Following the company’s full year results and meeting the company’s management, London based stockbroker Charles Stanley said that ECO Animal Health (AIM: EAH) (ECO) is likely to increase revenues in the current year. According to the broker, the company’s growth rate could also accelerate over the following two years as new drug registrations are obtained.
The stockbroker said the US registration for the Aivlosin (AIV) antibiotic for pigs and poultry will be particularly influential. Registration is expected in the 2010 calendar year and have its first impact on revenues in the financial year to March 2011. Charles Stanley said that several other significant issues arose from the FY results and its meeting, with the rapidly growing distribution venues of particular note. Further to its expansion in developing economies outside the US, ECO has also established distributors in the EU ahead of the main selling season, which should increase current year revenues.
According to Charles Stanley, ECO’s ongoing research programme into AIV’s potential application to treat viral infections may change the group beyond recognition within a couple of years. AIV’s potential applications could include treatments for porcine reproductive and respiratory syndrome (PRR), Influenza, Hepatitis C, Ebola, SARS CoV and Coxsackie B3 and B5.
While ECO's current market capitalisation is not in tune with current profitability, AIV has substantial longer term potential and could be huge, the broker said.