Allergy Therapeutics plc (LON:AGY), the fully integrated specialty pharmaceutical group specialising in allergy vaccines, announced today its unaudited interim results for the six months ended 31 December 2018.
· Revenue increased by 10.6% (both reported and constant rate*) to £46.7m (H1 2018: £42.2m)
· 27% growth in pre-R&D operating profit to £15.7m (H1 2018: £12.3m) largely as a result of investment in the commercial business last year and a higher gross margin
· R&D expenditure lower at £5.0m (H1 2018: £5.9m) due to lower level of activity
· Cash balance of £31.6m (30 June 2018: £15.5m)
· Oversubscribed equity raise of £10.6m gross in July 2018 to support the development of the Group’s clinical pipeline
· Increased market share in Germany to 14.5%** (2018: 13.7%)
· Breadth of portfolio demonstrated by strong performance from ultra-short course products as well as venom and modified allergen house dust mite therapies
· Completion of PQ Birch Phase III trial, with data readout expected before the end of Q1 2019
· Scale up of Polyvac Peanut progressing well with intention to begin first in human trial in 2019
· Modified allergen house dust mite Phase I trial completed last patient last treatment with readout expected in H1 2019
Commenting on the interim results, Manuel Llobet, Allergy Therapeutics plc Chief Executive Officer, said:
“The Group has made a strong start to the financial year. Our ultra-short course products continue to drive good sales growth in a relatively flat market and the Group’s pre-R&D operating profit has increased as a result of investment into our commercial business last year and our focused sales and marketing strategy. 2019 will be a very important year for the Group and, in particular, our ultra-short course technology platform, with the start of the pivotal Phase III Grass MATA MPL trial for the US and Europe. With an increasing market share, a healthy balance sheet, and an exciting clinical pipeline nearing key value inflection points, we look to the future with confidence.”
* Constant currency uses prior year weighted average exchange rates to translate current year foreign currency denominated revenue to give a year on year comparison excluding the effects of foreign exchange movements. See table in financial review for an analysis of revenue.
** Market data and internal estimates for the 12 months ended 31 December 2018 of Allergy Therapeutics’ direct sales in Germany.
Joint Statement from the Chairman and Chief Executive Officer
The Group has performed strongly in a relatively flat market and has continued to leverage its infrastructure to achieve significant growth in operating profit before R&D (27% growth over H1 2018). Despite a mixed pollen season and the continued challenges of the regulatory environment, the Group has achieved market share gains through new sales channels and further penetration in mature markets. The performance of the Northern European business has been strong.
Allergy Therapeutics continues to perform well with revenue growth of 10.6% (both reported and constant rate), and taking market share. This continued growth reflects the quality of the Allergy Therapeutics portfolio, the efficiency and strength of the supply chain and the quality of sales and marketing. The growth in sales has been across most markets with the main contributors being Germany, Austria, Switzerland and Netherlands benefiting from key investments in the sales team. Spain has also recovered well from the removal of all bacterial products from the market with substitution to other products partially filling the gap.
The European spring and summer seasons of 2018 were strong for tree pollens while the exceptionally warm weather last summer dampened the impact of early strong grass pollen. The house dust mite season was weaker, although our house dust mite products continued to perform well in the circumstances (Data: Insight Health Germany July – Nov 2018).
Regulatory Affairs & Clinical Development
The manufacturing scale up of the Group’s peanut product, Polyvac Peanut, which is critical to ensure the product can be manufactured commercially in a consistent manner for clinical trials and in GMP conditions, is progressing well. The Group expects to start the first-in-human trial before the end of calendar year 2019. The modified allergen + MPL house dust mite Phase I trial remains on track and due to report in H1 2019.
The PQ Birch product has been injected more than 26,000 times between 2005-2018 across Europe. Since the beginning of the TAV process in Germany in 2010, two successful Phase II trials have been completed and the PQ Birch Phase III trial will read out before the end of Q1 2019. The delay has been caused by a longer than expected time needed by the Group’s trial service providers to audit, review and consolidate data from the field trial. Allergy Therapeutics remains blinded to the data package and management looks forward to receiving the data.
Discussions with the Paul Ehrlich Institut (PEI) and the FDA continue regarding the upcoming PQ Grass Phase III field trial, which is due to start in the autumn of 2019. The Group is confident in its preparations for this pivotal trial which will be conducted in the US and Europe.
The German TAV (Therapy Allergy Ordinance) process remains underway for all of the ten Allergy Therapeutics’ products that started the process. Latest data suggest 65 of the original 123 products from all market participants now remain in the process. The first oral therapy Phase IIa trial is expected to start this calendar year.