(Alliance News) - Clinigen Group PLC shares were slumping on Wednesday after the company said the pandemic has continued to hurt its earnings.
Shares in the Staffordshire-based pharmaceuticals and services provider were down 22% in London on Wednesday morning at 651.24 pence each.
"The negative impact of Covid-19 is primarily due to the global reduction in hospital-based oncology treatments and delays to clinical trials. In particular, demand for Proleukin within its current approved indications was significantly weaker than expected in recent months," Clinigen explained.
Net revenue is expected to be in line with prior guidance and consensus expectations. At the end of February, in its interim results, Clinigen had said it expects organic net revenue growth for the year to June 30 to be in the upper half of the 5% to 10% range.
In financial 2020, Clinigen recorded revenue of GBP504.3 million.
For financial 2021, adjusted earnings before interest, tax, depreciation and amortization is guided between GBP114 million and GBP117 million - due to the lower proportion of revenues from the Products division. Adjusted Ebitda in financial 2020 was GBP100.8 million.
"The group believes it is prudent to expect this reduced level of demand for Proleukin to remain until revitalisation efforts into new indications alongside novel cell therapies are successful and normal Hospital and Cancer Centre Services have resumed," Clinigen added.
It continued: "Cash conversion has been in-line with adjusted expectations, with net debt expected to be below GBP330 million with the group having ample liquidity and leverage meaningfully below the group's temporary banking covenant of 3.5x."
Looking ahead, Clinigen said its Service unit is gaining share in its end-market, with faster-than-expected progress on the launch of Erwinase. It also it is confident that Proleukin demand will return and exceed pre-Covid levels in the future.
Due to these "positive dynamics" and its "good" underlying strength, Clinigen expects to achieve double-digit Ebitda growth in financial 2020, but will remain focused on its debt paydown.
Chief Executive Shaun Chilton said: "Covid-19 has continued to have a significant impact on our business as it has for many other companies operating in the clinical trial and hospital based products area.
"Due to the strength of our underlying business, the simplification of our operating model and continued high-level of business wins in Services, we are optimistic about the future and anticipate a return to double digit growth in the next financial year."
By Paul McGowan; paulmcgowan@alliancenews.com
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