderungen bei Distributoren sowie der Auflösung von Rabattrückstellungen, während das Umsatzvolumen aufgrund des Wettbewerbsdrucks weiter zurückging. Dieser Druck wird mit der Markteinführung eines Konkurrenzproduktes in den USA im zweiten Quartal 2014 weiter auf hohem Niveau bestehen bleiben und dürfte sich Ende dieses Jahres oder 2015 infolge möglicher Markteintritte von Generika weiter verschärfen

7 Arzneimittelspezialiäten KERNREINGEWINN UND KERNREINGEWINN PRO AKTIE (EPS) Valchlor Die Umsätze von Valchlor (mechlorethamine) beliefen sich in der ersten Jahreshälfte 2014 auf CHF 3 Millionen. Valchlor wurde im November 2013 zuerst in den USA zur Behandlung des kutanen T-Zell-Lymphoms (cutaneous T-cell lymphoma, CTLC) des Typs Mycosis fungoides im Stadium IA oder IB bei Patienten mit vorangegangener topischer Hauttherapie eingeführt. Im März 2014 konnte der Ausbau des Verkaufsteams abgeschlossen werden, und das Unternehmen arbeitet nun auch mit Dermatologen ausserhalb der Kompetenzzentren für CTLC zusammen. % Veränderung in CHF Millionen 1. Halbjahr Halbjahr 2013 in CHF bei kwk Kerngewinn Kernfinanzaufwand (1) (9) Kernsteueraufwand (43) (53) Zavesca Die Umsätze von Zavesca (Miglustat) lagen im ersten Halbjahr 2014 bei CHF 54 Millionen, ein Anstieg um 18% bei kwk im Vergleich zum selben Zeitraum Diese Leistung beruhte in erster Linie auf der starken Patientennachfrage in der Indikation Niemann-Pick-Typ C ausserhalb der USA. Im Marktsegement Typ-1-Gaucher-Krankheit zeigte Zavesca bei relativ stabiler Nachfrage und positiver Preisentwicklung in den USA weiterhin eine robuste Leistung. Kernreingewinn Anzahl Aktien (Millionen) Verwässerter Kerngewinn pro Aktie (EPS) (CHF) Eine vollständige Überleitung der Kernergebnisse auf US-GAAP findet sich unter KERNBETRIEBSAUFWAND % Veränderung in CHF Millionen 1. Halbjahr Halbjahr 2013 in CHF bei kwk Kernumsatzkosten Kernaufwand F&E (1) 1 Kernaufwand Vertrieb und Verwaltung (SG&A) Kernbetriebsaufwand Das Kernfinanzergebnis resultiert in erster Linie aus den Zinsaufwendungen in Höhe von CHF 6 Millionen für die Anleihe über CHF 235 Millionen sowie einem Nettogewinn von CHF 4 Millionen aus Absicherungsgeschäften und Wechselkurseffekten. Der Kernsteueraufwand von CHF 43 Millionen bedeutet eine Kernsteuerrate von 10%. Diese Steuerrate resultiert aus dem gewichteten Durchschnitt von verschiedenen Gewinnen und Steueraufwendungen in den Ländern in denen Actelion tätig ist. Der verwässerte Kerngewinn pro Aktie belief sich in der ersten Jahreshälfte 2014 auf CHF 3,25, ein Anstieg um 48% bei kwk im Vergleich zum selben Zeitraum im Vorjahr. Der Kerngewinn von CHF 2,34 pro Aktie für das erste Halbjahr 2013 wurde unter Verwendung des für jede Anpassung aktuellen Steuersatzes neu berechnet (zuvor CHF 2,39 unter Verwendung eines durchschnittlichen Mischsatzes). Kernumsatzkosten Die Kernumsatzkosten beliefen sich in der ersten Jahreshälfte 2014 auf CHF 104 Millionen, ein Anstieg um 6% bei kwk gegenüber demselben Zeitraum 2013, entsprechend den gesteigerten Produktumsätzen. ERGEBNISSE NACH US-GAAP Kernaufwand F&E Die Kernausgaben für Forschung und Entwicklung unter Ausschluss von aktienbasierten Vergütungen, Amortisationen und Abschreibungen betrugen im ersten Halbjahr 2014 CHF 166 Millionen, ein Anstieg um 1% bei kwk gegenüber demselben Zeitraum 2013, da die Kosten für die klinische Entwicklung leicht anstiegen. % Veränderung in CHF Millionen 1. Halbjahr Halbjahr 2013 in CHF bei kwk Einkünfte Kernaufwand Vertrieb und Verwaltung (SG&A) Die Kernaufwendungen für Vertrieb und Verwaltung (selling, general and administration, SG&A) unter Ausschluss von aktienbasierten Vergütungen, Amortisationen und Abschreibungen sowie der Veränderungen der Wertberichtigungen auf nicht gesicherte Forderungen beliefen sich in der ersten Jahreshälfte 2014 auf CHF 301 Millionen, ein Anstieg um 11% bei kwk gegenüber demselben Zeitraum des Vorjahrs. Dieser Anstieg ist vollumfänglich auf die Kosten zurückzuführen, die im Zusammenhang mit der Einführung von Opsumit, Valchlor und Veletri auf verschiedenen Märkten weltweit entstanden. Der Anteil der Aufwendungen für allgemeine Verwaltungsaufgaben blieb unverändert, da Actelion auch weiterhin die betrieblichen Ausgaben sorgfältig kontrolliert. KERNGEWINN % Veränderung in CHF Millionen 1. Halbjahr Halbjahr 2013 in CHF bei kwk Produktumsatz Betriebsgewinn Reingewinn Unverwässerter Gewinn pro Aktie (EPS) (CHF) Verwässerter Gewinn pro Aktie (EPS) (CHF) Der Betriebsgewinn nach US-GAAP schliesst folgende, nicht im Kerngewinn enthaltene Positionen mit ein: Abschreibungen und Amortisationen in Höhe von CHF 50 Millionen (1. Halbjahr 2013: CHF 39 Millionen). Aktienbasierte Vergütungen in Höhe von CHF 25 Millionen (1. Halbjahr 2013: CHF 25 Millionen). Veränderungen der Wertberichtigungen auf nicht gesicherte Forderungen in Höhe von CHF 1 Million (1. Halbjahr 2013: CHF 8 Millionen). Kosten der Höherbewertung von zukünftigen Zahlungen im Zusammenhang mit Valchlor in Höhe von CHF 2 Millionen. Der Betriebsgewinn für das erste Halbjahr 2013 enthielt Kosten für ein abgeschlossenes Schiedsverfahren in Höhe von CHF 13 Millionen. 12 Kernbetriebsaufwand (571) (553) 3 7 Kerngewinn Im ersten Halbjahr 2014 belief sich der Kerngewinn auf CHF 421 Millionen gegenüber CHF 331 Millionen im selben Zeitraum 2013, ein Anstieg um 35% bei kwk. Unter Ausschluss der Auflösungen von Rückstellungen für Rabatte in den USA stieg der Kerngewinn um 21%, dies infolge der soliden zugrunde liegenden betrieblichen Leistungen bei gleichzeitig weiterhin straffer Kostenkontrolle. Der Reingewinn nach US-GAAP schliesst folgende, nicht im Kernreingewinn enthaltene Positionen mit ein: Zinsen in Höhe von CHF 10 Millionen im Zusammenhang mit dem abgeschlossenen Rechtsstreit mit Asahi Steuervergünstigung in Höhe von CHF 121 Millionen aufgrund der Wertberichtigung im Zusammenhang mit dem Rechtsstreit mit Asahi Steuereffekte in Höhe von CHF 6 Millionen auf Nicht-Kernbetriebs aufwendungen (1. Halbjahr 2013: CHF 18 Millionen) 13

