It’s tough to sell medicines which treat allergic reactions in a year when the pollen count is abnormally low, which is why Allergy Therapeutics (AGY) only managed a 1.3 per cent increase in constant currency revenues in the first six months of its 2018 financial year. Still, the group fared better than many of its competitors which have struggled with the new regulation surrounding allergy products in Europe. This helped the group increase its market share to 14 per cent via its core German subsidiary.
But Allergy’s commercial exploits in Europe pale in comparison with its pipeline, which could be a major catalyst for the share price in the second half of FY2018. Within the next few months, the group is due to report results from two crucial clinical studies: a European final phase birch allergy trial and a phase two dosing assessment for a novel grass allergy product. Both of these medicines have the potential to become the world’s first aluminium-free, injectable, long-term allergy remedy and thus have huge commercial potential.
But late-stage drug trials don’t come cheap, which is why the full year R&D spend is expected to rocket to £18.3m over the entire financial year, up from £5.9m in the first half, and £13.8m in 2017. Broker finnCap therefore expects adjusted pre-tax losses to widen to £8.4m in 2018, giving an adjusted loss per share of 1.5p (2017: -£1.3m and -0.3p).
ALLERGY THERAPEUTICS (AGY) | ||||
ORD PRICE: | 26p | MARKET VALUE: | £ 154m | |
TOUCH: | 25-27p | 12-MONTH HIGH / LOW: | 40p | 23p |
DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
NET ASSET VALUE: | 6p* | NET CASH: | £25.8m |
Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2016 | 40.4 | 7.2 | 1.16 | nil |
2017 | 42.2 | 6.4 | 1.01 | nil |
% change | +4 | -11 | -13 | - |
Ex-div: | na | |||
Payment: | na | |||
*Includes intangible assets of £5.1m, or 0.9p a share |