Shares in global products and pharmaceutical services company Clinigen (CLIN:AIM) sank 25% to 626p after warning that profits will be lower than guided as Covid-19 continued to impact hospital-based cancer treatments and delayed clinical trials.
The company highlighted that demand for its kidney cancer drug Proleukin was ‘significantly’ weaker than expected in recent months.
Clinigen became the exclusive global owner of the drug in 2019 when it forked out an initial $120 million for the rights.
H2 GROWTH NOT MATERIALISED
The company had expected a stronger rebound in the second half of the year, but clearly the ‘normalisation’ of hospital services is taking longer than anticipated.
Management has maintained its revenue guidance for growth at the lower end of the 5%-to-6% range but now expects adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) to be in the range of £114 million-to-£177 million.
Despite the downgrading of expectations, according to Refinitiv compiled data, analysts aren’t too far off the pace.
Current consensus estimates show revenues growing 6% to reach £535 million, and for EBITDA to drop 2.7% to £126.8 million, at the bottom end of lowered guidance.
REBOUND EXPECTED
Despite the negative near term news, management offered an upbeat outlook saying, ‘due to the strength of our underlying business, the simplification of our operating model and continued high-level of business wins in Services, we are optimistic about the future and anticipate a return to double digit growth in the next financial year.’
Consensus expectations anticipate EBITDA rebounding by 16% to £147.5 million in 2022.
