Circassia Pharmaceuticals PLC (LON:CIR) said its cost containment efforts were showing results as it gave an upbeat assessment of the company’s growth prospects and provided revenue guidance for the 12 months just gone.
Ahead of a meeting to approve its move to AIM, the speciality pharma, which is focused on respiratory disease, told shareholders it had a healthy cash cushion of £41mln. At the meeting, 100% of the shareholders voting approved the switch to AIM.
However, keeping a lid on expenditure meant the net cash outflow was less than £20mln last year. Turnover, meanwhile, was in the order of £48mln-£52mln.
While the assessment of the prospects for 2019 remained unchanged, Circassia said it saw “significant opportunities for strong sales growth”.
Drivers will include Tudorza, the inhaler for chronic lung disease, after it added the full US rights to the drug, and China, where the business now has a direct sales operation.
The company hopes to have regulatory sign-off for Duaklir by the end of the first quarter, which would become part of a product set sold by a team focused solely on treatments for chronic obstructive pulmonary disease (COPD).
"Circassia continued to make progress during 2018, and with our cost containment efforts showing results and revenues growing we look forward to continuing our trajectory towards self-sustainability,” said chief executive Steve Harris.
“We look forward to the coming year, as we roll out our expanded sales force in China and plan to take full control of Tudorza and launch Duaklir, once approved, in the United States."
As followers of the group already know, it must make option and deferred payments totalling £95mln (US$120mln). It said plans to pay the sums via “third-party funding, or through a loan facility provided by AstraZeneca under the companies' agreement if this is unavailable”.
In a note to clients, analysts at Peel Hunt commented: "Today’s top line disappointment is backward-looking; the balance sheet is robust and the upbeat outlook and March FDA catalysts suggest strong value remains."
However, the City broker still placed its estimates and target price and rating for Circassia to 'under review', from 'buy', pending further interaction with the company.
In afternoon trading, Circassia shares were 12.7% lower at 48.20p.
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