31st Mar 2005 07:02
Sinclair Pharma PLC31 March 2005 Sinclair Pharma Plc Interim results Significant regulatory and commercial progress with 3 product approvals and 7 licensing deals Godalming, 31 March, 2005: Sinclair Pharma plc ("Sinclair" or the "Company")(SPH.L), the specialty pharmaceutical company focused on the acquisition anddevelopment of patented pharmaceutical products, today announces its interimresults for the half-year ended 31 December 2004. Operating Highlights • Significant regulatory progress with 3 product approvals o FDA approval for Aloclair(R) Gel (for mouth ulcers) o EU approval for Decapinol(R) ( for gingivitis) o EU approval for AlogonTM (for sore throats) o Two further FDA 510(k) filings made for SebclairTM and AlogonTM • Important commercial progress with 7 licensing deals o AtopiclairTM (for atopic and contact dermatitis) licensed in US to Chester Valley Pharmaceuticals o All 3 Aloclair(R) products licensed in Canada o First Decapinol(R) (for gingivitis) distribution agreement in EU signed with Dompe in Italy o Aloclair(R) Spray (Alovex(R)) agreement signed with Recordati in Italy o One Far East licensing agreement: XclairTM in Korea • Agreed to acquisition of Euroderm RDC SpA providing direct sales force in Italy (completed post period) • Sinclair now has 11 products approved in the EU and 8 in the US Financial Highlights • First Half in line with expectations o Turnover £0.8m (H1 2004: £0.9m) o Operating loss of £2.3m (H1 2004: £1.3m loss) o Loss per share of 4.47p (H1 2004: 3.3p loss per share) o Cash balances of £6.7m at 31 Dec 2004 (31 Dec 2003: £9.1m) • Strong and improving order book several times larger than at start of H1 • Positive outlook for H2 with substantial growth expected Progress since period end Announced today in this release • Licensed Decapinol(R), for the treatment of gingivitis, in Spain to Laboratorios Inibsa SA ("Inibsa") • Licensed Aloclair(R) Spray for the treatment of mouth ulcers in Hungary to Vicis Pharma Kft ("Vicis") • A double blind study demonstrating the efficacy of AtopiclairTM in atopic dermatitis • GelclairTM/Aloclair(R) patent approved in the EU Already announced • Aloclair(R) Spray for the treatment of mouth ulcers received 510(k) approval in the US • Wal-Mart agrees to place Aloclair(R) Rinse (Rincinol(R) in the US) on their shelves from April 2005 • Further agreement with Sunstar Suisse SA ("Sunstar") for distribution of Aloclair(R) Rinse and Aloclair(R) Gel in 8 more European countries • Further agreement with Sunstar for distribution of Aloclair(R) Spray in 20 European countries • Licensed Aloclair(R) Spray in Turkey to SSM • Aloclair(R) Rinse received accreditation from the UK Dental Health Foundation • Licensed SalinumTM for the treatment of xerostomia and Xclair TM for the treatment of radiation dermatitis to ORCA Pharm for distribution in Germany • GelclairTM/Aloclair(R) patent approved in the US • Licensed AtopiclairTM for the treatment of atopic dermatitis in Portugal to Dysonovis Mr Steve Harris, Non-executive Chairman, said: "With 3 product approvals and 7license deals struck in our first half and further progress since then Sinclairhas made very good progress in achieving its strategic objectives. We believethat our US AtopiclairTM licensing agreement with Chester Valley PharmaceuticalsInc., with their highly experienced derma executives and dedicated sales force,will result in the rapid growth of sales in the important US market. With 11products now approved in the EU, 8 in the US and a very healthy order book, wehave laid the foundations for future profitable growth and look to the futurewith confidence." Contact details:Sinclair Pharma plcDr Michael Flynn, CEO Tel: +44 (0) 1483 426 644Jerry Randall ACA, CFOJohn Barrington-Carver, Corp. PR Tel: Mobile +44 (0) 7831 655 630 Financial DynamicsBen Atwell / Lucy Briggs Tel +44 (0) 207 269 7242 Chief Executive's Review The key events for this period were the conclusion of a licensing agreement inthe US for AtopiclairTM, one of our largest products, the conclusion of ourfirst licensing deal in Europe for Decapinol(R), the agreement to acquireEuroderm RDC SpA ("Euroderm") (completed post period) and three regulatoryapprovals. We now have eleven products approved in the EU and eight in the US.This progress was complemented by a strong and growing order book. We continue to make significant regulatory and licensing progress. In the halfyear to 31 December 2004, we received US 510k approval for Aloclair(R) Gel, ourproduct for the treatment of mouth ulcers. We have also achieved EU