Allergy Therapeutics PLC (LON:AGY) blew higher on Thursday after the vaccines maker revealed full-year earnings will be ahead of forecasts.
There was more good news for investors, who were also told that the AIM company has received a multi-million-dollar settlement over a botched clinical trial back in 2016.
Allergy, which makes treatments for various allergies including hay fever and dust mites, took Inflamax Research to court over “inadequate procedures” during the phase II trial of its grass pollen vaccine.
READ: Allergy reports positive results from early-stage study of dust mite jab
The cock-up meant results from the study were “inconclusive”, and Allergy had to wait until last summer before getting its treatment through the mid-stage mark.
Inflamax has now paid Allergy US$7.6mln for its role in the unsuccessful trial.
“Allergy has always had full confidence in the Grass MATA MPL product and maintained that the inconclusive results of the G204 study were due to the inadequate procedures in the study,” said chief executive Manuel Llobet.
“I am pleased that Inflamax have now compensated Allergy for a significant proportion of the wasted study costs, as well as agreeing to pay the majority of the legal costs.”
Tight cost control lifts bottom line
In a second statement, Allergy confirmed full-year earnings will be better than first thought.
Net sales are likely to be as expected and show “good growth” in Europe, especially in Spain, as demand for its suite of vaccines grows.
The bottom-line boost is to come through tight cost control and lower-than-anticipated research and development costs, which should be below £14mln.
“Allergy has continued to perform strongly this year, combining good sales performance with strong cost control, resulting in earnings ahead of market expectations for the full year,” said CEO Llobet.
“With the announcement today of a successful litigation result in relation to the Grass MATA MPL Phase II trial in challenge chambers, our cash position has been further boosted.”
Shares were up 6.4% to 14.1p on Thursday morning.