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Strong profit growth with underlying EBITDA up at least 20%; integration of Idis well underway

04:57 EDT 22 Jul 2015 | Instinctif Partners

Clinigen Group plc (‘Clinigen’ or the ‘Group’, AIM: CLIN), the global pharmaceutical and services company, today provides a trading update for the year ended 30 June 2015.

Highlights

  • Revenues increased in excess of 45% to not less than £183.6m (2014: £126.6m).
  • Gross profit increased in excess of 30%, mainly driven by greater than 25% growth in Specialty Pharmaceuticals (SP) gross profits and the acquisition of Idis.
  • Underlying EBITDA up at least 20% to not less than £32.2m (2014: £26.8m).
  • Notable year for acquisitions:

  - August 2014, SP strengthened the oncology support portfolio with the acquisition of Ethyol® (amifostine) from AstraZeneca.
  - April 2015, acquired Idis for £225m, establishing the enlarged Group as the market leader in the ethical supply of unlicensed medicines.
  - Both acquisitions are performing strongly in line with expectations.

  • Strong cash generation and, as at 30 June 2015, closing net debt was £78.0m (2014: net cash £5.3m).

Group performance

Clinigen continues with its strategy of organic growth supplemented with acquisitions.

The acquisition of Idis, with its established Global Access (GA) and Managed Access (MA) businesses, has positioned the Group as market leader in the ethical supply of unlicensed medicines. These businesses are being integrated into the Group and the operational and financial benefits are already clearly apparent.

The Group’s Clinical Trial Services (CTS) and SP businesses delivered organic revenue growth in excess of 30% and 25% respectively.
All divisions have shown revenue and gross profit growth in H2 compared to H1, with Group full year gross profit increasing by in excess of 30%.

Group underlying EBITDA growth was more than 20% to not less than £32.2m, of which half the growth was due to acquisitions and the other half was organic.

Peter George, Chief Executive Officer, Clinigen said,

“This has been another tremendous year for Clinigen. Organic growth has been significant and the £225m acquisition of Idis has propelled us into market leader position in the fast growing ethical supply of unlicensed medicines and strengthened our CTS business.

“Ethyol has strengthened the SP portfolio and we are seeing further product acquisition and complementary opportunities which supports our strategy to focus on niche, hospital-only, specialty drugs.

“The enlarged Group of four operating businesses is integrating well and the Idis businesses are already contributing to the overall strong trading performance. Strategically, the focus for the current financial year is to strengthen our global footprint.”

Acquisition of Idis

The acquisition of Idis on 24 April 2015 was financed by a vendor placing raising gross proceeds of £135.0m and £105.8m drawn down under new debt facilities.

Clinigen now operates as four synergistic businesses across the full spectrum of supply for unlicensed and licensed medicines – from early stage products still in clinical trials to approved products that may not be accessible due to lack of regional licenses or market withdrawal.
Acquisition and integration costs relating to Idis will be shown as non-underlying costs. Taking these costs into account, the reported profit before tax and earnings per share is expected to be lower than the prior year.

Operational businesses

  • Clinical Trial Services (Clinigen’s Clinical Trials Supply and Idis’ Clinical Trial Procurement businesses)

CTS is performing well against the parameters by which it is measured. There has been significant growth in sales for FY15 compared with the prior year, with revenue growth in excess of 30% driven by the US.

The business has also seen in excess of 10% growth in the number of medicines delivered and the number of customers has increased from 73 to 85. The number of customers with sales greater than £5.0m has risen from five to seven. Overall, absolute gross profit has grown in excess of 5%.

  • Managed Access (Clinigen’s Global Access Programs and Idis’ Managed Access Programs)

This business has grown significantly over the year. The key measure that reflects this growth is the number of drug units delivered. Combining Clinigen and Idis for a full year, MA has seen an increase of deliveries to 418,000 units delivered through 62,000 shipments; this is up from 263,000 units across 40,000 shipments in the previous year on a comparable basis.

Clinigen is now the global market leader of the exclusive managed access market which is valued at c.$500m-$600m.

  • Global Access (Idis’ General Access)

The business has shown solid growth in gross profits, with margins in excess of 20%.

The ethical unlicensed medicine market is estimated at $8-$10 billion. The Idis GA business provides a stable footing for Clinigen to secure a large proportion of this ethical market. Clinigen plans to build on the Idis brand and relationships beyond the UK into Europe. Over time the Group will move into the global space through strategic acquisition.

Clinigen also intends to develop the Idis e-commerce system - an online platform that is essential to the GA business and will be instrumental in driving global reach.

  • Specialty Pharmaceuticals (Clinigen’s SP)

SP remains the largest contributor to the Group’s gross profits accounting for in excess of 50%, and showed gross profit growth of over 25% in the year.

All five products in the portfolio contributed to revenue and gross profit growth, notably Ethyol, where its revitalisation is on track. The SP team also continues to pursue overturning Article 31 with respect to the dexrazoxane portfolio and progress so far is positive.

Overall, Clinigen continues to deliver on its objective of building its SP portfolio and is on track to have 10 products over the next three to four years.

Management Team

In light of the Idis acquisition, Clinigen has taken the opportunity to review and restructure its management team to ensure effective management across the enlarged business. Consequently, Shaun Chilton has been promoted from COO to Deputy CEO of the Group. As previously announced, Martin Abell will join at the beginning of August 2015 as a director, and CFO elect during a period of handover from Robin Sibson.

Additionally the Group now has significant leadership experience in all four divisions. The managing directors of each business are as follows: Simon Estcourt (MA), Mark Corbett (GA), Steve Glass (CTS) and David Moran (SP).

The information contained in this statement has not been audited and may be subject to further review.  The Group expects to publish its final results for the year to 30 June 2015 on Tuesday 22 September 2015.

About Clinigen Group

Clinigen Group is a global pharmaceutical and services company with a unique business model dedicated to delivering the right drug to the right patient at the right time. The Group consists of four synergistic businesses that provide medicines to patients with unmet medical need; through Clinigen CTS we manage the supply of commercial medicines for clinical trials, through Idis Managed Access we run early access programs for our own and other companies’ portfolios, our Idis Global Access team works directly with healthcare providers to enable ethical compliant access to unlicensed medicines, and through Clinigen SP,  we market our own portfolio of niche commercial products.
We are global leaders in ethically sourcing and supplying unlicensed medicines to hospital pharmacists and physicians for patients with a high unmet need.

For more information, please visit www.clinigengroup.com.

Forward-looking statement

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 (“Clinigen”). 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.

For more information please contact: Clinigen Group plc Peter George, Group Chief Executive Officer Shaun Chilton, Group Deputy CEO Robin Sibson, Group Chief Financial Officer Numis Securities Limited Michael Meade/Freddie Barnfield (Nominated Adviser) James Black/Tom Ballard (Corporate Broking) Peel Hunt LLP James Steel/Jock Maxwell Macdonald Instinctif Partners Melanie Toyne-Sewell/Jayne Crook/Emma Barlow Tel: +44 (0) 1283 495010 Tel: +44 (0) 20 7260 1000 Tel: +44 (0) 20 7418 8900 Tel: +44 (0) 20 7457 2020 Email: clinigen@instinctif.com NEXT ARTICLE

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