approvalsfor Decapinol(R), for the treatment of gingivitis and AlogonTM (formerly calledT-Go), for the relief of sore throats. Additionally, we signed seven newlicensing agreements over the period: one US distribution agreement, threeCanadian, two in Italy and one in the Far East. In the US, we concluded an agreement in December for the marketing and sale ofAtopiclairTM for atopic dermatitis (eczema) and contact dermatitis. We signed aCanadian distribution deal for all three Aloclair(R) products (Rinse, Gel andSpray) in November. In Italy we signed partners for Aloclair(R) Spray (Alovex(R)) in November and for Decapinol(R) oral rinse for gingivitis in lateDecember. Lastly, in Korea we signed an agreement for XclairTM for radiationdermatitis. During this half-year we re-filed our sebborrheic dermatitis product SebclairTMin the US and we also filed a 510(k) application for our patented "T-Go" productfor rapid relief of sore throat. This product has now been re-named AlogonTM.We hope to receive approval for both of these products in 2005. In December we agreed to acquire the business of the private Italian dermacompany Euroderm RDC SpA which was completed on 31 January 2005. Euroderm hasits own range of products and a derma-focused sales force. The company has 21sales agents that sell to specialists and pharmacies, and 12 other staff. Our financial results for the period are in line with expectations. The modestdecline in revenues is largely as a result of the timing of orders. However,our order book has grown substantially as our expanding licencees' marketing anddistribution networks launch our lead products in more of our targeted markets.This will reflect positively on our future revenue streams. Aloclair(R) remainsour largest product in terms of sales and we expect this to be true for the fullcurrent financial year. GelclairTM, AtopiclairTM and Decapinol(R) product saleswill also make a contribution in the second half of the financial year. Mostencouragingly we ended the half year with a strong order book some three timesas large than at the beginning of the period and post-period this has continuedto grow to historic high levels, giving us confidence that we will end the yearin line with market expectations. Regulatory progress Product registration approvals continue to progress at a very satisfactory pacein the US and Europe. We achieved one approval in the US and two in Europe inthe first half and currently have several products in the registration processwith outcomes expected in this financial year. With the additional regulatoryapprovals obtained in this half-year, we now have eleven products approved inthe EU and eight in the US. United States Aloclair(R) Gel, a line extension of Aloclair(R) Rinse, for the pain relief ofmouth ulcers and other minor oral lesions received FDA 510(k) approval as amedical device in July 2004, allowing it to be sold over the counter ("OTC").Aloclair(R) Rinse has already received registration approval in both the EU andUS. The US approval of Aloclair(R) Gel will expand its use for the treatment oflarge, single ulcers and also for paediatric use. The markets in which theCompany expects Aloclair(R) to compete are potentially worth US$ 900 million. SebclairTM for the treatment of seborrheic dermatitis, was filed for 510(k)registration in the US in March 2004. The FDA opined that the product would bedesignated in the US as a drug rather than a medical device because of thepresence of salicylic acid. Sinclair has now filed for registration of amodified formulation and anticipates a response from the FDA in the currentfinancial year. AlogonTM (T-Go), Sinclair's product for sore throat (pharyngitis) has been filedfor 510(k) registration with the FDA and an outcome is anticipated before theend of the current financial year. Europe Decapinol(R) mouthwash, a patent protected NCE for the treatment of gingivitis,received registration approval as a Class 2a medical device in the EU in July2004. This was also significantly ahead of the Company's anticipated timeframe,enabling Sinclair to commence partnering discussions ahead of schedule.Sinclair believes that Decapinol(R) is the first new chemical entity forgingivitis for the past 30 years and that it has the potential to significantlyexpand sales in the existing market. AlogonTM (T-Go), a new product for painful throat conditions such aspharyngitis, received EU approval as an OTC medical device in July 2004. Theproduct is presented in the form of a liquid gargle but is also being developedas a tablet and spray. The registration of AlogonTM