Clinigen's progress comes at a price

Cash profits were up 10 per cent once the twin effects of currency movements and M&A are discounted, though recent acquisitions pushed up the pharma group’s net finance costs by 50 per cent to £6.0m and the level of intangible assets by £100m over the 2018 half-year measure.

Shareholders will be encouraged by strengthening sales at both Clinigen's clinical services and unlicensed medicines divisions. A significant supply agreement was also signed with Iovance Biotherapeutics for Proleukin, a biologic for use in metastatic renal cell carcinoma, the global rights to which were acquired in 2018 and 2019.

The positive impact of acquisitions was apparent in the commercial medicines business, which comprises 52 per cent of gross profits and where higher-margin acquired assets helped to boost the gross margin by 3.2 percentage points to 74.5 per cent.

But enhanced performance has come at a cost. The purchase and supply of Proleukin in the US bumped-up working capital commitments, while net debt (ex-lease liabilities) increased by £113m since the 2018 half-year to £322m, representing pro-forma leverage of 2.4 times. The multiple is outside the target leverage range of 1-2 times, which management hopes to attain by FY2021.

Consensus forecasts point to EPS of 44.8p for the full year to June 2020, rising to 53.2p in FY2021.