Update on CMA investigation
For immediate release
2 September 2022
ALLIANCE PHARMA PLC
("Alliance" or the "Group")
Update on CMA investigation
Alliance Pharma plc (AIM: APH), the international healthcare group, today provides a further update on the Competition and Markets Authority ("CMA") investigation which Alliance has now appealed against.
The CMA has today announced that it intends to seek a competition disqualification order ("CDO") against a total of seven directors from all four companies, including Mr. Peter Butterfield (Chief Executive Officer of Alliance). Whilst this action is in line with the CMA's stated policy to consider CDOs in all cases where the CMA has found an infringement, the Company is very disappointed, in light of the facts, with the CMA's decision to take such action against Mr. Butterfield.
The CDO is a separate legal procedure and will only be heard by the High Courts if the Competition Appeal Tribunal ("CAT") upholds the CMA's findings against Alliance. The date of this appeal has yet to be set but is currently expected to take place sometime in late H1 of 2023.
Alliance fundamentally disagrees with the CMA's actions, both in relation to the findings against the Company and in applying for a CDO against Mr. Butterfield. Alliance reiterates that it did not participate in, or profit from, any market sharing arrangement and refutes any involvement by the Company or Mr. Butterfield, who retains the full confidence and support of the Board as CEO, continuing to lead the business to deliver the long-term strategy of the Group.
Alliance takes compliance with competition law very seriously and fully assisted the CMA in its investigation. Alliance has robust procedures in place and a Group-wide commitment to upholding the highest standards of conduct.
David Cook, Chair of Alliance Pharma, said: "The Board disagrees and is disappointed with the CMA's actions against Peter. Peter has been on the board since 2010, and was appointed CEO in May 2018. He has been instrumental in helping Alliance to deliver on its growth plans and successfully drive the business forward. He has our full support."
Further announcements will be made as appropriate.
On 23 May 2019 Alliance announced that the CMA had issued a Statement of Objections to four companies, including Alliance, alleging anti-competitive agreements in relation to the sale of prescription prochlorperazine, a small, out-licensed product in Alliance's pharmaceutical portfolio from June 2013 until July 2018. The announcement can be viewed at this link: https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=3618902&lang=en-GB&companycode=uk-aph&v=.
Alliance out-licensed prochlorperazine to a distributor in 2013 in return for an agreed fixed transfer price. Since that time Alliance has had no involvement or control over, and did not benefit from, the in-market pricing of the product, which is entirely managed by the distributor. Alliance recorded peak revenues of prochlorperazine in 2015 of £1.9m and revenues in 2021 were £0.7m representing circa 0.4% of the Group's turnover for 2021. The CMA's decision does not concern any other product in Alliance's portfolio.
On 3 February 2022 the CMA issued its finding that all four companies had infringed competition law and imposed fines including £7.9m for Alliance, which was provided for in the 2021 accounts (https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=4038435&lang=en-GB&companycode=uk-aph&v=). Alliance filed its appeal with the CAT on 4 April 2022.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR.
For further information:
Alliance Pharma plc
+ 44 (0)1249 466966
Andrew Franklin, Chief Financial Officer
Cora McCallum, Head of Investor Relations & Corporate Communications
FTI Consulting (media enquiries)
+ 44 (0)20 3727 1000
Ben Atwell / Julia Bradshaw / Rob Winder
Numis Securities Limited
+ 44 (0)20 7260 1000
Nominated Adviser: Freddie Barnfield / Duncan Monteith
Corporate Broking: James Black
Investec Bank plc
+ 44 (0)20 7597 5970
Corporate Finance: Daniel Adams
Corporate Broking: Patrick Robb
Alliance Pharma plc (AIM: APH) is an international healthcare group. Our purpose is to improve the lives of consumers and patients through making available a range of clinically valuable healthcare products.
Our core focus is on the marketing of Consumer Healthcare brands, complemented by a smaller Prescription Medicines business. In total, we hold marketing rights to around 80 brands, with revenues generated from a mix of direct, distributor and e-commerce sales.
Headquartered in the UK, the Group employs around 250 people based in locations across Europe, North America, and the Asia Pacific region. By outsourcing our manufacturing and logistics operations, we remain asset-light and focused on maximising the value of our brands.
For more information on Alliance, please visit our website: www.alliancepharmaceuticals.com