as a medical device in theEU was achieved significantly earlier than the timeframe Sinclair anticipated itcould take. Licensing and Marketing Progress Following the significant regulatory progress over the last eighteen months, wenow have an expanded portfolio of products available for marketing andlicensing. The number of licensing agreements and territories covered has grownaccordingly. In the first half of this year we have signed seven distributionagreements covering six products including the anticipated AtopiclairTM USagreement AtopiclairTM for atopic and contact dermatitis: In December the Companylicensed the US rights to AtopiclairTM, the first prescription medical deviceauthorised by the US FDA to relieve the symptoms of atopic dermatitis andallergic contact dermatitis, to Chester Valley Pharmaceuticals, a US companyfocused on the dermatology market. Aloclair(R) Rinse, Spray and Gel for mouth ulcers and oral lesions: In OctoberSunstar Butler, part of the multinational Sunstar Group, exercised its option toexpand its distribution of Aloclair(R) in the US into Canada for Aloclair(R)Rinse, Gel and Spray. Aloclair(R) Spray for mouth ulcers and oral lesions: In November RecordatiIndustria Chimica e Farmaceutica SpA, extended its distribution agreement inItaly to include our line extension Aloclair(R) Spray which will be sold underthe Recordati trademark AlovexTM. Sinclair has an existing (September 2002) Hungarian distribution agreement withVicis Pharma Kft ("Vicis") for Aloclair(R) Liquid and has now signed anadditional agreement with Vicis for Aloclair(R) Spray for distribution inHungary. Originally a research based organisation established in 1997, Vicis isan entrepreneurial and aggressive young Hungarian company. In 1998 it startedimporting pharmaceuticals, medical devices and cosmetic products and its salesforce has developed strength in direct distribution into pharmacies. Decapinol(R) mouthwash, a patent protected new chemical entity for the treatmentof gingivitis: In December the Company licensed the distribution rights toDecapinol(R) in Italy to the private Swiss based group Dompe International S.A. XclairTM for the treatment of radiation dermatitis: In November Sinclair signedan agreement with Pharmbio Korea Ltd for distribution of the product in SouthKorea. Sinclair has also licensed XclairTM for distribution in the UK to JJSPharma UK Ltd. JJS is a newly formed, privately held specialty pharma companyfocused solely within the hospital marketplace. SalinumTM Sinclair has licensed SalinumTM its saliva replacement product for distributionin the UK to JJS Pharma UK Ltd. JJS is a newly formed, privately held specialtypharma company focused solely within the hospital marketplace. Acquisition Euroderm RDC SpA. In December, Sinclair agreed to acquire the business of theprivate Italian derma company Euroderm RDC SpA, a privately-owned pharmaceuticalbusiness. This deal, which was completed on 31 January 2005, substantiallyincreases Sinclair's product portfolio and contributes to overall revenues. Itmarks a significant step in the evolution of our strategy and reflects theprogress made since IPO. Our success in registering new products ahead of expectations has meant that wecould accelerate our strategy to move down the distribution chain and gainhigher margins for our products. We will now be able to market our growingportfolio of approved products directly in Italy. By acquiring a cashgenerative company that has capacity for further products we will not incur cashcosts in setting up our own sales force in Italy. We intend to continue thisstrategy across the major territories in Europe. Management At the beginning of the half-year the Board was strengthened by the appointmentof Grahame Cook as non-executive director. Grahame, aged 46, has over 18 yearsin investment banking advising on a wide range of M&A and Capital Markettransactions in the US and Europe. He was until recently Global CEO of West LBPanmure, where he joined in 1999. Prior to that, from 1995, Grahame wasManaging Director of Capital Markets and on the Global Investment BankingManagement Committee at UBS. In December Grahame replaced Andrew Sinclair onthe Remuneration, Nomination and Audit Committees and took over from SteveHarris as Chairman of the Audit Committee. The Company is also pleased to announce the appointment of Mario di Majo as Headof Euroderm which was renamed Euroderm RDC SrL following the conclusion of theacquisition at the end of January. Mr di Majo has over twenty years experiencein pharmaceutical sales and was for the past