Sinclair Delivers Strong Growth
Godalming, 26 September 2006: Sinclair Pharma plc ("Sinclair"), the international specialty pharmaceutical company, today announces its preliminary results for the year ended 30 June 2006.
Financial Highlights * Turnover up 67% to £11.6m (2005: £7.0m) * Organic product sales growth of 58% to £5.7m (excl license fees and milestones) * Operating loss of £3.0m (2005: £2.0m restated under IFRS) * Loss per share 4.5p (2005 3.7p restated under IFRS) * Cash of £5.0m at 30 June 2006 (2005 £4.9m) * Vendor Placing of £35 million in March 2006 to acquire Groupe CS Dermatologie (CSD) * £7.4m (£7.1m net of expenses) raised via institutional placing in November 2005
Operating Highlights * Growth of own sales and marketing operations: acquisition of CSD expanding commercial presence in France, Spain, Portugal * Integration of Sinclair Srl (previously Euroderm) in Italy completed * Sinclair's own sales and marketing companies launched four products/line extensions in Italy and France * Growth of global network of marketing partners: 22 new marketing agreements, involving 10 products and 35 countries, including Johnson & Johnson's OraPharma for prescription Decapinol® rinse in the US. * Product launches: 23 product launches by marketing partners, involving 14 countries and 8 products. * Continued regulatory progress: one US and four EU product approvals, addition of 'treatment of dental plaque' to Decapinol® label * Positive clinical trial results for Atopiclair(TM) and Sebclair(TM) * Pipeline advancement with acquisition of new product, under development for onychomycosis, 14 products in late stage development
Commenting on the results, Steve Harris, Chairman, said: "This has been a successful year for Sinclair, with revenues increasing by 67%. Sales have grown through our own expanding sales and marketing network including the CSD acquisition, and we have also seen strong growth in revenues from existing and new members of our global marketing partner network. Among our new marketing partners we welcome Johnson & Johnson's OraPharma Inc., US partner for our flagship brand Decapinol®. Priorities for now include harnessing our new commercial setup to maximise revenues and achieve profitability, delivering best value for our shareholders." -ends-
for further information please contact: Sinclair Pharma plc Dr Michael Flynn, CEO Tel: +44 (0) 1483 410 600 Jerry Randall ACA CFO Zoe McDougall, Corporate Communications Tel: +44 (0) 7973 792 520 John Barrington-Carver, Corporate Tel: +44 (0) 7831 655 Communications 630
Financial Dynamics Ben Atwell Tel +44 (0) 207 831 3113 John Gilbert
A meeting and conference call for analysts will be held today at 8.15am UK time at the offices of Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2. Please call Mo Noonan on 020 7269 7116 for further details.
CHAIRMAN'S STATEMENT A year in which the Sinclair Group's structure was transformed, giving a platform for further revenue growth and profitability I am pleased to report that the momentum in the business, described at the interims, continued throughout the second half of the current financial year and is reflected in a 67% increase in revenues from last year. Sinclair has achieved excellent progress in its goal of becoming a profitable integrated international specialty pharmaceutical company with a broad portfolio of on-market products. Notably, in June we reached a significant US licensing agreement with Johnson & Johnson's OraPharma Inc., for prescription sales of our anti-gingivitis and dental plaque product, Decapinol® rinse.
Revenues were up 67% to £11.6m, and within this number Sinclair's product revenues increased organically by 58% to (£5.7m excluding license fees and milestone payments). In March this year, the Group acquired the private French company Groupe CS Dermatologie ("CSD") which contributed approximately £2.7m in revenues after the acquisition completed on 30 March 2006. Our previous year's Italian acquisition, Sinclair Srl (previously Euroderm), contributed a full year's revenue of £2.7m compared with five months' contribution of £1.1m last year.
As well as making important financial contributions, these acquisitions are key to building the sales & marketing structure of the Group. Sinclair now has its own sales and marketing operations in the EU territories of France, Spain, Italy and Portugal. We are now looking to build sales and marketing in the UK and Germany to complete our direct commercial presence in the remaining key EU markets. This structure will enable us to benefit from cross-selling opportunities within our expanded product portfolio, as new products were acquired with these companies. We also expect to see increased margins on product sales, and believe that with a complete European presence, our attractiveness as a commercial partner will increase.
