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Allergy Therapeutics confident of further growth

Its European markets were largely flat but the company still managed to achieve top-line growth of 18% on a constant currency basis

Dust mites
These were "mitey" good figures

Allergy vaccines specialist Allergy Therapeutics plc (LON:AGY) continued to gain market share in the second half of 2016.

The group issued half-year results that largely confirmed the numbers in its January trading update.

Revenue rose 39% to £40.4mln from £29.0mln in the second half of 2015, helped by favourable exchange rate movements. Stripping out currency fluctuations, the increase was still an impressive 18%.

The revenue uplift was achieved despite European markets as a whole showing no or very little growth.

Germany, Austria, Spain and The Netherlands contributed the most to top-line growth, Allergy revealed, although all markets saw sales head higher.

In the 12 months to 31 December 2016, market share grew to 13% compared to 12% in the year ended 30 June 2016 in the markets in which the group competes.

The flagship pollen allergy Pollinex franchise continues to expand, while Acarovac Plus, its dust mite allergy treatment, continues to grow well in Spain and has been launched in Austria.

Sales of synbiotics products – products that are a synthesis of prebiotics (substances that encourage the growth of microorganisms) and probiotics (health-giving microorganisms) - have performed well in Italy and Spain.

Profit before tax shot up to £7.2mln from £1.3mln as research & development (R&D) costs declined to £3.82mln from £6.54mln the previous year.

“The board and management team expect that growth in net sales will continue in the second half of the year and have great confidence in the future of the business,” the company said.

“As planned, research and development costs are expected to rise significantly in the second half of the year compared to the first half, reflecting the exciting preparation for the expected start of two major trials (US Grass MATA MPL Phase II and PQ Birch Phase III) as well as investment in infrastructure to progress the important TAV process. Other costs are expected to be similar to H1 2017,” Allergy Therapeutics confirmed.

Broker finnCap, which rates the shares a 'buy' said that apart from a slightly lower than expected first half R&D charge, “which is likely to be timing related”, it will make no change to its full-year forecasts.

“We retain a near term target price of 43p and point to the further upside that Pollinex Quattro (PQ) Grass programme in the US offers investors,” the broker said.

Shares in Allergy rose 2.1% to 24.5p on the results.

Quick facts: Allergy Therapeutics PLC

Price: 10.74 GBX

AIM:AGY
Market: AIM
Market Cap: £63.62 m
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