Join our community of smart investors

Sales surge at Skyepharma

Sales have surged at Skyepharma following several new product launches and supply issues at a competitor
August 26, 2015

Buoyant sales of inhaler product Flutiform accounted for the significant upswing in first-half revenues at Skyepharma (SKP). In-market sales of the product - a measure based on sales to pharmacies - leapt 129 per cent in euro terms year on year, which in turn helped underlying revenues (excluding milestone payments) jump 51 per cent to £40.7m. A reported drop in operating profits to £12.5m (from £13.2m in 2014) reflects the absence of certain milestone payments received last year. Excluding these one-off cash windfalls, operating profits more than doubled to £12.4m.

IC TIP: Hold at 282p

Skyepharma also earns royalties on products sold by third parties. Sales of local analgesic drug Exparel by US group Pacira rose 42 per cent, while sales of several next-generation respiratory drugs at GlaxoSmithKline (GSK) collectively grew to £123m, compared with £19m this time last year. Royalties from Solaraze - a gel used to treat dry skin patches - were also significantly ahead of expectations due to temporary manufacturing issues at a competitor.

Chief executive Peter Grant said Skyepharma had benefited from the timing of several product launches last December, but expects sales momentum to continue into the second half.

Analysts at N+1 Singer have upgraded their current-year forecasts in light of the sales surge. The brokerage now expects pre-tax profits of £16.1m (previously £15.8m), giving EPS of 12.1p, compared with £16.7m and 18.5p in 2014.

SKYEPHARMA (SKP)
ORD PRICE:282pMARKET VALUE:£296m
TOUCH:278-282p12-MONTH HIGH:378pLOW: 246p
DIVIDEND YIELD:NILPE RATIO:12
NET ASSET VALUE:35pNET CASH:£21m

Half-year to 30 JuneTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201434.4-18.1-27.0nil
201540.810.58.7nil
% change+19+158+132-

Ex-div: na

Payment: na