CHIEF EXECUTIVE'S REVIEW Overview Our priority is to establish a sustainably profitable international specialty pharmaceutical company with sales and marketing coverage in the major European markets. During the last year we made strong progress in this strategic objective by adding a commercial presence in France, Spain and Portugal through the acquisition of Groupe CS Dermatologie ("CSD") whilst integrating our sales and marketing operation in Italy. At the same time we delivered a 58% increase in sales of our product portfolio through our marketing partners. We continued to develop our global sales through 22 new deals with marketing partners covering 35 countries. There were 23 new launches of Sinclair products through our partners, new product registrations in the EU and the US and the late stage pipeline was advanced.
A year of successful product commercialisation We are now able to commercialise dermatology products directly in France, Spain, Italy and Portugal and intend to expand into the UK and Germany. To maximise sales for our products, we need to access, ourselves and through partners, all the relevant target audiences, whether they are specialist doctors, GPs, dental professionals or even consumers. At this time all our oral health products, and dermatology products in non-core countries, are commercialised through our marketing partner network. For long term growth, we are focusing on plans to ensure that we have the capacity to target a broader range of specialty audiences so that we may commercialise a broader range of specialty products beyond dermatology, through our own sales and marketing operation.
Commercialisation through our marketing partner network This year we recorded a 58% growth in product sales through our marketing partners. This was largely driven by our flagship brands AtopiclairTM , Decapinol® and AloclairTM. We have demonstrated our capability to achieve rapid regulatory approval for our products in development, and therefore bring products to market in a relatively short time. During the year, our business development team has completed 22 new marketing agreements, involving 10 products and 35 countries.
Commercialisation through our own sales and marketing operations The acquisition of CSD this year has given us an established specialist dermatology sales force in France, Spain and Portugal and has supplemented our product range with more than 12 on-market dermatology products. We will also exploit the cross-selling potential afforded by this important acquisition and aim to build on the synergies of complementary technologies. Our sales and marketing operation in Italy is now fully integrated as Sinclair Srl (previously Euroderm).
Developing our future product portfolio The Group's strategy is to acquire products and technologies that are through the high-risk development stage and then apply its own regulatory and development expertise to secure the completion of their development. This year we acquired a novel product for onychomychosis (fungal nail infection), and we continue to develop new products with intellectual property protection to add to our strong pipeline. To maximise the market potential of each brand, the Group develops line extensions as appropriate and the year has been marked by three line extension approvals: Atopiclair(TM) fluid (EU, US), Decapinol® toothpaste (EU), Decapinol® gel (EU). Our near term in-house pipeline includes 14 products including line extensions and we hope to file for the approval of nine of these this financial year.
Other significant progress this year include positive clinical trial results for Atopiclair(TM) and Sebclair(TM), and winning a prestigious Frost & Sullivan award for Decapinol® Rinse.
With the seeds for growth already planted, I am confident that the Sinclair Group has the team and business platform to drive Sinclair to profitability.
Acquisition of Groupe CS Dermatologie The profitable, privately owned French company Groupe CS Dermatologie ("CSD") was acquired in March 2006. This represents a transforming acquisition for Sinclair, with direct sales and marketing operations in France, Spain and Portugal and a product range that includes prescription, OTC and dermo-cosmetic products in the therapeutic areas of fungal infections, acne, eczema, nappy rash, skin bacterial infections, superficial burns and warts, and beauty treatments such as anti-ageing creams and skin lotions including a range for black and brown skins.
The acquisition not only gives Sinclair an infrastructure in France, Spain and Portugal but it also gives Sinclair access to higher revenues and gross margins associated with selling products directly.
The strong revenue base of CSD provides critical mass for Sinclair's current commercial activities. The pre-acquisition management remains in place and is committed to the business moving forward, and integration of CSD within the Group is progressing well. I am confident that the anticipated benefits of the acquisition will be rapidly achieved.
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