Consort Medical to take £3m hit from delays to Mylan's Wixela inhaler
Drug and delivery device company Consort Medical was under the cosh on Tuesday as it warned that pre-tax profit for the current financial year will take a £3m hit from delays to its generic Advair programme.
In its results for the six months to the end of October, the company said full-year profit would be dented by delays with Mylan's Wixela inhaler, which is the generic version of GlaxoSmithKline's Advair treatment for chronic lung disease.
Consort said delays in the expected approval date of Mylan's Wixela programme combined with their inventory build was expected to significantly reduce their near-term demand for its devices.
Chief executive Jonathan Glenn said: "Whilst the delay in approval of this programme and near-term anticipated negative impact on our business is disappointing, our view of the peak sales opportunity for the product remains unchanged."
Interim pre-tax profit rose 6.1% to £19m, the company reported, reflecting a lower pension finance charge and effective tax rate. However, revenue dipped 0.8% to £152.5m.
The Bespak business saw revenue grow 1.7%, but revenue at the Aesica subsidiary was down 2.4%. Consort said its Syrina/Vapoursoft auto-injector continues to generate "significant" interest although programme SYR075 is currently under review.
The interim dividend was lifted by 2.2% to 7.60p a share.
Shore Capital said it was expecting a negative reaction in the shares given the impact to PBT from the delay to Mylan’s programme, the uncertainty around progress within the Syrina/Vapoursoft programme (SYR075) and revenue weakness in Aesica, which has previously been an area of focus.
"We will now review our forecasts following the results which will need to be amended for lower profit expectations for FY2019F and potentially a reduced pace of margin expansion within Aesica.
"We would expect to be lowering our forecasts overall based upon today’s interim results. Prior to any updates, our most recent (August 2018) model update gave a fair value of 1,215p (having previously been at 1,255p)."
At 1050 GMT, the shares were down 21% to 779p.