Shares in Alliance Pharma (APH:AIM) have soared to a new record high of 95.2p after having morning sickness drug Diclectin approved by a regulator.
The Medicine and Healthcare Products Regulatory Agency (MHRA) has given the green light to the treatment and is expected to grant approval to sell the product in the UK in the next few weeks. Further launches of Diclectin are pencilled in for Europe next year.
Alliance Pharma says there are currently no licensed treatments in the UK for nausea and vomiting of pregnancy in the UK, believing its drug to represent a ‘sizeable mid-term opportunity.’
The news is a big breakthrough given that last summer Diclectin failed to receive marketing approval for the UK. We understand that Alliance Pharma subsequently went back to the regulator with more information in order to get approval.
Diclectin treats nausea and vomiting during pregnancy, which can impact up to 80% of all pregnant women. It can be debilitating and get worse if left untreated.
Numis analyst Sally Taylor believes Alliance Pharma’s drug - which has been licensed from Canadian group Duchesnay - has sales potential of over £20m over five years, potentially hitting £40m in peak sales in the longer term.
Taylor says Alliance Pharma’s launch of Diclectin will require investment in the UK and Continental Europe, but Alliance will benefit from leveraging its international platform. The drug is already approved for sale in the US, Israel, South Korea and Singapore.
Investec analyst Andrew Whitney flags the upcoming UK launch of Diclectin as a significant catalyst for Alliance Pharma’s share price, implying it could be worth over 15p per share.
It is the latest in a string of good news for the company, as reflected by Alliance Pharma’s share price having increased by 83% in the past 12 months. It is one of Shares’ top picks for the year, having said to buy at 61.38p last December.
