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Alliance Pharma gets boost as morning sickness drug gets UK regulatory green light

Chief executive Peter Butterfield said: "We are delighted by this news and look forward to launching Diclectin later this year."
Child hugs pregnant woman
Diclectin has been used in Canada for the last 40 years as the standard of care for morning sickness having been prescribed to more than 30mln sufferers

Alliance Pharma plc (LON:APH) has received a boost with the news that an important drug in its portfolio has received UK regulatory sign-off.

The Medicines and Healthcare products Regulatory Agency (MHRA) and the Commission on Human Medicines (CHM) have given market authorisation to Diclectinfor women suffering nausea and vomiting during pregnancy.

Developed by Duchesnay Inc, Alliance acquired the UK rights to the product in 2015.

Standard of care in Canada

Diclectin has been used in Canada for the last 40 years as the standard of care for morning sickness having been prescribed to more than 30mln sufferers.

So it came as surprise and setback when the UK drugs watchdog initially knocked back the application and it has taken almost a year to resolve certain unnamed "issues" flagged by the MHRA.

Chief executive Peter Butterfield said: "We are delighted by this news and look forward to launching Diclectin later this year. 

"There are currently no licenced treatments for nausea and vomiting of pregnancy in the UK, highlighting a clear unmet need for patients and clinicians

"For Alliance, Diclectin represents a sizeable mid-term opportunity and also allows us to further leverage our European footprint."

Fourth international drug

The company has grown via a series of well-judged acquisitions and Alliance owns around 90 pharmaceutical and healthcare products and sells into over 100 countries.

In that portfolio, it has what it calls ‘local hero’ lines, which sell well in a particular territory or country.

The crown jewels are its ‘global stars’, which are managed and marketed centrally and, as the name suggests, are sold internationally.

The approval of Diclectin, for which Alliance also hold the European rights, adds a fourth international drug to the company’s portfolio.

The other three are Vamousse, a head lice treatment, Kelo-cote, a scar reduction product and MacuShield, a supplement recommended by eye experts.

Business doing well 

In an update last month, Alliance said it was seeing "good growth" from Kelo-cote, while its two most recent acquisitions, Vamousse and Ametop, an anaesthetic gel, were performing in line with expectations.
Financially, it said it continued to generate good cash flow, which in turn was helping reduce net debt.

The shares rose 5.6% to 95p, valuing the business at £452mln. Numis repeated its ‘add’ recommendation an 99p price target.

Analyst Sally Taylor called the Diclectin announcement "positive news".

"We expect the shares to respond favourably as Alliance adds a fourth international growth brand to its portfolio and plans to leverage its expanded international platform.” the Numis number cruncher added. 



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