Shares in specialist services provider to the pharmaceutical industry Ergomed (ERGO:AIM) jumped 11% to £11.80 on Tuesday after the company said 2021 profit would be ahead of analysts’ forecasts.
The company said ‘excellent’ trading across both Pharmacovigilance and Clinical Research Organisation businesses in the first half had continued through to the year ended in December, resulting in a strong order book going into 2022.
The order book is up around 24% to £240 million, which Numis said ‘points to an overall organic book to bill for the year in the region of 1.4x, which provides a good underpin and bodes well for Ergomed to continue to grow above the market in 2022.’
US MOMENTUM
Ergomed has built a strong presence in the strategically important US market through acquisitions in prior years which are now fully integrated as well as by making key senior management hires. US revenues in the year grew 59.5% on a reported basis and 71% in constant currencies.
Overall revenues for 2021 are expected to be around £118.6 million, up 37.3% year-on-year and in line with market expectations despite foreign exchange headwinds of around £6 million.
The Clinical Research Organisation business saw revenues grow 85.6% to £58.1 million including the acquisition of MedSource, while underlying organic growth was 33.4% in constant currencies.
The Pharmacovigilance business saw revenues climb by 14.2% in constant currencies to £62.9 million.
The company remains cash generative and debt free, ending the year with cash balances up 64% to of £31.2 million and unutilised banking facilities of £30.0 million.
Ergomed said it was ‘strongly positioned’ in the ‘resilient and fast growing’ areas of rare diseases, cancer and pharmacovigilance sectors.
Pharmacovigilance is the science relating to the detection and prevention of adverse effects from new drugs and therapies. The Clinical Research Organisation business provides expert guidance and execution services for clinical trials to be completed safely and efficiently.
