Galen Holdings, the Belfast pharmaceutical company, which is in reverse takeover talks, is looking for further strong growth following the publication of better-than-expected interim results.
Pre-tax profit, before exceptional items, increased by 39 per cent to £7.5 million sterling in the six months to March 31st, 1998. Earnings per share grew by 25 per cent to 4.64p while the interim dividend is 20 per cent higher at 0.44p.
Chairman, Dr Allen McClay, in an interim statement, noted the company was well placed to continue to grow in the second half. "The underlying markets in which we operate remain strong and the initiatives we have taken will continue to drive the business forward," he said.
If the trend continues, the final results will top brokers' forecasts. Profits should exceed £15 million which would be well up on the £11.4 million generated last year.
Dealings in Galen's shares were suspended on Tuesday following the takeover talks with the much larger Ferring Pharmaceuticals, a privately-owned Dutch pharmaceutical company, and the shares will remain suspended until the end of the year.
Ferring, an international group with outlets in many countries, has a presence in Ireland through Ferring Ireland which generates sales of £1 million and employs six people. Its most important product is pentasa which is used for inflammatory bowel conditions.
The latest Galen results show a 24 per cent rise in sales to £24.1 million. There was strong growth in its two divisions - Ethical Pharmaceutical Products (EPP), which saw a 12 per cent increase to £16.5 million and Ethical Pharmaceutical Services (EPS), where sales grew by 58 per cent to £7.6 million.
While EPP's major promoted products continued to grow, it withdrew from the commodity intravenous fluid market in Britain because it is a low-margin business. This move will allow manufacturing capacity to be used for higher-margin activities, such as speciality manufacturing projects, the interim statement said. It continues to invest in a range of products offered by its core pharmaceuticals business.
The sales growth in EPS reflected the strong rise in the core clinical trials services (CTS) business in Europe, the further development of CTS in Philadelphia and the performance of QuChem Ltd. Growth is expected to be boosted by the transfer of CTS operations to a new facility at Craigavon, Co Armagh and a full year's contribution from a new facility at Audubon, Pennsylvania. Galen sees significant growth from CTS.
QuChem, which provides a specialist chemical synthesis service to the pharmaceutical industry, made a stronger-than-expected contribution in the first half. A refurbishment programme will increase capacity. Galen said the development of its transmucosal intravaginal ring (IVR) drug delivery system for hormone replacement therapy continued. "This project represents a cornerstone in the international expansion of our products business."
