Circassia’s (CIR) chief executive, Steve Harris, is rightly proud of his business's transition. Instead of “packing up and going home” after the failure of its allergy trial in 2016, the group has become a respiratory pharma specialist with a strong commercial presence in the US and plans to expand into China.
That doesn’t mean the last few years haven’t been tough for shareholders and these half-year results reveal continued disturbances as the dust settles. AstraZeneca’s (AZN) decision to up its stake to 19.9 per cent (thus reducing Circassia’s cash contribution to the partnership) has lowered the free float below the London Stock Exchange’s threshold, meaning Circassia is having to move to Aim.
But the rewards from the new strategy are beginning to emerge. Adjusted losses from continuing operations fell more than 50 per cent to £13.4m in the first half, due to a sharp drop in research and development expenditure. Management has halted investment in the new drugs pipeline in favour of Duaklir and Tudorza – the two medicines from the Astra partnership, both of which will receive US regulatory updates in March 2019. Sales from Tudorza rose 4 per cent compared with the second half of 2017 thanks to improved marketing efforts, while Duaklir has the potential to generate peak sales of $180m, according to analysts.
| CIRCASSSIA (CIR) | ||||
| ORD PRICE: | 75p | MARKET VALUE: | £268m | |
| TOUCH: | 75-77p | 12-MONTH HIGH: | 114p | LOW: 70p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 55p* | NET CASH: | £50.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 18.3 | -34.1 | -10.0 | nil |
| 2018 | 28.4 | -23.9 | -7.0 | nil |
| % change | +55 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £204m, or 57p a share | ||||