8 ÜBERLEITUNG VON CASHFLOW ZU NETTO-CASH-BESTAND VERKÜRZTE BILANZ in CHF Millionen Sechs Monate bis 30. Juni 2014 Sechs Monate bis 30. Juni 2013 in CHF Millionen 30. Juni Dezember 2013 Veränderung in CHF Cashflow aus operativer Tätigkeit (ohne Vergleichskosten aus Rechtsstreit) Erwerb von Sachanlagen, immateriellen und anderen Vermögenswerten (14) (14) Erwerb eines Unternehmens Vergleichskosten für Rechtsstreit (458) Freier Cashflow aus operativer Tätigkeit (213) 285 Auflösung der (gebundenen) Mittel für Rechtsstreit 609 (250) Mittelrückfluss an Aktionäre (133) (366) Aktienrückkäufe über die 1. Linie (392) Erlöse aus der Ausübung von Aktienoptionen Sonstige Posten 11 2 Freier Cashflow 69 (269) Bruttoliquidität* freie Mittel Bruttoliquidität gebunden 613 (613) Forderungen aus Lieferungen und Leistungen und sonstige Forderungen, netto Sonstige kurzfristige Vermögenswerte (27) Sachanlagen (13) Immaterielle Vermögenswerte (29) Goodwill Sonstige langfristige Vermögenswerte Total Vermögenswerte 2,547 3,030 (483) Rückstellung für Gerichtsverfahren 456 (456) Sonstige kurzfristige Verbindlichkeiten (139) Finanzverbindlichkeiten in CHF Millionen Sechs Monate bis 30. Juni 2014 Sechs Monate bis 30. Juni 2013 Nettoliquidität ohne Verfügungsbeschränkung* Anfangssaldo Freier Cashflow 69 (269) Nettoliquidität ohne Verfügungsbeschränkung* Schlusssaldo *Liquide Nettomittel ohne Verfügungsbeschränkung beinhalten liquide Mittel und Bareinlagen plus kurzfristige Einlagen minus langfristige Finanzverbindlichkeiten. Rundungsbedingte Rechendifferenzen sind möglich. Wie im März 2014 bekannt gegeben, lehnte der Supreme Court von Kalifornien den Antrag von Actelion auf Überprüfung der Entscheidung des Court of Appeal ab, in der das im November 2011 gefällte Urteil gegen Actelion im Verfahren Asahi Kasei Pharma Corp. gegen Actelion Ltd. et al. bestätigt worden war. Sonstige langfristige Verbindlichkeiten (5) Total Verbindlichkeiten 721 1,321 (600) Aktienkapital und kumulierte Reserven 2,418 2, Eigene Aktien (592) (543) (49) Total Eigenkapital 1,826 1, Total Verbindlichkeiten und Eigenkapital 2,547 3,030 (483) *Bruttoliquidität enthält Zahlungsmitteläquivalente und kurzfristige Geldanlagen. Rundungsbedingte Rechendifferenzen sind möglich. Dementsprechend leistete Actelion eine Zahlung von CHF 458 Millionen aus gebundenen Mitteln in Höhe von CHF 609 Millionen. Die daraus verbliebenen restlichen Mittel in Höhe von CHF 151 Millionen wurden frei gegeben. Der Mittelrückfluss an die Aktionäre aufgrund der Dividendenzahlung vom 15. Mai 2014 belief sich auf CHF 133 Millionen. In der ersten Jahreshälfte 2014 übten Mitarbeiterinnen und Mitarbeiter von Actelion 3,6 Millionen Aktienoptionen aus (dies führte zu Erlösen in Höhe von CHF 187 Millionen) und erhielten 0,9 Millionen gesperrte Aktieneinheiten (RSUs, restricted share units). Als Teil der laufenden Bemühungen zur Abschwächung von Verwässerungseffekten hat das Unternehmen 4,3 Millionen (CHF 392 Millionen) eigene Aktien über die erste Handelslinie zurückgekauft

9 ÜBERLEITUNG KERNERGEBNISSE AUF US-GAAP 1. Halbjahr 2014 in CHF Millionen Ergebnisse nach US-GAAP Abschreibungen, Amortisationen und Wertberichtigungen aktienbasierte Vergütungen Veränderung der Wertberichtigungen auf Forderungen Meilensteine oder Einkünfte aus vertraglichen Vereinbarungen Rechtsstreitigkeiten oder Schlichtungen Sonstige Unternehmenszusammenschlüsse Kernergebnisse Produktumsatz Einkünfte aus vertraglichen Vereinbarungen 1 (1) Total Nettoeinkünfte 993 (1) 993 Herstellungskosten des Verkaufs Forschung und Entwicklung Aufwand für Vertrieb und Verwaltung Amortisation immaterieller Vermögenswerte Total Betriebsaufwand (106) 2 (104) (190) (166) (320) 6 14 (1) (301) (30) 30 (646) (1) 2 (571) Betriebsgewinn (1) (1) Finanzergebnisse (11) 10 (1) Gewinn vor Steuern (1) (1) Steuern 84 (2) (4) 0 0 (121) (43) Reingewinn (1) (1) 10 2 (121) 378 Anzahl Aktien zur Berechnung (Millionen) Verwässerter Gewinn pro Aktie (EPS) (CHF) 116, , (0.01) (0.01) (1.04)

10 HALBJAHRESBERICHT 2014 FINANCIAL STATEMENTS 18 19

11 18 19 INTERIM INCOME STATEMENTS STATEMENTS OF COMPREHENSIVE INCOME Six months ended June 30, (in CHF thousands, except per share amounts) Notes (unaudited) (unaudited) Net revenue Product sales , ,068 Contract revenue Total net revenue 993, ,840 Operating expenses 1 Cost of sales 2 (106,017) (102,359) Research and development (190,280) (192,592) Selling, general and administration (319,516) (296,194) Amortization of acquired intangible assets (30,412) (18,733) Arbitration settlement - (12,881) Total operating expenses (646,225) (622,759) Operating income 347, ,081 Six months ended June 30, (in CHF thousands) (unaudited) (unaudited) Net income (loss) 420, ,452 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 865 (3,184) Amortization of components of net periodic benefit costs Other comprehensive income (loss), net of tax 865 (2,784) Comprehensive income (loss) 421, ,668 The accompanying notes form an integral part of these consolidated financial statements. Interest on litigation 10 (9,814) (19,722) Interest income (expense), net 7/9 (4,842) (4,920) Other financial income (expense), net 7 3,532 (3,614) Total financial income (expense) (11,124) (28,256) Income before income tax benefit (expense) 336, ,825 Income tax benefit (expense) 84,387 (34,373) Net income (loss) 420, ,452 Basic net income (loss) per share Weighted-average number of common shares (in thousands) 111, ,293 Diluted net income (loss) per share Weighted-average number of common shares (in thousands) 116, ,154 1 Includes stock-based compensation as follows: Research and development (10,679) (10,927) Selling, general and administration (13,988) (14,385) Total stock-based compensation (24,667) (25,312) 2 Excludes amortization of intangible assets as presented separately. The accompanying notes form an integral part of these consolidated financial statements ACTELION FINANCIAL REPORT 2014

12 20 21 BALANCE SHEETS STATEMENTS OF CASH FLOWS (in CHF thousands, except number of shares) Notes June 30, 2014 December 31, 2013 (unaudited) (audited) Assets Current assets Cash and cash equivalents 6 947, ,640 Cash and investments restricted for litigation 7-612,537 Short-term deposits - 250,747 Derivative instruments 7 3,261 10,546 Trade and other receivables, net 8 433, ,915 Inventories 60,212 53,241 Other current assets 32,567 58,937 Total current assets 1,477,045 2,019,563 Non-current assets Property, plant and equipment, net 367, ,092 Intangible assets, net 436, ,224 Goodwill 3 126, ,392 Deferred tax assets 4 118,108 16,931 Other non-current assets 7 22,105 20,599 Total non-current assets 1,070,211 1,010,238 Total assets 2,547,256 3,029,801 Liabilities and shareholders' equity Current liabilities Trade and other payables 80, ,614 Accrued expenses 285, ,399 Litigation provision ,118 Other current liabilities 10,948 10,874 Total current liabilities 377, ,005 Non-current liabilities Long-term financial debt 9 235, ,284 Pension liability 11 22,383 28,685 Contingent considerations 3 78,473 76,776 Other non-current liabilities 8,315 8,048 Total non-current liabilities 344, ,793 Total liabilities 721,538 1,320,798 Shareholders' equity 12 Common shares (par value CHF 0.50 per share, authorized 173,899,264 and 173,901,764 shares; issued 120,275,927 shares in 2014 and 2013, respectively) 60,138 60,138 Additional paid-in capital 245, ,502 Accumulated profit 2,302,664 1,882,266 Treasury shares, at cost (592,473) (542,558) Accumulated other comprehensive income (loss) 13 (190,480) (191,345) Total shareholders' equity 1,825,718 1,709,003 Total liabilities and shareholders' equity 2,547,256 3,029,801 Six months ended June 30, (in CHF thousands) (unaudited) (unaudited) Cash flow from operating activities Net income (loss) 420, ,452 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation and amortization 49,745 38,833 Stock-based compensation, incl. treasury shares to members of Board of Directors 25,114 25,813 Excess tax benefits from share-based payment arrangements (8,090) (931) Deferred revenue (776) (984) Deferred taxes (104,891) (2,614) (Gains) Losses on derivative instruments 8,484 6,469 Interest expense on bonds and litigation 15,801 24,924 Accretion expense on contingent considerations 1,812 (2,340) Changes in operating assets and liabilities: Litigation provision (457,700) - Trade and other receivables (26,196) (36,830) Inventories (6,939) (507) Trade and other payables (21,543) 26,927 Changes in other operating cash flow items (94,374) 20,981 Net cash flow provided by (used in) operating activities (199,155) 299,193 Cash flow from investing activities Cash and cash equivalents released from (restricted for) litigation 608,698 (250,000) Purchase of short-term and long-term deposits (100,000) - Proceeds from short-term and long-term deposits 350,747 - Purchase of property, plant and equipment (9,689) (11,631) Purchase of intangible assets (2,191) (1,986) Purchase of other non-current assets (1,794) - Acquisition of a business, incl. contingent consideration payments (169) - Net cash flow provided by (used in) investing activities 845,602 (263,617) Cash flow from financing activities Dividend payment (133,389) (113,297) Payments on capital leases (30) (30) Proceeds from exercise of stock options, net of expense 187,493 59,546 Purchase of treasury shares (391,607) (349,261) Proceeds from sale of treasury shares - 96,734 Excess tax benefits from share-based payment arrangements 8, Net cash flow provided by (used in) financing activities (329,443) (305,377) Net effect of exchange rates on cash and cash equivalents 2,557 1,061 Net change in cash and cash equivalents 319,561 (268,740) Cash and cash equivalents at beginning of period 627,640 1,022,272 Cash and cash equivalents at end of period 947, ,532 The accompanying notes form an integral part of these consolidated financial statements. The accompanying notes form an integral part of these consolidated financial statements

13 22 23 STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY Common shares Accum. other comprehensive (in CHF thousands, except number of shares) Shares Amount Additional paid-in capital Accum. profit Treasury shares income (loss) Shareholders equity NOTES TO THE UNAUDITED INTERIM (CHF thousands, except share and per share amounts) At January 1, ,930,722 63, ,580 1,429,724 (718,984) (199,063) 1,518,644 Comprehensive income (loss), net of tax: Net income (loss) , ,452 Other comprehensive income (loss) (2,784) (2,784) Comprehensive income (loss), net of tax ,452 - (2,784) 196,668 Excess tax benefits (underrealization) from share-based payment arrangements - - (3,029) (3,029) Transactions in treasury shares (2,664,962) - (63,218) - (129,261) - (192,479) Stock-based compensation expense , ,467 Cancelation treasury shares (share repurchase program) - (3,249) (283,517) - 286, Dividend payment - - (113,297) (113,297) At June 30, 2013 (unaudited) 110,265,760 60, ,986 1,629,176 (561,479) (201,847) 1,431,974 Comprehensive income (loss), net of tax: Net income (loss) , ,090 Other comprehensive income (loss) ,502 10,502 Comprehensive income (loss), net of tax ,090-10, ,592 Excess tax benefits (underrealization) from share-based payment arrangements Transactions in treasury shares 862,667 - (30,514) - 18,921 - (11,593) Stock-based compensation expense , ,499 At December 31, 2013 (audited) 111,128,427 60, ,502 1,882,266 (542,558) (191,345) 1,709,003 Comprehensive income (loss), net of tax: Net income (loss) , ,398 Other comprehensive income (loss) Comprehensive income (loss), net of tax , ,263 Excess tax benefits (underrealization) from share-based payment arrangements - - 8, ,081 Transactions in treasury shares 181,570 - (153,752) - (49,915) - (203,667) Stock-based compensation expense , ,427 Dividend payment - - (133,389) (133,389) At June 30, 2014 (unaudited) 111,309,997 60, ,869 2,302,664 (592,473) (190,480) 1,825,718 The accompanying notes form an integral part of these consolidated financial statements. NOTE 1. BASIS OF PRESENTATION The unaudited 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, All US GAAP references relate to the Accounting Standards Codification ( ASC or Codification ) established by the Financial Accounting Standards Board ( FASB ) as the single authoritative source of US GAAP to be applied by non-governmental entities. All amounts are presented in Swiss francs ( CHF ), unless otherwise indicated. In addition, certain prior period amounts within the consolidated financial statements and related notes have been reclassified to conform to the current presentation. Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make judgments, assumptions and estimates that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. On an on-going basis, management evaluates its estimates, including those related to revenue recognition for contract revenue, allowance for doubtful accounts, stock-based compensation, intangible assets, clinical trial and rebate accruals, impairment of indefinite lived intangibles including goodwill, provisions, contingent considerations arising from acquisitions, loss contingencies and income taxes. The Group bases its estimates on historical experience and on various market-specific and other relevant assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates. In 2014, management changed its estimate related to rebate accruals which translates into an increase in net income of CHF 53 million or CHF 0.48 per share basic and CHF 0.46 per share diluted. NOTE 2. ADOPTION OF NEW ACCOUNTING POLICIES ASU , Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists In 2014, the Group adopted prospectively the requirements of ASU , Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, ( ASU ), an update to the Income Taxes Topic of FASB ASC ( ASC 740 ). ASU requires an entity to present unrecognized tax benefits as a decrease in a net operating loss, similar tax loss or tax credit carryforward if certain criteria are met. The determination of whether a deferred tax asset is available is based on the unrecognized tax benefit and the deferred tax asset that exists at the reporting date and presumes disallowance of the tax position at the reporting date. ASU became effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, As the amended guidance only clarified the presentation of such items but did not change their nature, recognition or measurement requirements, the adoption did not have an impact on the Group s financial position, results of operations and cash flows See Note 4. Income taxes

