Outlook focused on PeproStat data soon
Ergomed offers clinical trial and pharmacovigilance services to pharmaceutical companies, while also co-developing a product portfolio of therapies.Performance in H1 was in line with expectations as total revenues were up a healthy 31% to £22.9m. While net revenues (excluding reimbursed costs) were up 53% to £19.5m,; good performance was seen across the group. As expected following a £1m increase in R&D spend this year on Haemostatix, EBITDA remained broadly flat year-on-year. Most importantly, the forward order book for the Services businesses remains attractive, standing at £70m at the end of July, up c. £10m year-on-year.
The new CEO, Dr. Dan Weng, is expected to continue to drive the business. At the same time, the company retains its visionary and hugely experienced founder, Dr. Miroslav Reljanovic as Executive Vice Chairman. He will be responsible for providing strategic support. This is an exciting combination of talent.
Ergomed’s proprietary compound, PeproStat for the treatment of surgical bleeding, completed the recruitment of its 169 patient Phase IIb trial in July, six months ahead of schedule. This means that the data readout is now expected around the end of October 2017, substantially earlier than expected.
The expected news flow for the rest of 2017 is focused on the outcome of the PeproStat Haemostatix trial, possible acquisitions to boost the profitability of the Clinical Research Services businesses and additional contract wins.
The bottom of the range of our unchanged 232p - 397p valuation per share is based on the more conservative “Services-only†sales forecast, discounting completely the potential upside from the attractive Products and Co-Development projects. The top of the range adds in these Product and Co-development projects.
Ergomed is engaged in the provision of specialized services to the pharmaceutical industry and the development of new drugs. Co. focuses on oncology, neurology and immunology and the development of orphan drugs. Co. is building a portfolio of co-development partnerships with pharmaceutical and biotech companies. Co. has two business segments: clinical research services, which provides clinical development services to clients ranging from pharmaceutical companies to small and mid-sized drug development companies; and drug safety and medical information services, which includes Co.'s subsidiary, PrimeVigilance Limited, a pharmacovigilance and medical information services company.
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