MDX Meldex

    RNS Number : 5043A
  Meldex International PLC
  01 August 2008
   

    1 August 2008

    Meldex International plc

    Meldex reports strong trading progress in pre-close update

    London, UK, 1 August 2008, Meldex International plc ("Meldex", the "Company"
    or the "Group") (AIM:MDX), the specialty pharmaceutical and healthcare company, announces strong results and significant trading
progress prior to the close period preceding publication of the Group's interim results, planned for announcement early Autumn.

    Key Highlights:

    *     Revenue growth in H1 2008 of 270% to circa �23.5 million from �8.7 million in H1 2007: results in line with Meldex's budget and
towards the top end of market guidance.

    *     Further cross-fertilisation of Group products across geographic infrastructure providing increased scope for revenue growth, for
example, the Soluleaves* product Melatonia in Italy, Melprotect in Germany and Menoflavon in France and other EU countries.

    *     Continued growth of development revenue both in terms of supplying products for the trading divisions (Dexo and Melbrosin) and for
third party licensing and commercialisation.

    *     Increased demand and commercial interest in Group 'lifestyle' product launches such as the NRT Soluleaves* product, DAOsin,
Phytosulin and the new irritable bowel syndrome "IBS" product.

    *     New distribution agreements with, amongst others, Vitabiotics for Austria and Germany, which are expected to contribute to
revenues in H2 2008.


    Richard Trevillion, Chief Executive, said:

    "Meldex has performed well in the first half of 2008 and the Group continues to demonstrate the success of the specialty pharma and
healthcare model.

    Meldex's strategy has been to build a strong sales and marketing infrastructure with the ability to maximise margin from highly
differentiated consumer-focused products. The continued revenue growth demonstrates that this strategy has worked. The Company is now a full
service pharmaceutical business, which allows the Group to either distribute product developments via its own international infrastructure
or identify a global partner for out-licensing.  This choice is rare for a business of our size."

    Product Revenues - Melbrosin and Dexo

    Melbrosin
    H1 2008 has demonstrated the planned growth outlined to the market in 2007. A combination of continued growth in existing products,
product extensions and new launches have underpinned these trends which started in 2006 and 2007. Recent examples of this growth include:

    *     The launch of DAOsin earlier in the year, which has created a H1 sales increase of more than 160%.
    *     In the CEE region (including partnerships with Walmark a.s. and others) the moving annual total sales rate ("MAT") of the
Melbrosin OTC business through 30 June 2008 has increased by almost 400% as compared to the MAT through June 2007.
    *     In addition, Melbrosin is finalising distribution arrangements with one of the largest Indian pharmaceutical companies, to launch
a part of its OTC portfolio in the German and Austrian markets. The launch of these products is planned for H2 2008 and will continue in
2009.

    These new developments are in addition to the continued growth of the core portfolio. 

    Dexo
    Across the Dexo infrastructure the benefits of annualised branded sales have demonstrated strong momentum. This has included building
consumer demand for third party own label products in the EU and US.

    Continued geographic penetration of core products outside their domestic territories, which themselves are growing, has added to
revenues in H1 2008. Dexo is planning the integration of its development of DBP274, a novel Solupol product, which will act as a new
generation of the RocGel franchise in existing and new territories. 

    In the US rapid changes of the DESI-branded range have worked well and new partnerships are expected in the second half 2008. The
Company's strategy is to roll out acquired brands to other markets through its expanding partner base. 

    As with RocGel above, Dexo continues its strategy of launching both new products and variants of existing product ranges, especially to
include its own enabling technologies. An example of this, in conjunction with the AD portfolio, is the Italian launch of Melantonia, a
product using the Soluleaves* technology from within the US portfolio. This will become an increasingly common feature within the Group as
the demonstrable success of this strategy gives the Company renewed confidence in leveraging its technology on acquired and existing
portfolio products.
    Meldex will continue to focus on developing its sales, marketing and distribution. Currently, the Company has a strong portfolio on the
market and a significant development pipeline, which provides opportunity for strong organic growth. As previously announced, the Company is
launching to doctors the first prescription Soluleaves* product for this coming cough/cold season. 


