Speciality pharmaceutical and services business Clinigen (CLIN:AIM) declines 1.6% to 499.75p despite an early morning rally, as the market chews over its latest attempt to rejuvenate its plateauing revenues streams.
Clinigen, a running Shares Play of the Week has signed a distribution agreement with Italian outfit Abiogen Pharma to supply Nerixia throughout the European Union (EU) to treat sufferers of brittle bone disorder Osteogenesis Imperfecta (OI). Yet the shares reaction suggests that the market is reluctant to hand the company the benefit of the doubt after February's profit warning.
The £419.3 million cap believes that sales of its antiviral treatment Foscavir have peaked while its prostate cancer project with Japanese pharmaceutical Astellas Pharma (4503:JSE) is coming to an end. This agreement boosted the gross profits in its consultancy division Global Access Program (GAP) by 146% last year but will leave a big hole in this year’s results unless it attracts new business.
OI is not widespread, estimated to effect nine in every 100,000 people, or 0.009%, but the deal is welcome positive despite the company failing to offer guidance on the terms of the arrangement, or its expected contribution to profits. In Clinigen's defence, without an alternative licensed treatment for the condition available in Europe, perhaps guidance would have proved little better than guesswork any way.
This is the latest step at attracting new revenue generators following the acquisition of oncology support therapy Savene for an undisclosed sum (31 Mar).