14 24 25 NOTE 3. ACQUISITIONS Ceptaris In 2013, the Group acquired 100 percent of privately-held Ceptaris Therapeutics, Inc. ( Ceptaris ), a specialty pharmaceutical company based in Malvern, Pennsylvania, US. The transaction was recorded as a business combination in compliance with the requirements of the Business Combinations Topic of FASB ASC ( ASC 805 ). In conjunction with the acquisition, the Group assumed a contingent consideration related to achievement of future performance and commercialization milestones for a maximum undiscounted amount of USD 510 million as well as a contingent consideration related to future royalty stream payments. Since arising from the acquisition, the contingent considerations are re-measured at fair value at each reporting date using Level 3 inputs. The resulting fair value adjustments of the royalty contingency are included in costs of sales and of the performance milestones contingencies in selling, general and administration expenses. Since denominated in USD, the contingent considerations are revalued at each reporting date As of June 30, 2014, the fair value of the contingent considerations amounts to CHF 80.5 million (USD 90.5 million). Thereof, CHF 4.1 million (USD 4.6 million) are included in other current liabilities and CHF 76.4 million (USD 85.9 million) are disclosed as contingent considerations in the consolidated balance sheet. The table below states the changes in the contingent considerations for the six months ended June 30, 2014: December 31, 2013 Contingent consideration expense Settlements Foreign currency translation June 30, 2014 USD CHF USD CHF USD CHF CHF USD CHF 88,651 78,912 2,031 1,808 (190) (169) (11) 90,492 80,540 In determining the fair value of the contingent considerations the Group evaluates probabilities and timing of milestone events occurrence. Further, management develops cash flow projections on expected net revenues and royalty payments, which are then deferred, probability-weighted and adjusted for the time value of money in order to derive their reporting date fair value. At June 30, 2014, the Group applied a discount rate of 9% for the contingent consideration arising from the royalty streams. This rate corresponds to the weighted-average costs of capital ( WACC ) and is calculated by weighting the required returns for interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. Management believes that the WACC appropriately captures a market participant s view of the risk associated with the expected contingent consideration payments because such payments are impacted by broader, non-diversifiable industry and business risks which are not completely captured in developing the probability weighted-payment estimates. The following table provides the significant unobservable inputs applied on the fair value measurement of the contingent considerations for the periods presented: Assumptions Level 3 fair value measurement Valuation technique Unobservable input June 30, 2014 December 31, 2013 Probability of performance milestone payments 0% 0% Contingent considerations Probability of royalty payments 100% 100% arising from acquisitions Discounted cash flows Expected period of payments Discount rate 9% 9% If projections are not successfully developed, the sales and profitability of the Group may be adversely affected in future periods. In addition, an increase in the probability of performance milestone payments or a significant decrease in the discount rate could lead to a significantly higher fair value measurement of the contingent considerations in the period of revaluation. GeneraMedix In 2009, the Group acquired from privately-held GeneraMedix Inc. ( GXI ) a new formulation of epoprostenol sodium with improved thermal stability which was accounted for as a business combination in accordance with the requirements of the guidance codified in ASC 805. In conjunction with the acquisition, the Group assumed a contingent consideration for a maximum undiscounted amount, net of prior period settlements, of USD 5 million. The contingent consideration is related to future patent issuance events in various markets and thus re-measured at fair value at each reporting date using Level 3 inputs. The resulting fair value adjustments of the consideration are included in selling, general and administration expenses. Since denominated in USD, the contingent consideration is revalued at each reporting date. As of June 30, 2014, the fair value of the contingent consideration amounts to CHF 4.2 million (USD 4.7 million). Thereof, CHF 2.2 million (USD 2.4 million) are included in other current liabilities and CHF 2 million (USD 2.3 million) are disclosed within the non-current contingent considerations. The table below states the changes in the contingent consideration during the six months ended June 30, 2014: December 31, 2013 Contingent consideration expense Foreign currency translation June 30, 2014 USD CHF USD CHF CHF USD CHF 4,701 4,184 (1) (1) - 4,700 4,183 In determining the fair value of the contingent consideration the Group considers present value calculations of the expected cash-outflows as well as probabilities of amounts and timing of settlement of the contingencies. At June 30, 2014, the Group applied a discount rate of 6.45% (December 31, 2013: 6.89%). This discount rate corresponds to the Bloomberg Composite BB yield (December 31, 2013: 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 for the periods presented: Assumptions Level 3 fair value measurement Valuation technique Unobservable input June 30, 2014 December 31, 2013 Probability of patent issuance 100% 100% Contingent consideration Discounted cash flows Period of patent issuance arising from acquisitions Discount rate 6.45% 6.89% 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 5 million. Goodwill Except for the effect of foreign currency translation, the net carrying amount of goodwill has not been adjusted in the current reporting period: Balance at January 1 Translation effects Balance at June ,392 (22) 126,

15 26 27 NOTE 4. INCOME TAXES The following table sets forth the current and deferred income tax benefit (expense) for the periods presented: June 30, 2014 December 31, 2013 June 30, 2013 Current tax (expense) (20,504) (66,791) (36,988) Deferred tax benefit (expense) 104,891 89,592 2,615 Total income tax benefit (expense) 84,387 22,801 (34,373) The effective income tax benefit at December 31, 2013, and at June 30, 2014, resulted primarily from the reduction in the Group s pre-existing valuation allowance on deferred tax assets. In conjunction with the acquisition of Ceptaris and the corresponding recognition of a deferred tax liability on the acquired intangible assets (See Note 2. Acquisitions and Note 5. Income taxes in the audited consolidated financial statements for the twelve months ended December 31, 2013), in 2013, the Group released CHF 86.3 million of its valuation allowance. In accordance with ASC 740, deferred tax liabilities represent a source of taxable income and provide for future realizability of deferred tax assets. Following the settlement of the Asahi litigation, in 2014, management revised its estimates about the Group s future taxable income and concluded that based on the weight of available evidence it is more-likely-than-not that the deferred tax assets previously subject to a valuation allowance will be realized in the future. This change in estimate resulted in a release of the valuation allowance