Sinclair Pharma PLC (LON:SPH) surged higher in afternoon trading on Thursday after revealing it has received a bid approach from a Chinese company, extending earlier gains made after an upbeat trading statement. Around 2pm, the AIM-listed firm's stock was up nearly 35% at 24.7p.
In a brief statement, Sinclair confirmed that it has received an approach from China Grand Enterprises, Inc. and its affiliate company Huadong Medicine Co., Ltd which may or may not result in an offer for the group.
It added: "Discussions remain at a very early stage. Accordingly, there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made. A further announcement will be made in due course."
Earlier, Sinclair shares got a boost after the aesthetic dermatology products maker said its half-year sales figures had beaten its expectations.
The firm said revenue from its core ex-US business rose by 18% in the first half of the year to £20.5mln (H1 17: £17.6mln), comfortably above the mid-teens growth it had previously guided for.
Sculptra the main driver
Much of that was down to a strong performance from its injectable collagen stimulator Sculptra, sales of which grew more than 50% in the opening six months of 2018 to £3.1mln (H1 17: £2.0mln).
Sculptra’s margins aren’t as high as some of Sinclair’s products, but there was no knock-on effect on profitability as management reaffirmed top and bottom line full-year guidance remains.
The company’s other products, including its top-selling Silhouette Soft skin tightening treatment, all registered a rise in sales as well.
In the US, where Sinclair recently took direct control of its sales operation, the company reported revenue of £0.8mln – better than it had expected. It reiterated its expectation of generating £3.0mln in US sales this year.
Overall, group revenues climbed 6% to £21.3mln (H1 2017: £20.1mln).
‘Optimistic’ for rest of year
Sinclair said group revenues would be weighted towards the second half once again, which analysts believe implies an acceleration in sales growth from 6% in the first half to low double-digits in the second half.
“Our first half performance clearly shows that the year is progressing well,” said chief executive Chris Spooner.
“Momentum in our ex-US business remains strong with 18% constant currency growth leaving Sinclair well placed to deliver at least mid-teens growth at constant currency for 2018, being the guidance we provided at the time of our full-year results.
He added: “In the US, I am pleased with the early progress of our new sales team and am optimistic that they will deliver excellent results. We remain very optimistic that we will see strong and broad-based growth over the second half of 2018.”
-- Adds bid approach news; updates share price --