Godalming, UK-based Sinclair Pharma is shelling out 17.5 million euros for global rights (excluding the UK and Italy) to Belgian drugmaker Solvay Pharmaceuticals’ dermatology products Flammazine and Flammacerium.
Flammazine and Flammacerium creams are approved in more than 45 countries worldwide for the prevention and treatment of infections in burn wounds, and by taking these products under its wing the firm has bought itself access to two well-established brands that generate yearly sales of over £9 million and will help it gain a stronger presence in Europe.
The two brands had been purchased by UK group York Pharma back in 2008, but it was forced to hand back the rights to Solvay after a dispute with its financing company.
Sinclair, which says it plans to pay for Solvay’s products via a round of fundraising of up to £25 million, said the move fits with its plans to become a leading dermatology business and create “a reliable, secure and growing revenue base” to drive profit, and also revealed its intent to up promotion and development of Flammazine and Flammacerium in new indications to further swell sales.
The deal’s announcement came hand-in-hand yesterday morning with news that Sinclair has managed to grow its profits and reduce its operating losses for the year ended June 30, 2009, but its London-traded shares still started on a downward path, perhaps a reflection of initial investor uncertainty over changes at the company’s top-level management.
Preliminary results for the year showed that Sinclair’s earnings before interest tax depreciation and amortisation and special items leapt from £1.3 million to £2.3 million, reflecting organic growth of around 77%.
On the downside, revenues for the year were significantly hit by wholesales de-stocking due to the tough financial climate and so crept up just 0.4% to £30.4 million, but operating losses were still slashed to £300,000 from £800,000 booked for the prior year.
During the past year, the company said it has kicked off an “aggressive” commercialisation strategy and has restructured its operations to “maximise the potential in [its] portfolio”. This has, for example, seen a streamlining of its UK operations, including the closure of its sales arm with distribution in the country now solely through marketing partners.
Sinclair has also created a new role of Chief Operating Officer, which has been taken up by Christophe Foucher, and has united its business development team and operating companies “to form a single division with a common objective”. And in other changes at the top, the group’s chief executive Dr Michael Flynn announced plans to retire at the next AGM following nine years of service. His successor will be Christopher Spooner, previously co-founder and chief executive of healthcare fund HealthCor Management UK.
Positive outlook
Despite a tough operating environment the company remains optimistic in its outlook for future progress. “By adapting our group via a restructuring programme we are now left with a much leaner business and one that is poised to put into action a new, focussed sales and marketing strategy and, in doing so, fully realise the value of our product portfolio”, said chairman Graham Cook.
Furthermore, he added that the “implementation of a clearly focussed commercialisation strategy, underpinned by an agile and efficient business structure, means we are well positioned to drive up product revenues without sacrificing margins”.