recorded as of December 31, 2013, and the corresponding recognition of a deferred tax benefit of CHF 95.1 million or CHF 0.86 per share basic and CHF 0.82 per share diluted. In addition, upon adoption of ASU (See Note 2. Adoption of new accounting policies), the Group presents available unrecognized tax benefits of CHF 2.1 million, which relate to net operating loss and tax credit carryforwards, as reduction to the deferred tax assets. NOTE 5. EARNINGS PER SHARE Basic and diluted earnings per share are based on weighted-average common shares and exclude shares that would have an anti-dilutive effect. For the six months ended June 30, 2014, 90,353 anti-dilutive shares were excluded from the EPS calculation (June 30, 2013: 8,923,779). The following table sets forth the basic and diluted earnings per share calculations: June 30, 2014 June 30, 2013 Basic Diluted Basic Diluted Numerator Net income (loss) 420, , , ,452 Net income (loss) available for earnings per share calculation 420, , , ,452 Denominator Weighted-average number of common shares 111,228, ,228, ,293, ,293,320 Incremental shares for assumed conversion: Stock-based awards - 4,962,714-2,860,219 Total average equivalent shares 111,228, ,191, ,293, ,153,539 Earnings (loss) per share NOTE 6. CASH AND CASH EQUIVALENTS Cash and cash equivalents consisted of the following at: June 30, 2014 December 31, 2013 Cash 942, ,478 Short-term bank deposits 4,926 5,162 Total 947, ,640 For the six months ended June 30, 2014, the Group utilized CHF million of cash to acquire new treasury shares through its second share repurchase program See Note 12. Shareholders equity. NOTE 7. FINANCIAL ASSETS AND LIABILITIES The following table states the Group s financial assets and liabilities carried at fair value: June 30, 2014 December 31, 2013 Total Level 1 Level 2 Total Level 1 Level 2 Financial assets carried at fair value 1 Cash and cash equivalents 947, , , ,640 - Cash and investments restricted for litigation: Restricted cash , ,000 - Restricted debt securities , ,537 - Derivative financial instruments 3,261-3,261 10,546-10,546 Total 950, ,201 3,261 1,250,723 1,240,177 10,546 Financial liabilities carried at fair value 1 Derivative financial instruments 3 1,232-1, Contingent considerations See Note 3. Acquisitions for Level 3 disclosures Total 1,232-1, For the six months ended June 30, 2014 and 2013, no transfers to or from Level 1 and Level 2 took place. 2 Included in cash and investments restricted for litigation. 3 Included in other current liabilities. 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 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 records all derivatives on the balance sheet at fair value with changes in fair value reported in other financial income (expense), net. 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 derived from Reuters or Bloomberg, which include foreign currency spot rates, forwards points and stated maturities. 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. As of June 30, 2014, and as of December 31, 2013, the Group did not have any derivatives which were offset in accordance with ASC or ASC ; or subject to an enforceable master netting arrangement or similar agreement

16 28 29 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, 2014 and Contract or underlying principal amounts indicate the volume of outstanding positions at the balance sheet date and do not represent amounts at risk. Amount of gain recognized in income on derivatives Amount of (loss) recognized in income on derivatives Derivative financial instruments not designated as hedging instruments Contract or underlying principal amount Location of gain or (loss) recognized in income on derivatives June 30, 2014 Forward rate contracts 443,556 Other financial income (expense), net 8,402 (8,484) Total 443,556 8,402 (8,484) June 30, 2013 Forward rate contracts 238,672 Other financial income (expense), net 7,140 (9,033) Total 238,672 7,140 (9,033) Asset derivatives Liability derivatives Derivative financial instruments not designated as hedging instruments Balance Sheet location Fair value Balance Sheet location Fair value June 30, 2014 Forward rate contracts Derivative instruments 3,261 Other current liabilities 1,232 Total 3,261 1,232 December 31, 2013 Forward rate contracts Derivative instruments 10,546 Other current liabilities 33 Total 10, As of June 30, 2014, all foreign currency forwards are privately negotiated OTC contracts with maturities of twelve months or less and entered into with counterparties with a Standard & Poor s ( S&P ) credit rating ranging from A to AA (December 31, 2013: S&P rating ranging from A to AA). Derivative financial instruments include gross unrealized losses of CHF 8.5 million (December 31, 2013: gross unrealized gains of CHF 3.2 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. 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. For concentrations of credit risk related to the Group s money market instruments and derivatives see Note 14. Concentrations. Cash and investments restricted for litigation In January 2012, in conjunction with the Asahi litigation, certain insurance companies issued USD million in surety bonds on behalf of the Group 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 cash or investments in order to secure the surety bonds. As of December 31, 2013, the Group had pledged USD 250 million in investments and CHF 390 million in cash as collateral. With the settlement of the litigation award the amounts pledged were released and the cash returned to the Group. Investment in associated companies In 2012, the Group acquired 20.1% of privately-held EchoSense Inc., Tortola, British Virgin Islands ( EchoSense ) for a cash consideration of USD 5.1 million (CHF 4.5 million). In 2014, the Group increased its investment by additional 4% for a cash consideration of USD 2 million (CHF 1.8 million) thus holding 24.1% of the common stock of EchoSense as at June 30, EchoSense is a medical device company, which develops non-invasive and non-imaging signal processing technologies to extract parametric information regarding both the coronary arteries and the pulmonary system, including pulmonary blood pressure measurements. The technology could enable diagnose and evaluation, in real time, of the state of different cardiac and pulmonary diseases and thus improved treatment. The Group can at its option increase its investment in the common stock of EchoSense up to additional 2% depending on the success of ongoing clinical studies until December 31, Upon analyses under the Variable Interest ( VIE ) model (See Note 1. Description of business and summary of significant accounting policies in the audited consolidated financial statements for the twelve months ended December 31, 2013) the Group concluded that EchoSense is a VIE but the Group is not the primary beneficiary. This because Actelion neither has the power to control the clinical, strategic or financing activities that most significantly impact