A profit warning at Quantum Pharma (QP.) has caused investors to jump ship, triggering a share price crash of over 50% to 34.38p.
The pharmaceutical manufacturer speculates its performance will be materially below expectations, which it blames on challenges getting generic and medical device products to market.
That's led to an effective slashing of sales guidance and the company has also decided to close its NuPharma division, part of its unlicensed treatments business. It suffered a £0.5m trading loss and has required significant management resources since its acquisition in July 2015.
N+1 Singer says the interims are in line, but notes that weakness in non-core activities has impacted earnings expectations, which need to be 'pared back materially.'
Operating profit has more than halved in the year to 31 July from £3.2m to £1.2m, while pre-tax profit plummeted from £2.8m to £0.8m over the same period.
Following a review of the business, acting CEO Chris Rigg revealed the core special business is generating cash, while market data supports the unlicensed to license pipeline.
However, the review suggests the company should focus primarily on specials and its licensed and unlicensed platform to increase value and debt should be reduced to support growth.
Revenue has climbed from £34.3m to £42.8m due to revenue growth across all three divisions, with the strongest contribution from the Medication Adherence division.
The Niche Pharmaceuticals division has launched five new products, including an expanded Vitamin D range and two more products in the Mucodis group of medical devices.