Clinigen ends year in line with expectations

(Sharecast News) - Pharmaceutical products and services company Clinigen updated the market on its just-ended financial year on Tuesday, saying net revenue was expected to be £455m, representing an increase of 12% on both a constant currency and organic basis.
The AIM-traded firm said that, including the contribution from the UK specials and aseptics compounding business, which was divested on the last day of the period on 30 June, reported net revenue was expected to be £495m.

Adjusted EBITDA was expected to be £116m, in line with the guidance it provided in June of between £114 and £117m, representing a decline of 10% on a reported basis and 6% on a constant currency and organic basis.

Including the UK compounding business, adjusted EBITDA was expected to be £117m for the 12 months ended 30 June.

Net debt was expected to be no more than £317m, excluding IFRS 16 adjustments, representing a net debt leverage of 2.8x, which the board said was "meaningfully below" the group's temporary banking covenant of 3.5x.

Clinigen said it expected to achieve double-digit EBITDA growth in the new 2022 financial year, and remained focused on debt paydown.

On the operational front, Clinigen reorganised itself into two divisions during the year, with the divestment of the UK compounding business simplifying its operational structure and aligning its platform to the end-market customer.

After those changes were made, a further review of the cost base had begun, in a bid to target new cost-saving initiatives.

Strong new business activity was reported in its services division, with $100m of business won in clinical services and net 30 managed access programmes added.

The services business margin weakened in the period due to a higher proportion of sourcing wins, and delays to key contracts in clinical, that had since started.

In products, demand for Proleukin and on-demand products remained weak due to the continued impact of Covid-19 on hospital-based treatments, while the developed portfolio of products performed "strongly", and the Erwinase global roll-out progressed ahead of plan.

"Like many other companies operating in the clinical trial and hospital-based products area, Clinigen this year has seen an impact on demand from Covid-19," said chief executive officer Shaun Chilton.

"Nevertheless, we anticipate a return to double-digit growth in the next financial year driven by the strength of our underlying business and activity levels across the group.

"We are seeing significant activity in services, with strong business wins across the division in both Covid-19 and non-Covid-19 related areas that will fuel growth over the coming year."

In products, Chilton said the roll-out of Erwinase was ahead of expectations, adding that the company had continued to add to its partnered portfolio to support future growth.

"More broadly, Clinigen's strong platform across the product life cycle and synergies across the business give us confidence in our ability to deliver value for patients, customers and investors in the coming year and beyond."

Clinigen said it would publish its final results for the year ended 30 June on 16 September.

At 0909 BST, shares in Clinigen Group were up 0.16% at 626p.