EchoSense s economic performance nor will the Group absorb the majority of the EchoSense s expected losses or receive the majority of its expected residual returns, or both. As such, the Group's maximum exposure to loss as a result of its involvement with EchoSense is the investment in common stock of EchoSense. In accordance with its accounting policy for investments in common stock where the Group can exercise significant influence over the operations of the investee, the Group applies the equity method and has recorded the investment at cost as other non-current assets. The aggregate carrying value of the EchoSense investment amounts to USD 5.9 million (CHF 5.3 million) at June 30, 2014, and to USD 4.2 million (CHF 3.7 million) at December 31, The Group adjusts quarterly the carrying amount of the investment in order to reflect its share of the earnings (losses) of EchoSense. For the six months ended June 30, 2014, the Group has recognized its share of loss of USD 0.3 million (CHF 0.2 million), which has been classified as other financial income (expense), net. For the six months ended June 30, 2013, the Group s share of loss amounted to USD 0.2 million (CHF 0.1 million). The basis difference between the carrying value of the investment and the Company s underlying net assets amounts to USD 4.8 million (CHF 4.2 million) at June 30, 2014, and is mainly related to not recognized IPR&D assets by the investee. The basis difference between the carrying value of the investment and the Company s underlying net assets amounted to USD 3.1 million (CHF 2.9 million) at December 31, 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. No such impairment indicators were noted for the periods presented. Financial liabilities carried at amortized cost The Group s financial liabilities carried at amortized cost relate to the issuance of a bond on December 7, 2011 (See Note 9. Borrowings) and are stated in the following table: June 30, 2014 December 31, 2013 Long-term financial debt 235, ,284 Total 235, ,284 Interest income (expense), net in the consolidated financial statement for the six months ended June 30, 2014, include interest expense of CHF 5.7 million (June 30, 2013: CHF 5.7 million) related to the interest payable to the bond holders, interest expense of CHF 0.3 million (June 30, 2013: CHF 0.3 million) related to the amortization of the bond premium and debt issuance costs and interest income of CHF 1.2 million (June 30, 2013: CHF 1.1 million) mainly related to interest received on the various cash accounts of the Group and its subsidiaries

17 30 31 NOTE 8. TRADE AND OTHER RECEIVABLES Trade and other receivables consisted of the following at: June 30, 2014 December 31, 2013 Trade receivables 398, ,465 Other receivables 43,567 24,606 Trade and other receivables, gross 441, ,071 Allowance for doubtful accounts (7,837) (9,156) Total trade and other receivables, net 433, ,915 As of June 30, 2014, approximately 29% of trade accounts receivables are due from public institutions funded by governmental agencies in certain Southern European countries (December 31, 2013: 40%). For the six months ended June 30, 2014, the Group transferred EUR 3.3 million (CHF 4 million) of its trade accounts receivable owned by foreign subsidiaries to third-party financial institutions without recourse. For the twelve months ended December 31, 2013, the Group transferred EUR 11.8 million (CHF 14.4 million) of its trade accounts receivable owned by 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 in both years 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 losses realized were not material. 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 canceled at the time of such notice. The 2011 bond is listed on the SIX Swiss Exchange. As of June 30, 2014, its fair value amounts to % (Level 1). The Group accounts for the 2011 bond at amortized cost. 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 recognized, using the effective interest rate method, as interest income (expense), net in the consolidated income statements. At June 30, 2014, other non-current assets include debt issuance costs of CHF 1.1 million (December 31, 2013: CHF 1.4 million). As of June 30, 2014, the Group recognized CHF 5.7 million interest expense related to the accrued interest payable to the bondholders on December 7, 2014, and CHF 0.3 million related to the amortization of the premium and the debt issuance cost, net. Credit facilities At June 30, 2014, the Group had unused credit lines of: a) CHF 9 million as margin cover for over-the-counter trades; b) CHF 5 million deployable for issuance of letters of credit; c) JPY 500 million (CHF 4.4 million) established as an overdraft facility and d) CHF 15.9 million as senior mortgage certificates. For concentrations of credit risk related to the Group s trade receivables see Note 14. Concentrations. NOTE 9. BORROWINGS The aggregate contractual maturities of all debt obligations due subsequent to June 30, 2014 are as follows: 2011 bond Payable on December 7, Type of payment Amount 2014 Annual interest 11, Repayment of debt incl. annual interest 246,457 Thereafter - Total 257,913 As of June 30, 2014, the total book value of all debt obligations was CHF million and consisted of CHF 235 million related to the principal amount of the bond issued in 2011 and CHF 0.2 million related to the unamortized portion of the premium received at issuance of the bond 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, The issue price was set at %. 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 cancelation. 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 NOTE 10. COMMITMENTS, CONTINGENCIES AND GUARANTEES Commitments In conjunction with the completion of its major facility projects, the Group has entered into capital commitments totaling CHF 5.5 million, which are expected to be paid in 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 14.5 million for 2014, CHF 10.2 million for 2015, CHF 7.1 million for 2016, CHF 6.7 million for 2017 and CHF 5.6 million for Contingencies 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 In its Third Amended complaint Asahi had asserted claims for 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, 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,

