Pharma Capital

Clinigen looks for bolt-ons as trading continues strong

Gross profits at Link rose by 35%, with South Africa especially strong, while Clinigen’s speciality pharma division got a boost from anti-viral drug Foscavir
picture of drugs
Clinical trials division is doing well for Clinigen

An ‘outstanding’ performance from recent acquisition Link Healthcare helped Clinigen PLC (LON:CLIN) lift underlying profits by a third and the dividend by 23%.

The speciality pharma and drug distributor had already flagged the numbers in a pre-trading update and confirmed underlying profits [adjusted EBITDA] rose 34% to £30mln in the half year to December.

Gross profits at Link rose by 35%, with South Africa especially strong, while Clinigen’s speciality pharma division got a boost from anti-viral drug Foscavir due to the phasing of shipments and favourable currencies.

Revenues were £131mln (£156mln) reflecting a shift to free products in the managed access division, the ending of one distribution contract worth £4.5mln and a move into higher margin clinical trial work.

Trading in the second half of the year has started positively and the group is trading in line with the board's expectations, Clinigen said,

Shaun Chilton, group chief executive, added: "We have delivered another strong half of progress, achieving more than 30% growth across all our key financial measures.

"Our focus now is to capitalise on our international market leading positions and the geographical footprint we have built. We will also look for selective bolt-on acquisitions to enhance our product portfolio, geographical footprint and / or service capabilities."

Statutory interim profits were £4.2mln, up from £2.2mln.

Brokers said adjusting for all of the adjustments, underlying organic growth was in double digits.

N+1 said Clinical Trial Services was the standout performer, with Managed Access and Spec Pharma also contributing strongly.

The slight disappointment was around the Article 31 restrictions of Cardioxane, where timing looks to have slipped, though N+1 said this was always a hope-for outcome.

Its target price is 895p compared to a market price today of 811p. 

 

-updates for broker comment, share price --

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