ten years with Teva Pharma Italia,latterly as Hospital Business Unit Director. Post Period End The Company has continued to enjoy solid progress since the end of the firsthalf. In January following responses to FDA queries on our earlier 510(k)application for Decapinol(R), the FDA advised that Decapinol(R) would require anew device classification and accordingly Sinclair has requested that its filingbe processed as a de novo device 513(f) application. The Company is hopeful of apositive response from the FDA. Also in January we announced that Aloclair(R) Spray, our OTC product for thetreatment of mouth ulcers, had received 510(k) approval from the FDA as amedical device, which now means that all three Aloclair(R) products havereceived regulatory approval in the US. In February Sinclair was advised by Sunstar Butler the US distributor ofAloclair(R) Rinse (marketed in the US as Rincinol(R)) that it had secured theagreement of the US international retail stores group Wal-Mart to place Rincinol(R) on their shelves in the US as early as April 2005. This development isexpected to greatly increase the availability of our leading product in theimportant US marketplace. In Europe, all three Aloclair(R) products already have regulatory approval. InFebruary, Sinclair announced a further agreement with Sunstar Suisse SA("Sunstar"), part of the Sunstar Group, to substantially expand its Europeanagreement for the distribution of Aloclair(R) Rinse and Aloclair(R) Gel intoeight new European countries. Sunstar has, in addition, now also licensedAloclair(R) Spray in all 20 European countries where it sells or will sell theRinse and Gel. Sinclair also announced that it had concluded an agreement withthe Turkish company SSM for the distribution of Aloclair(R) Rinse in thatcountry. A welcome development in the UK was the news from our distributorForest Labs that Aloclair(R) Rinse had received accreditation from the UK DentalHealth Foundation. Aloclair(R) Rinse is the first product to receive suchaccreditation for the pain relief of mouth ulcers in the UK. In January the Company announced that it had signed distribution agreements withthe German company ORCA Pharm for SalinumTM, Sinclair's patented salivasubstitute for patients unable to produce saliva and for XclairTM its productfor radiation dermatitis. The Company also received notification from the USPatent Office confirming the issuance of a US patent for GelclairTM, Sinclair'sproduct for the relief of severe oral ulceration and inflammation from variouscauses (mucositis). As a result, under the worldwide licensing agreement forthe product with Helsinn Healthcare SA a US$ 0.5 million milestone paymentbecomes due in this financial year. Lastly Sinclair concluded the deal toacquire Euroderm. In February Sinclair signed the first European distribution agreement forAtopiclairTM with Dysonovis in Portugal, a young and growing company with asales force that focuses on dermatologists, GP's, paediatricians and pharmacies. Announced Today Sinclair has licensed Decapinol(R), for the treatment of gingivitis, in Spain toLaboratorios Inibsa SA ("Inibsa"). Established in 1948, Inibsa promotes theOralex brand of toothbrush, toothpaste and mouthwash products to dentists inSpain and Portugal. Inibsa has total sales of €50 million including €11.6million of dental sales which enjoyed a 12% growth in 2004. Inibsa also sell arange of hospital specialist products and have a staff of 300 42% of whom areemployed in sales and marketing. The agreement includes a signing fee,milestone payments and a minimum product purchase commitment. Sinclair has licensed Aloclair(R) Spray for distribution in Hungary to VicisPharma Kft ("Vicis"). Sinclair has an existing (September 2002) distributionagreement with Vicis for Aloclair(R) Rinse. Originally a research basedorganisation established in 1997, Vicis is an entrepreneurial and aggressiveyoung Hungarian company. In 1998 it started importing pharmaceuticals, medicaldevices and cosmetic products and its sales force has developed strength indirect distribution into pharmacies. A double blind study demonstrating the efficacy of AtopiclairTM, Sinclair'sproduct for atopic dermatitis in 30 patients with atopic dermatitis waspublished in February in the European Journal of Dermatology, (i) Compared with an emollient vehicle cream in patients with mild to moderateatopic dermatitis Atopiclair was statistically superior showing differences inthe surface area of the body affected by atopic dermatitis (pRelated Shares:
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