18 32 33 On November 18, 2011, the State Court issued final judgment in favor of Asahi for USD in compensatory damages, USD 30 million in punitive damages and USD 0.3 million in cost reimbursements. In addition, the judgment entitled Asahi to receive pre-judgment interest of USD 8.1 million and additional simple post-judgment interest of 10% p.a.. The Group appealed the entire judgment in December On December 19, 2013, the California Court of Appeal affirmed the amended final judgment that the State Court entered against Actelion in November On January 27, 2014, the Group filed a petition at the California Supreme Court requesting a review of the decision of the California Court of Appeal, which was denied in March Consequently, the Group paid USD million to satisfy the obligation and released the corresponding provision in March At December 31, 2013, the provision amounted to USD million (CHF million) and consisted of USD million related to the final amount awarded to Asahi and of USD million accrued for the cumulative estimated amount of interest. During 2014, the Group provided for further USD 10.6 million interest expense until the payment of the award. In conjunction with the appeal, in January 2012, the Group was required to provide surety bonds in total of USD million at the California Court of Appeal, US, in order to securitize the awards granted to Asahi by the State Court in California, US. With the satisfaction of judgment, in 2014, the surety bonds and the corresponding collateralized cash and investments were released - See Note 7. Financial assets and liabilities. Restructuring costs and accruals Based on the review of its strategic portfolio and the decision to re-focus its R&D efforts into specialty areas, the Group, in 2012, implemented measures to align the organization with the updated strategic nature and focus of its operations. As of December 31, 2013, all restructuring costs have been incurred and the corresponding obligations paid, except for CHF 0.9 million, which have been accrued at the cease-use date of leased property abandoned in conjunction with the restructuring. For the six months ended June 30, 2014, the Group amortized CHF 0.3 million of the accruals related to the lease termination. CHF 0.2 million thereof have been included in R&D expense and CHF 0.1 million in selling, general and administration expense in the consolidated income statement for As of June 30, 2014, the restructuring accruals amount to CHF 0.6 million. Other contingencies The Group is involved in commercial disputes in certain jurisdictions. The possible losses which might arise as a result of the remaining disputes range from CHF 0 million to CHF 1.3 million. As of July 18, 2014, the date these consolidated financial statements were available to be issued, the Group cannot reasonably estimate the final outcome and the timing of resolution of these disputes. NOTE 11. PENSION PLANS 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. 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 Plan insures base salary above CHF 150,000 and annual incentives, up to an aggregate maximum of CHF 842,400. It is funded through contributions by the Group and its employees. In addition, the Group maintains other pension plans outside Switzerland, which are not material to the Group. The Group uses a measurement date of December 31 for all pension plans. 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 9,466 9,635 Interest cost 3,438 2,882 Expected return on plan assets (3,605) (3,306) Amortization of net actuarial (gain) loss Net periodic benefit cost 9,299 9,611 1 For the six months ended June 30, 2013, the income tax effect on the amortization was not material to the Group - See Note 13. Accumulated other comprehensive income (loss). Guarantees In order to secure its obligations from derivative trading, cash pooling, overdraft facilities 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 85.2 million. In the ordinary course of business the Group has entered into certain guarantee contracts and letters of credit amounting to CHF 4.5 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 potential required future payments to be material. NOTE 12. SHAREHOLDERS EQUITY Conditional and authorized 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, 2014, the Group had conditional capital of CHF 26.8 million of which CHF 10.6 million relate to share option plans and CHF 16.2 million to convertible bonds and similar forms of financing

19 34 35 Movements in conditional capital for the periods presented are as follows: January 1, ,039 Forfeited Challenge Award options (226) Exercise of options - December 31, ,813 Forfeited Challenge Award options (1) Exercise of options - June 30, ,812 by its employees and RSU vestings. Further, members of the Board of Directors received 5,084 treasury shares acquired at an average price of CHF as compensation. Dividends The AGM on Mai 8, 2014, approved a cash dividend for 2013 of CHF 1.20 per share. Based on this approval, the Group distributed gross dividends of CHF million to its shareholders (2013: CHF million). The Annual General Meeting ( AGM ) on May 8, 2014, approved a modification of the Group s conditional capital to reduce the portion related to share option plans by CHF 6.6 million and to decrease the portion related to convertible bonds and similar forms of financing by CHF 6.7 million. In addition, the AGM permitted the creation of authorized share capital by an amount not exceeding CHF 6.5 million to be used for strategic partnering and financing business transactions purposes. The Group is currently undergoing mandatory legal procedures and expects these changes to become effective and be reflected into the Group s statement of shareholders equity by the end of the third quarter of Treasury shares At June 30, 2014, the Group held 8,965,930 treasury shares including those acquired via the share repurchase programs (December 31, 2013: 9,147,500). The average purchase price of all treasury shares held amounts to CHF (2013: CHF 59.31). Treasury shares are deducted from equity at their cost value and presented as a separate component in the consolidated statements of shareholders equity. The Group provides treasury shares in exchange for restricted stock units ( RSUs ) or option rights which vest or are exercised in accordance with the conditions of the Group s share-based payment plans - See Note 20. Stock-based compensation in the Group s audited consolidated financial statements for the year ended December 31, The Group intends to further use treasury shares, except for the shares acquired through the first Share Repurchase Program ( SRP I ), in order to satisfy its commitments arising out of its stock-based compensation programs or in order to offset dilution caused by the issuance of shares related to the Group s share-based payment plans, whichever is applicable. Treasury shares acquired via the SRP I In October 2010, the Group announced the repurchase of up to CHF 800 million of Actelion s common stock over the period of three years. The buyback, which was carried out via a second trading line on the SIX Swiss Exchange, was completed in August As at June 30, 2014, and December 31, 2013, the Group held total 6,147,500 treasury shares acquired at an average price of CHF through the SRP I. At the AGM on May 8, 2014, the shareholders approved the cancelation of these shares and the corresponding reduction of the issued share capital. The Group is currently undergoing mandatory legal procedures and expects to cancel the shares acquired via the SRP I and reduce the issued share capital accordingly by the end of the third quarter of Treasury shares acquired via the SRP II On