Investors are worried about a slowdown in growth at speciality pharmaceutical and services group Clinigen (CLIN:AIM), down 18.3% to 522.5p. Before today's half-year results, the shares had rallied 300% since floating on Aim in September 2012 at 164p, so the cautious outlook has triggered mass profit taking in the stock.

The running Shares Play of the Week hints that sales of its antiviral treatment Foscavir are levelling out. It also reports the 146% profit rise in its consultancy and management business global access programs (GAP) is due to its enzalutamide program which is now winding down.

Yet Clinigen expects to add a new product to its speciality pharmaceuticals division in 2014 to grow sales in the coming years.

Web - Clinigen - 26 February

The group’s £10.9 million pre-tax profit in the six months to January was 12% higher than recorded in the same period last year. The dividend has been raised by 66% to 1p a share.

At the end of December 2013 it had £16.8 million cash, which, along with a £20 million borrowing facility (it is currently debt free), gives it a war chest on an acquisition pipeline that chief executive officer Peter George says has never been as strong.

Clinigen also aims to improve margins in the GAP business, which stands at 16%, by winning new clients and growing its existing programs.

The profit generate by supplying drugs to clinical trial improved 12.4% to £6.5 million, while those in its speciality pharmaceuticals business grew by 4.3% to £10.6 million.

Numis analyst Charles Weston believes that profit growth in the second half will be similar to those achieved in the first six months of the year and that its success in the M&A market could drive upgrades at the company.

Investec downgrades from 'hold' to 'sell', saying the current valuation offers 'little margin for error'. Yet it is worth noting that the shares have already fallen below Investec's 560p price target. The broker also says the investment case remains sound for long-term investors.

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Issue Date: 26 Feb 2014