5 Aug 2015 07:00
Sinclair IS Pharma plc
Trading Update
London, 5 August 2015 Sinclair IS Pharma plc (SPH.L), ("Sinclair" or the "Group") the international specialty pharma company, announces a trading update for the financial year ended 30 June 2015.
The Group has had a strong second half to the year, from both a financial and operating perspective. Trading has followed the historic seasonality in Sinclair's sales, with peak sales in late spring. This has been partially offset by the continued weakness in the Euro. Revenues for the full year were £75.9 million, compared to £63.6 million last year representing reported growth of 19% and 24% on a constant currency basis (revenue at constant currency £79.0 million). Like for like1 growth for the year was 8% compared with 4% for FY14 demonstrating the impact of the faster growth aesthetics portfolio.
Revenue in the aesthetic portfolio grew strongly reaching £35.8 million for the year (47% of total revenues) representing 67% reported growth over the £21.4 million achieved last year and 19% LFL growth.
Despite a delay to Russian approval and FX headwind, Silhouette revenues beat budget in reaching £8.7 million for the year (120% LFL) as a result of a strong performance in Europe and in Brazil. Most significantly Silhouette Instalift received FDA approval in April 2015 and the company is now building its US affiliate ahead of a full launch now scheduled for early 2016. Independent market research suggests Silhouette Instalift has substantial sales potential in the US (with estimated peak sales in excess of US$200 million) and will be a significant driver of Group earnings over the next few years. Silhouette Soft was also approved in South Korea in March and in Russia in June 2015. In July 2015 an extended indication to include neck and eye brow lifting was approved for Europe, increasing the area of approved use for Silhouette. Propelled by these positive developments, the Board remains enthusiastic with Silhouette's growth prospects and market potential.
Perfectha delivered revenues of £8.2 million for the year (13% LFL) growth, with 22% growth in H2 compared to the first six months. Product growth was particularly strong in Europe and Intercontinental but offset by a decline in South Korea in a tough market environment. The FY16 growth rate is expected to be similar to FY15 as South Korea recovers and Perfectha Lido is launched in Europe in H2 FY16. Perfectha G (sexual function) remains on track for a launch in 2017.
Ellansé also recorded a stronger second half reaching sales of £4.5 million for the year (1% LFL) but 50% growth in H2 over H1. Post-acquisition de-stocking in South Korea negatively impacted sales particularly during H1, which combined with a weak Russian market environment resulted in Ellansé performance below Board expectations for the year. Nonetheless, consistent robust growth in physician user base in Europe (298% LFL), a strong recent launch in Taiwan and normalisation of South Korean inventory levels point to a good outlook for Ellansé.
As expected, Country Operations performed well in H2 and for the full year reaching revenues of £39.4 million (FY14: £37.9 million) which represents 16% on a like for like basis. Aesthetics now represent 40% of country operations sales, up from 29% in FY14. Silhouette contributed £3.8 million of Country Operation sales in the year as the Group repatriated direct rights in UK, France, Germany and Spain. Ellansé also performed strongly in H2 as the number of training sessions and regular users of the product increased with sales of £1.0 million in H2, up from £0.5 million in H1. Training physicians is the key driver for the success of Silhouette and Ellansé. The Company only sells to trained physicians and has continued to expand its programmes to meet heavy demand for training for these novel brands.
International Operations revenues increased to £33.2 million (FY14: £25.6 million); significant demand for Silhouette (115% LFL) was offset by a decline in Ellanse (-27% LFL) due to the de-stocking in Korea and the de-stocking by Menarini affecting sales of Atopiclair and Papulex. Aesthetics now represent 60% of International Operations sales, increased from 40% in FY14.
In June 2015, the Group entered into a worldwide and royalty free agreement for its proprietary Delmopinol technology for the treatment of halitosis in dogs with Merial, a Sanofi company, in return for an undisclosed upfront consideration and a sales related milestone payment.
FY15 EBITDA is expected to be in line with the Board's expectations.
Sinclair ended the year with cash of £12.7 million and net debt of £42.2 million.
Following the announcement of the strategic review and commencement of an offer period on 25 November 2014, the Company is engaged in advanced discussions with various parties. The Board continues to evaluate the best route to realise shareholder value and is actively considering either disposing of part of the business and reinvesting the proceeds or selling the whole company. The Board continues to believe that Sinclair has a secure future as an independent business (especially in light of the positive developments during FY15 and exciting future outlook, as described above) and will act to either support the Company's significant growth potential or execute a transaction that recognises that potential.
Chris Spooner, CEO commented "The key FY15 objectives - to launch Silhouette, Perfectha and Ellansé, and to obtain FDA approval for Silhouette Instalift were met in parallel with the strategic review. Although H1 disappointed due mainly to minor delays in launching the new products, any teething problems were largely resolved by mid-year allowing a strong recovery in H2. While the weak Euro was broadly matched by the Merial income, both the acceleration of growth rate and margin improvement (through both an increasing share of aesthetics products and manufacturing efficiencies for selected products) towards year end is highly encouraging. The Company expects the strong sales growth and earnings leverage rates to continue, and a strong growth opportunity from the launch of Silhouette Instalift."
1 Like for like ('LFL') revenues exclude product disposals, one-off Merial licence fee income and currency fluctuations
Ends
For further information please contact:
Sinclair IS Pharma plc Tel: +44 (0) 20 7467 6920
Chris Spooner
Alan Olby
Peel Hunt LLP Tel: +44 (0) 20 7418 8900
James Steel
Clare Terlouw
Notes to Editors:
About Sinclair IS Pharma plc - www.sinclairispharma.com
Sinclair IS Pharma is an international specialty pharmaceutical company centred on Dermatology, in particular Aesthetics, Wound care, and Skin care. The group has an established sales and marketing presence in the leading EU markets' and a rapidly growing International division concentrated on the Emerging Markets through long term multi-product, multi-country, sales, marketing and distribution deals with key strategic partners.
"Safe Harbor" Statement under the US Private Securities Litigation Reform Act of 1995: Some or all of the statements in this document that relate to future plans, expectations, events, performances and the like are forward‐looking statements, as defined in the US Private Securities Litigation Reform Act of 1995. Actual results of events could differ materially from those described in the forward‐looking statements due to a variety of factors.