Alliance Pharma sees solid sales ahead of ImmuCyst return

-- adds broker comment -- Alliance Pharma (LON:APH) grew revenues by 6.5% in its latest half-year as sales of anti-eczema cream Hydromol continued to push ahead. The company specialises in acquiring prescription products seen as mature or too small by the major pharma groups and reported sales in the half year to June were £22.8m against (£21.4mln). Hydromol’s sales rose 10% to £3.3mln despite a lower rebate for sales to the NHS under the Pharmaceutical Price Regulation Scheme (PPRS) designed to cap the Health Service’s bill for patented medicines. February acquisition MacuShield, a specialist eye treatment, performed as expected. The remainder of the year will also see a contribution from bladder cancer treatment ImmuCyst after a three-year absence due to production problems at supplier Sanofi. At its peak, ImmuCyst was generating annual revenues of £4mln for Alliance, though a rival has taken advantage of its absence and the amount of the treatment that is available will depend on how fast Sanofi ramps up production again. The hunt for more acquisition continues but overall was confident on the outlook for the second half. Canaccord commented Alliance remains in a stronger position than in recent years, with a better balanced portfolio and the potential for upside from both the relaunch of ImmuCyst and recent acquisition MacuShield. However, the shares have rallied strongly and are now looking fairly valued. Hold with a target price of 40p. Numis adds that MacuShield’, the most recently acquired product, is also performing in line. Sales should ramp up in the second half as Alliance’s marketing kicks and geographically. Finding good value assets may be a challenge given the rise in the pharmaceutical and consumer sectors. Alliance Pharma trades on trades on 12.9 times 2016 earnings. Add with a target price of 48.2p said Numis. Shares were 44.6p today.