Vernalis (VER) chief executive Ian Garland wants to remind investors that "not all biotech companies are the same". The Aim-listed drug developer expects approval of slow-release cold and cough product Tuzistra from the US Food and Drug Administration (FDA) next April, at which point, Mr Garland says, the company will join the ranks of US-based 'speciality pharma' businesses that both develop and market drugs.
In the meantime, Mr Garland admits the figures "will be lumpy". A strong first half last year and unfavourable foreign exchange movements pushed pre-tax profits into the red at the interim stage. Fluctuating royalty income from migraine treatment Frovatriptan and fewer payments from research partners account for the dip in revenue.
But the shape of the business will change if – and that's a big if – Tuzistra is approved on time. Mr Garland says he sees "no reason for a delay", and has set up US headquarters outside of Philadelphia in preparation for a product launch next summer. Third-party logistics and sales providers are already in place, so that Tuzistra could enter the market ahead of the prime cold and cough season in the US. Vernalis values its target market at roughly $2bn (£1.18bn) annually.
Broker Canaccord Genuity expects full-year losses of £13.7m, compared with losses of £6.9m in 2013.
VERNALIS (VER) | ||||
|---|---|---|---|---|
| ORD PRICE: | 32p | MARKET VALUE: | £142m | |
| TOUCH: | 31-33p | 12-MONTH HIGH: | 38p | LOW: 22p |
| DIVIDEND YIELD: | na | PE RATIO: | na | |
| NET ASSET VALUE: | 18p | NET CASH: | £25m | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 7.56 | 2.57 | 0.9 | 0 |
| 2014 | 6.17 | -5.53 | -1.0 | 0 |
| % change | -18 | - | - | - |
Ex-div:na Payment:na | ||||
