TIDMCLIN
RNS Number : 6143L
Clinigen Group plc
14 January 2021
14 January 2021
Half Year trading update
Clinigen Group plc (AIM: CLIN, 'Clinigen' or the 'Group'), the
global pharmaceutical Products and Services company, today provides
an unaudited trading update for the six months ended 31 December
2020.
COVID-19 and UK withdrawal from the EU
-- COVID-19 has continued to impact the Group's business as
global healthcare networks remain primarily focused on treating the
pandemic and now also the roll out of the vaccines, delaying normal
hospital procedures.
-- Clinigen has continued to prioritise the health and
well-being of all employees whilst ensuring continued supply of
products to healthcare professionals and their patients.
-- Over the period end, the Group successfully implemented its
'Brexit' solution and continues to offer an uninterrupted supply of
product and service to patients in both the UK and EU.
First half 2021 trading update
-- Net revenues of at least GBP230m, representing a 4% increase
on a net constant currency(1) basis and 3% on a reported basis
compared to last year.
-- EBITDA of at least GBP54m, representing a decrease of 10% on
a constant currency(2) basis and a decrease of 13% on a reported
basis compared to last year. As previously guided to, operational
leverage has decreased in H1 given the impact of COVID-19 and
expected change in sales mix.
-- Prior guidance for FY 2021 organic net revenue growth remains
unchanged; management continues to expect growth to be at the lower
end of the 5-10% medium term range.
-- Net debt as at 31 December 2020 of GBP352m, (GBP330m excl.
IFRS 16 adjustment) representing leverage(3) of 2.8x, meaningfully
below the Group's temporary banking covenant of 3.5x.
Reorganisation of operating structure
-- Move from three divisions (Clinical Services; Unlicensed
Medicines; Commercial Medicines) to two divisions: "Products" and
"Services". This provides multiple benefits:
o Aligns internal structure with the end-customer (healthcare
professional or pharma company/manufacturer).
o Improves operational effectiveness across the Group and
facilitates the ability to drive more meaningful
revenue synergies by 'following the molecule'.
o Provides a more simplified business model for external
stakeholders.
Shaun Chilton, Group Chief Executive Officer of Clinigen,
said:
"The team has worked incredibly hard to ensure the continuation
of supply of essential medicines to healthcare professionals around
the world in spite of the constraints caused by COVID-19.
Notwithstanding the impact of COVID-19 we have continued to deliver
on our strategy in H1 as outlined by our robust top line
performance.
"The reorganisation from three divisions to two has multiple
benefits both internally and externally. It more intuitively aligns
the structure of the Group with our end-customers, will improve
operational effectiveness and drive greater synergies within and
between each division, ultimately benefiting patients. We believe
it will also provide investors with a more transparent and
simplified business model.
"Despite the uncertainties presented by COVID-19, we remain
confident in an acceleration of the business into FY22 not least
given the business development wins already captured and our
pipeline of new product opportunities, including Erwinase."
Operations
As stated at the Annual General Meeting, Group trading in H1 has
been in line with market expectations, despite the ongoing impact
from the COVID-19 pandemic, which management estimate took c5%-10%
off H1 EBITDA. Trading in December was marginally weaker than
management anticipated as lockdowns significantly increased across
Europe, affecting normal rates of hospital procedures, and as
attention of the healthcare services also turned to the roll out of
the vaccines.
The Board remains optimistic for the Group's outlook
notwithstanding the near-term headwinds and uncertainty caused by
the pandemic. The Services division has made significant progress
in creating new business opportunities. In the Products division,
key asset, Proleukin continues to trend positively in the US and
there is yet to be a generic Foscavir launch in either the EU or US
territories.
As previously guided, net revenue growth is expected to be more
materially second half weighted this year given the impact of
COVID-19 and the timing of new programs ramping up alongside
Proleukin shipments to key customers.
As expected, Net debt increased from GBP312m at June 2020 to
GBP352m as at the end December 2020. Stronger free cash flow
conversion was principally offset by the $89.5m CSM deferred
consideration paid in September 2020. The Directors reiterate the
aim to paydown and maintain net debt leverage (3) within a range of
1.0x to 2.0x EBITDA on an ordinary basis within 12 months.
Reorganisation of operational structure
At the upcoming half year results, the Group will change its
reporting structure from three divisions to two: "Products" and
"Services". The Board believes that this simpler structure better
aligns the Group with its two distinct customer groups, will
improve internal operational effectiveness and will be more
transparent for investors.
Products will comprise Commercial Medicines and the Global
Access business of Unlicensed Medicines, representing Clinigen's
pharmaceutical product, international licensing and product
sourcing platform aimed at servicing healthcare professionals.
Products will be led by Sam Herbert who has recently joined the
Group as Chief Operating Officer, supported by Benjamin Miny
(previously EVP of Commercial Medicines).
Services will include Clinical Services and the Managed Access
business of Unlicensed Medicines, representing the Group's high
value, niche services offerings for Pharmaceutical and Biotech
companies and will be led by Pete Belden (previously EVP Clinical
Services).
The Group expects to publish its results for the six months
ended 31 December 2020 on Tuesday 23 February 2021 and ahead of
this, Clinigen will issue a reconciliation showing how recent
historic trading would have been reported on the new two divisional
basis.
(1 Net constant currency is growth applying prior period's
actual exchange rate to this period's result excluding the impact
of pass through costs in the Managed Access business. 2 Constant
currency is growth applying prior period's actual exchange rate to
this period's result. 3 Bank covenant leverage is calculated by
dividing adjusted EBITDA of the Group for the last 12 months by net
debt at the period end. Adjusted EBITDA includes the EBITDA from
the businesses and assets acquired during the last 12 months,
including on a pro forma basis the year prior to it becoming a
member of the Group.)
-Ends-
Contact details
Clinigen Group plc Tel: +44 (0) 1283
495 010
Shaun Chilton, Group Chief Executive Officer Investors @ clinigengroup
Nick Keher, Group Chief Financial Officer . com
Numis Securities Limited - Nominated Tel: +44 (0) 20 7260
Adviser & Joint Broker 1000
James Black / Garry Levin / Freddie Barnfield Numis@Clinigen.com
Tel: +44 (0) 20 7653
RBC Capital Markets - Joint Broker 4000
Marcus Jackson / Elliot Thomas
Instinctif Partners Tel: +44 (0) 20 7457
2020
Adrian Duffield / Melanie Toyne-Sewell
/ Phillip Marriage clinigen@instinctif.com
Notes to Editors
About Clinigen Group
Clinigen Group plc (AIM: CLIN) is a global pharmaceutical and
services company with a unique combination of businesses focused on
providing ethical access to medicines. Its mission is to deliver
the right medicine to the right patient at the right time through
three areas of global medicine supply; clinical trial, unlicensed
and licensed medicines. The Group has sites in North America,
Europe, Africa and Asia Pacific.
Clinigen now has over 1,150 employees across five continents in
16 countries, with supply and distribution hubs and operational
centres of excellence in key long-term growth regions. The Group
works with 21 of the top 25 pharmaceutical companies; interacting
with over 18,000 registered users across over 115 countries,
shipping approximately 6.5 million units in the year.
For more information on Clinigen, please visit
www.clinigengroup.com
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