---Adds further detail and broker forecasts---
Speciality drug maker Oxford Pharmascience (LON:OXP) today revealed a step towards profitability as two orders from its Brazilian partner helped lift full year revenues by 237 per cent.
The firm, which develops drug delivery systems, today reported full year revenues of £292,000 and a £926,000 loss for the year.
It calls 2011 a ‘breakthrough year’ after repositioning of its business.
OXP said it made great strides in the second half of the year from a sales and revenue point of view, helped by two of four orders for the OXP chew calcium delivery product from its Brazilian partner Aché Laboratórios.
These two orders provided the bulk of OXP’s revenues for the year.
Furthermore, given that another two similar orders have been received since January, this year’s revenues are already on the way to eclipsing 2011.
"The strong second half results are a positive indication that the new strategy to focus on pharmaceutical technology licensing has been the right decision,” said chief executive Nigel Theobald.
“We are very excited about the prospects for our platform technologies and are looking to continue strong revenue growth in the coming years.
Further, we are actively looking to enter into more commercial licensing deals which we feel will benefit our future growth."
OXP said that its increased losses in 2011 were the result of higher costs related to the continued development of the group’s technology and a scaling up of its commercial activities.
Following an equity funding in November, the company ended the year with £1.1 million in available cash.
With this cash-pot and ongoing revenues from its OXP chew calcium delivery product, the company is confident that it can make significant further progress in the current year.
In today’s statement, chairman David Norwood said: “The challenge for the company going forward remains twofold.
First, we must continue to develop excellent science into innovative products that industry wants and requires. Second, we must continue to commercialise these products with major pharma companies to secure a profitable route to market.
I believe that we have the team and technology to achieve these objectives and look forward to the future with confidence.”
On AIM, OXP shares didn’t really reflect this confidence as shares fell 0.1p, or 7 per cent, trading at 1.28p each.
There was, however, nothing to surprise investors in today’s results according to Sanjay Jha, analyst at Hybridan.
Jha believes that sales for the group’s calcium delivery product will continue to grow and in time it will be a profitable business that can cover development overheads for the whole group.
As such, the firm’s drug delivery products, for ibuprofen and other pain killers for example, could then be viewed as ‘stand alone’ projects, he explains.
Meanwhile Jha, whose model assumes £4.5 million in revenue by 2017, reckons OXP will be able to turn a modest profit in the 2014 financial year, rising to £410,000 in 2015 and £650,000 in 2017.
Hybridan rates Oxford Pharmascience as a ‘buy’ with a 4.8p price target.