# Sinclair Pharma Demand growing in target markets

- Link: https://www.directorstalkinterviews.com/sinclair-pharma-demand-growing-target-markets/412737216
- Published: 2017-10-02T07:48:37+01:00
- Author: Giles Arbor

[⌊Hardman & Co Report Report Downloads⌉⌊Hardman & Co Report Report Downloads⌉[In 2016 **Sinclair
Pharma Plc** (LON:SPH) was transformed into a streamlined, pure-play aesthetics 
company with a concentrated, competitive portfolio of differentiated injectable 
products. Effective, longer-lasting, natural looking, minimally invasive treatments
are benefiting from trends away from intensive plastic surgery and represent a major
growth opportunity. Strong Silhouette sales in the US and Brazil, and declining 
Sculptra sales are pushing gross margins >70%. Demand in Brazil, the US, and China
is set to deliver major value following approvals in the near- and mid-term. In 
market US demand has lifted InstaLift sales to $2.9m/£2.3m.

**Strategy:** Sinclair operates in the aesthetics market with a focused portfolio
of products for natural-looking and minimally-invasive treatments. It sells directly
in Europe and Brazil and uses distributors elsewhere, including the US. It will 
be launching/re-launching principal products in new territories in coming years.

**Sales:** Underlying (CER) sales growth for the interim period was a solid +6% 
to £20.1m (£17.3m), affected by some unusual buying patterns from some overseas 
distributors, e.g. South Korea, that did not reflect in-market demand. Net cash 
at the period end was £0.1m (31st Dec 2016: £16.8m).

**InstaLift:** Following training of further US physicians towards a planned 1000
in 2017, demand from ThermiGen has been better than expected, with ex-factory sales
reaching $2.9m/£2.3m compared to $2.0m forecast. Contributed to the gross margin
improvement to 72.4% (70.5%). Full year sales forecast is $5.5m.

**Refine**: Rights to the suture-based product for lifting heavy tissue were acquired
in June 2017 for a full consideration of up to $11.3m. The product is patent protected
and FDA approved, with the intention to target the growing breast lift market in
the US, then expanding to other body aesthetics and geographies.

**Investment summary:** Strong in-market demand for Sinclair Pharma plc leading 
products shows the benefits of running a more streamlined business. Key will be 
the performance of Silhouette InstaLift in the US which is gaining sales traction.
Even with very conservative expectations for InstaLift sales, Sinclair remains on
target to deliver an EBITDA profit in 2017 and overall profitability in 2018. The
risk/reward profile is looking increasingly favourable.

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