    Development Revenue
    Meldex is concentrating its development and partnering activities on a concentrated number of development programs. During the first
half of 2008, substantial new data has been collated with regards to the technology surrounding FastWrap and Meltums. Third party
development work has commenced with partners in the food and confectionary market areas using a range of our enabling systems. This is in
addition to existing partnerships.

    Significant partnering programs are advanced in a number of areas, for example with DBP167, a novel ibuprofen-based product, and the
Group is expecting to receive continuing revenues in H2 2008. Partners include large multinational pharmaceutical companies, as well as
leading territory specialty pharmaceutical companies. Meldex plans to enter into long term milestone and supply agreements with all of these
partners, generating sustainable long term revenues

    The Company is expanding the partnering program over nicotine and tobacco-based products, both in the current format and also with
Meltums. The Company believes the market for smokeless tobacco-based products is significantly more valuable than smoking cessation
products. 

    Other partnering programs to be concluded in H2 2008 include DBP117 for certain Eastern European territories, DBP118 in certain
territories in Southern Europe, and the FastWrap range of products, which has generated global interest. 

    Meldex is also working with an unnamed party for a specific product using its Wafertab technology. The Company has already received
development income and will work with its partner with launch expected around 2011. Meldex will be responsible for manufacturing the
product, with revenues expected to be in the mid-high single digit million Euros range per annum.


    Key Organic Growth Drivers during the Remainder of 2008
    *     As mentioned in its recent operational update, the Company believes the non-pharmaceutical market for tobacco products far exceeds
the strictly regulated pharmaceutical market for smoking cessation therapy, both in terms of value and potential growth for its nicotine
replacement product. This has been driven by a number of factors, including legal changes in freedom to smoke. Demand for smoke free
products continues to grow with only limited alternatives available. 
    *     Analgesic products continue to be a theme of development as the Group's delivery systems provide real competitive advantage, such
as speed of action. A careful penetration of the market has been chosen as the ideal sales and marketing approach using own label brands as
opposed to new brand launches. 
    *     DAOsin, which has already been launched successfully in Germany and Austria, is an important product and has received a very
positive response from the market. Due to this reception, Melbrosin plans to launch the product across the Group's EU infrastructure as well
as in certain other territories.
    *     Market feedback for Phytosulin, a product designed for the treatment of symptoms related to  metabolic syndrome, suggests it
should be marketed with a similar strategy to DAOsin, focused on the Type II diabetes indication, which the Company believes is the largest
globally in value terms. The product will be generating revenues in H2 2008 in Austria and Germany.
    *     As indicated, Meldex continues the build-up and integration of Melbrosin France. This division is launching several existing
products into the French market and will be responsible for OTC products such as Menoflavon and DAOsin within this territory. 
    *     Dexo Italy is generating strong growth and launched seven new products in Q1 2008. 
    *     External development revenues in 2007 were �6.3m and Meldex expects substantial growth going forward, with a number of development
milestones during 2008. On 21 December 2007 the company announced several licensing agreements with significant payments. These and other
agreements are expected to materially contribute to 2008 revenues.
    *     New development agreements are expected to continue as the Group's development capability is scaled and expanded. Further, royalty
revenues are expected to increase sharply from both existing partners and new relationships with on market products

    For further information:

    Meldex International plc + 44 (0)20 7098 9880


    About Meldex International plc

    Meldex International plc is an innovative specialty pharmaceutical and Over The
    Counter ('OTC') product company. Listed on London's AIM in May 2003, Meldex has over 80 patents granted or in business within 24 patent
families and has product development agreements and strategic alliances with several global healthcare companies.

    Meldex has acquired sales and marketing resources within Europe and the US as a launch mechanism for its own pharmaceutical products.
Meldex acquired the Melbrosin business in June 2007 for a consideration of about EUR 23 million. Melbrosin's focus is on consumer OTC
healthcare products based on substances of natural and plant origin which are developed into consumer orientated brands then scaled,
produced and distributed by Melbrosin. Melbrosin complements the prescription pharmaceutical sales and marketing business created and
expanded in 2006.

    The business continues to develop innovative delivery mechanisms enhancing both its own product range and those of selected partners
using its proprietary XGEL TM polymer technology.

    For further information please go to www.meldexinternational.com

This information is provided by RNS
The company news service from the London Stock Exchange
 
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