Sinclair Pharma Regulatory News (SPH)

Trading Update for the 6 months to 30 June 2017

16% growth in revenues to £20 million

FDA approves Silhouette label change accelerating growth potential

 On track for another year of strong growth

London, 11 July 2017 Sinclair Pharma plc (AIM:SPH.L) ("Sinclair" or the "Group"), the international aesthetics company, announces a trading update for the six months ended 30 June 2017.

Unaudited sales for the six months ended 30 June 2017 were £20.0 million, (£18.2 million at constant currency) compared with sales of £17.2 million for the same period in 2016, representing headline growth of 16.3% and in line with market expectations.

Silhouette Soft® sales reached £7.3 million in the period, compared with £6.1 million in H1 2016, reported growth of 20%. Underlying in-market sales growth of Silhouette Soft® averaged 13% in the period, below the reported number which was boosted by the consolidation of sales in Brazil. Growth has been moderated by underperformance in the UK and France linked to local issues which are now largely resolved. Silhouette Soft® continued to deliver strong growth in multiple markets including Spain, South Korea and the Middle East, with Brazil particularly strong during Q2. With strong LATAM seasonality in Q4 and favourable distributor stocking patterns, management anticipate an acceleration of growth rates in the second half.

Silhouette Instalift™. Following the successful launch by partner ThermiGen in the US in August 2016, revenue for the 1H 2017 period reached £2.3 million. Doctor training continues its rapid roll-out and ThermiGen is on track to train over 1,000 physicians in 2017. Purchase trends show both high initial order values and encouraging reorder rates.

In June the FDA approved a commercially significant change to the Silhouette Instalift™ label, with physicians no longer required to use a permanent anchoring suture. This allows Sinclair and ThermiGen to promote, train and market the use of Silhouette Instalift™ via the clinically desirable, self-anchoring procedure that is universally established for Silhouette Soft® across the rest of the world.

Ellansé® delivered revenues of £4.2 million, unchanged from the same period last year. The reported number is affected by the ordering patterns of larger partners in the APAC region. Underlying demand for Ellansé® is strong with in-market data showing an average growth rate of 47% in the period. Growth remains broad based across Sinclair's direct European operations as well as distributor markets, notably in the Middle East and Asia. Management remain very confident for the outlook for Ellansé® and anticipate a return to strong reported sales growth in the second half.

Perfectha® reported revenues increased 13.5% to £4.2 million against £3.7 million in H1 2016. Average in-market growth rates for the period are again ahead of the reported sales growth at 23%, pointing to strong demand for Perfectha® and providing confidence in the outlook for H2.

Sculptra® revenues were £2.0 million compared with £3.2 million in the prior year, reflecting de-stocking by certain wholesalers. The Company expects to see a moderate increase in sales in the second half relative to the first half.

Net cash at 30 June 2017 was £0.1 million (£16.8 million at 31 December 2016) in line with management expectations. Net cash at the end of 2017 is expected to be broadly neutral as previously guided. The cash outflow in the period includes operating cash outflows, settlement of the Alliance Pharma warranty claim and restructuring costs incurred in 2016 (in aggregate £6 million) , payment of Silhouette InstaLift™ sales milestone and deferred considerations (£5 million in total) and planned capital expenditure. The Group has drawn an initial £3 million under the debt facility put in place in the period, and has access to a further £7 million of undrawn facilities.

Chris Spooner, CEO, commented: "I am pleased with the performance of the Group in the first half of 2017 which reflects the growth profile we anticipated at the beginning of the year. Order phasing, seasonality of sales in Brazil and strong anticipated US growth will drive sales in H2 which we expect to be considerably higher than H1. The FDA approved label change for Silhouette Instalift™ is excellent news which will make training simpler and cheaper. Our recent acquisition of the Refine system fits our strategy of expanding the Silhouette brand and I see strong medium term prospects for this unique product. We remain focused on driving revenue growth whilst maintaining cost control and we remain confident that the Group will deliver an adjusted EBITDA profit for the full year."

Sinclair will publish interim results for the 6 month period ended 30 June 2017 on 19 September 2017.

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About Sinclair Pharma plc - www.sinclairpharma.com 

Sinclair Pharma plc is an international company operating in the fast growth, high gross margin, global aesthetics market. Sinclair has built a strong portfolio of differentiated, complementary aesthetics technologies, which are experiencing significant growth, targeting unmet clinical needs for effective, high quality, longer duration, natural looking and minimally-invasive treatments. Sinclair is planning entry to multiple new geographic markets and line extension launches over the next few years. The Group has an established sales and marketing presence in the leading EU markets and Brazil, and a network of international distributors including ThermiGen in the US.

"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.