Strong second half performance completes transformational year for Clinigen
Clinigen Group plc (AIM: CLIN, ‘Clinigen’ or the ‘Group’), the global pharmaceutical and services company, today provides a trading update for the 12 months ended 30 June 2016.
- Revenue and gross profit up 87% and 90% respectively driven by acquisitions and organic growth*
- Significant step up in performance in H2, driven by Clinical Trial Services, Specialty Pharma and Managed Access
- Specialty Pharma portfolio enhanced by acquisition of Totect and product line extension for Foscavir
- Integration of Idis and Link acquisitions substantially complete
Peter George, Chief Executive Officer of Clinigen Group said:
“The integration of Idis and Link Healthcare has transformed the Group into the global market leader in the management and supply of both unlicensed and Clinical Trial medicines.
“We had a strong second half performance, completing a transformational year. The newer products in our Specialty Pharma portfolio are making good progress, demonstrating the effectiveness of our revitalisation model and we saw another excellent year in the Clinical Trial Services division.
“We are entering the new financial year in an excellent position, having delivered on our key strategic objectives. A major focus for FY17 will be to develop our Global Access on-demand unlicensed offering to hospital pharmacists, an exciting opportunity for the Group.
“Our priorities now are to capitalise on our market leader positions, drive organic growth and continue to progress the revitalisation of our products.”
Revenue and gross profit increased by 87% and 90% respectively versus last year. The growth has been delivered by a combination of the acquisitions of Idis in April 2015 and Link Healthcare in October 2015, as well as organic growth in the underlying business.
The Specialty Pharma division, representing 31% of Group gross profits, achieved good growth. Foscavir performed as expected during the year and the Foscarnet in bags product line extension, announced in May 2016, enhances the product and is expected to extend its lifecycle.
The newer products, Cardioxane, Savene and Ethyol made excellent progress in the year, collectively increasing gross profits by over 30%. The expansion of the Dexrazoxane franchise saw the addition of Totect in March 2016. Totect provides an important entry into the US and is expected to start providing revenues in the second half of FY17.
The Managed Access division, representing 26% of Group gross profits, had a good year after taking account of a complex integration following the Idis acquisition. As expected, the start of a number of important new programs resulted in a stronger performance in the second half, positioning the division well going into FY17.
The Global Access division, representing 14% of Group gross profits, recorded gross profits marginally ahead of last year. This is after taking account of the planned disposal of the low margin commercial contract discussed following the acquisition of Idis. The Group’s market leading positions in the Managed Access space and the local capability and expertise provided by the Link acquisition, will enable us to capitalise on the considerable long term international opportunity in the ‘on-demand’ unlicensed medicine market.
The Clinical Trial Services division, representing 19% of Group gross profits in the year, delivered excellent growth combining strong activity within its existing customer portfolio with some important new customer wins through the year. Good levels of clinical trial activity, a widening customer base and the continued roll out of our value added services are expected to drive further strong growth in FY17.
Link Healthcare, representing 10% of Group gross profits in the year, had a solid underlying performance with the strongest growth coming from the developing Asian business. Whilst reported results for Link Healthcare have been affected this year by the depreciation of local currencies, particularly in South Africa, these effects are expected to reverse in the current financial year following the recent depreciation in sterling.
Integration of acquisitions
The integration of both the Idis business and Link Healthcare is substantially complete. Acquisition and integration costs relating to Idis and Link will be shown as non-underlying costs.
Net debt has decreased from £76.2 million as at 30 June 2015 to around £67 million as at 30 June 2016 with the cash consideration for the Link Healthcare acquisition and the product acquisitions funded from the free cash flow of the Group.
Brexit is not expected to have any adverse effects on the Group in the short term. Whilst the outcomes are not yet clear, the Group’s flexible operating model, the team’s deep understanding of multinational regulatory process and with around 85% of revenues being from International markets, it is expected that any medium to long term implications will be manageable.
Overall the Group has traded in line with the Board’s expectations and all divisions are well positioned for good growth next year.
The Group expects to publish its final results for the year ended 30 June 2016 on Wednesday 28 September 2016.
*Revenue and gross profit growth rates include Clinigen’s share of the South Africa Joint Venture and exclude the impact of the release of the fair valuation of inventory acquired with Idis and Link Healthcare. Under IFRS, the Joint Venture is excluded from revenue, gross profit and profit before tax and the Group’s share of the Joint Venture’s profit after tax is included in the Profit and Loss Account as ‘other income’. The release of the fair value element of inventories is included in the non-underlying costs of the Group.
Shaun Chilton and Martin Abell will host an analyst call at 8.30am on Wednesday, 20 July 2016. Call details available upon request from email@example.com.
An audio replay file will be made available shortly afterwards on the Group’s website: www.clinigengroup.com.
Clinigen Group plc
Peter George, Group Chief Executive Officer
Shaun Chilton, Group Deputy CEO
Martin Abell, Group Chief Financial Officer
Tel: +44 (0) 1283 495010
Numis Securities Limited
Michael Meade/Freddie Barnfield (Nominated Adviser)
James Black/Tom Ballard (Corporate Broking)
Tel: +44 (0) 20 7260 1000
Peel Hunt LLP
James Steel/Tom Burt/Jock Maxwell Macdonald
Tel: +44 (0) 20 7418 8900
Melanie Toyne-Sewell/Jayne Crook/Emma Barlow
Tel: +44 (0) 20 7457 2020
About Clinigen Group
Clinigen Group plc (AIM: CLIN) is a global pharmaceutical and services company with a unique combination of businesses focused on providing access to medicines. Its mission is to deliver the right medicine to the right patient at the right time and is focused in three areas of global medicine supply; clinical trial, unlicensed and licensed medicines.
Clinigen Clinical Trial Services is the global market leader in the management and supply of commercial medicines for clinical trials.
The Group is also the trusted global leader in ethically sourcing and supplying unlicensed medicines to hospital pharmacists and physicians for patients with a high unmet need, through three of its divisions: Idis Managed Access runs early access programs for innovative new medicines. Idis Global Access and Link Healthcare work directly with healthcare professionals to enable compliant access to unlicensed medicines on a global basis and niche essential licensed and generic medicines across Australasia, Africa and Asia (AAA region).
Clinigen Specialty Pharmaceuticals acquires global rights, revitalises and markets its own portfolio of niche hospital medicines.
New product and product extension in the period:
Totect is an emergency medicine used to reverse the toxic effects of anthracycline anti-cancer treatment. Occasionally, anthracyclines when administered, accidently leak outside of the vein into surrounding tissue causing severe damage. Totect reverses this damage, allowing patients to continue their essential anti-cancer treatment.
Foscarnet product extension provides exclusive rights to a 250ml bag form of foscarnet sodium allowing the Group to continue the revitalisation of Foscavir.
For more information, please visit www.clinigengroup.com
This announcement contains certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of Clinigen Group plc. These statements are based on current expectations and involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Any of the assumptions underlying these forward-looking statements could prove inaccurate or incorrect and therefore any results contemplated in the forward-looking statements may not actually be achieved. Recipients are cautioned not to place undue reliance on any forward-looking statements contained herein. Clinigen undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events or other circumstances.