December 5, 2013, the Group announced the repurchase of up to 10 million shares of Actelion s common stock over the period of three years. The buyback is carried out via the first trading line on the SIX Swiss Exchange. The repurchased shares will be used to service the Group s commitments arising out of its various stock-based compensation programs thus compensating for a potential dilution as a result of the share ownership schemes. For the six months ended June 30, 2014, the Group acquired 4,302,416 treasury shares through the SRP II at an average price of CHF and used 2,033,188 treasury shares acquired at an average price of CHF via the SRP II to offset the effect of option exercises by its employees and RSU vestings. At June 30, 2014, the Group held 2,818,430 shares acquired at an average purchase price of CHF via the SRP II. Treasury shares bought on the first trading line At June 30, 2014, the Group did not hold any shares acquired on the first trading line on the SIX Swiss Exchange except those purchased via the SRP II (December 31, 2013: 2,450,798 excluding SRP II). During 2014, the Group used 2,445,714 treasury shares acquired on the first trading line at an average price of CHF to offset the effect of option exercises 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, 2014 and 2013: Changes arising during period Accumulated OCI (loss), net of tax Reclassification or amortization through net income Translation effects June 30, 2014 January 1, 2014 Foreign currency translation adjustments 1 (170,254) (169,389) Not recognized components of net periodic benefit costs 2 (21,091) (21,091) Total accumulated OCI (loss) (191,345) (190,480) Changes arising during period Accumulated OCI (loss), net of tax Reclassification or amortization through net income Translation effects June 30, 2013 January 1, 2013 Foreign currency translation adjustments 1 (166,031) (3,169) - (15) (169,215) Not recognized components of net periodic benefit costs 3 (33,032) (15) (32,632) Total accumulated OCI (loss) (199,063) (3,184) (201,847) 1 Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries. 2 Relates to the amortization of actuarial (gains) losses on the Group s defined benefit plans See Note 11. Pension Plans. The amounts disclosed exclude income taxes amounting to CHF 1.5 million and CHF 1.5 million on January 1, and June 30, 2014, respectively. 3 Relates to the amortization of actuarial (gains) losses on the Group s defined benefit plans See Note 11. Pension Plans. The amounts disclosed exclude income taxes amounting to CHF 2.5 million and CHF 2.5 million on January 1, and June 30, 2013, respectively. NOTE 14. CONCENTRATIONS Cash and cash equivalents, derivatives and accounts receivable are financial instruments, which potentially subject the Group to concentrations of credit risk. The Group invests its excess cash in highly liquid money market instruments at major banks and other creditworthy financial institutions. The majority of these financial institutions has S&P credit ratings as of June 30, 2014, in a range from A to AAA. Some of these are also partially protected by a Swiss state guarantee. Cash and cash equivalents held by Group s subsidiaries with financial institutions with S&P ratings below A are not material to the Group as at June 30, Derivatives and other money market instruments mature on average within five months. The Group reviews on an ongoing basis the creditworthiness of counterparties to foreign exchange and interest rate agreements. At June 30, 2014, one financial institution with a S&P rating of AA accounts for 58% of the derivative financial instruments. The Group has not experienced and does not expect to incur any significant losses from failure of counterparties to perform under these agreements. With the settlement of the Asahi litigation, the concentrations which existed at December 31, 2013, and which related to cash and investments pledged as collateral, have been resolved

20 36 As of June 30, 2014, EUR 97.5 million (CHF million) of gross trade accounts receivable are due from public institutions funded by governmental agencies in Greece, Italy, Spain and Portugal (collectively referred to as Southern European countries ), thereof EUR 10.6 million are overdue for more than 365 days. The Group continues to monitor the macro-economic conditions in the region and to perform analyses on customer specific payment terms and patterns, in order to develop estimates and assumptions believed to be reasonable under the circumstances to adjust its allowance for doubtful accounts (See Note 1. Description of business and summary of significant accounting policies in the audited consolidated financial statements for the twelve months ended December 31, 2013). As a result of the analyses performed and of the improved cash collection activities during the current reporting period, the Group further adjusted its allowance for doubtful accounts and as of June 30, 2014, provided for EUR 3.3 million (CHF 4 million) related to the outstanding public sector receivables in Southern European countries (December 31, 2013: EUR 4.3 million). The Group continues to implement measures to further increase cash collection in these countries, including among others negotiations of payment plans or of non-recourse factoring, legal claims or interest charges for late payments. Product sales to public sector customers where collectibility cannot be reasonably assured are only recognized upon cash receipt. NOTE 15. SEGMENT AND GEOGRAPHIC INFORMATION The Group operates in one segment of discovering, developing and commercializing drugs for unmet medical needs. The Group currently derives product revenue from sales of Tracleer (bosentan), Zavesca (miglustat), Ventavis (iloprost), Veletri (epoprostenol for injection), Valchlor TM and Opsumit (macitentan). Contract revenue is derived from collaboration and service agreements with third parties. Product revenue attributable to individual countries is based on the location of the customer. The Group s geographic information is as follows: Switzerland United States Europe Other Total June 30, 2014 Product revenue from external customers 14, , , , ,588 Contract revenue from external customers Property, plant and equipment 333,919 30, , ,534 June 30, 2013 Product revenue from external customers 13, , , , ,068 Contract revenue from external customers Property, plant and equipment 352,937 33,376 1,600 2, ,491 NOTE 16. SUBSEQUENT EVENTS The Group has evaluated subsequent events through July 18, 2014, which represents the date the interim consolidated financial statements were available to be issued. All events requiring disclosure have been included in the respective notes of these consolidated financial statements. Actelion Pharmaceuticals Ltd Gewerbestrasse 16 CH-4123 Allschwill Switzerland Phone Fax info@actelion.com All trademarks are legally protected by their respective owners. Copyright 2014 Actelion Pharmaceuticals Ltd Details of Actelion Worldwide can be found on