# Allergy Therapeutics plc Q&A with Zeus Capital’s Healthcare Research Director Dr Gary Waanders (LON:AGY)

- Link: https://www.directorstalkinterviews.com/allergy-therapeutics-plc-qa-dr-gary-waanders-healthcare-research-director-zeus-capital/412722132
- Published: 2017-01-24T11:58:35+00:00
- Author: Amilia Stone

**Zeus Capital** Healthcare Research Director Dr Gary Waanders caught up with DirectorsTalk
for an exclusive interview to discuss **Allergy Therapeutics plc** ([LON:AGY](https://www.directorstalkinterviews.com/company/allergy-therapeutics/agy.l))

 

**Q1: Allergy Therapeutics plc H1 trading update showed strong sales growth in the
6 months to December 31st, Gary what’s driven that growth?**

**A1**: So, according to the trading update sales in H1 are expected to come in 
at £40.4 million compared to £29 million in the same period last year so that’s 
roughly 39% growth on a ‘as reported’ basis and about 18% at constant currency. 
So, the main drivers of that performance were firstly, organic growth in market 
share in Germany, Austria, Spain and the Netherlands and that’s based mainly on 
the competitive profile of the company’s injected allergy vaccines on the Pollinex
Quattro platform.

Secondly, certain key European competitors have been weakened by their own issues:
ALK (ALK-Abello A/S – CPH:ALK-B) had to temporarily shut down some of its manufacturing
facilities for its injected vaccines as these needed upgrading. Allergopharma is
feeling the effects of, I’d say, strategic uncertainty as its German parent, Merck(
Merck KGaA – ETR:MRK), is looking to divest the business. Stallergenes (Stallergenes
Greer PLC – EPA:STAGR), in France, is coming out of its own manufacturing problems
last year and has not regained market share that it lost to competitors like Allergy
Therapeutics plc.

Finally, the relative strength of the euro vs the pound, the vast majority of Allergy’s
sales are euro-denominated so it benefited from that weakness.

 

**Q2: Are these factors also likely to have a full-year effect?**

**A2**: Yes, we believe so and because of that we’ve actually upgraded our sales
forecast in the current year from what was £54.8 million up to £61 million. We expect
gross margins will also have improved as the majority of the costs of goods sold
of Allergy Therapeutics’ production is actually UK-based labour. Against this with
the pound trading in the range of 1.15-1.20 EUR, we expect to see the European costs
increasing so particularly in R&D, in sales, marketing and distribution. So overall,
our forecasts have been updated to reflect these changes.

 

**Q3: Now, aside from the current trading, what other things should we be focussing
on for Allergy Therapeutics plc?**

**A3**: The company, over the past few years, has invested quite heavily in European
operational infrastructure and in R&D so whilst significant clinical trials and 
results from those are not expected in 2017, we do hope to see evidence of new clinical
trials starting to recruit patients. So probably the most important of those is 
a key European Phase III trial of the Pollinex Quattro Birch Pollen vaccine, this
will be starting during the year as well as further trials on the Pollinex Quattro
Grass Pollen which will include a small safety study being conducted in the USA 
and those findings Phase II trial in Europe. So, plenty of pipeline development 
news there, not results but certainly study initiations.

 

##### _Allergy Therapeutics plc (AGY) is a pharmaceutical company. The Company focuses on the treatment and prevention of allergy with aluminum-free products. The Company’s segments are Central Europe, which includes segments, such as Germany, Australia, Switzerland and the Netherlands; Southern Europe, which includes Italy and Spain; the United Kingdom, and Rest of World. _

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