Clinigen Group PLC

AIM billionaire Clinigen is still growing at a rate of knots


  • One of only a few billion-pound AIM companies

  • Market leader

  • Estimated US$7.5bn-US$12.5bn per annum opportunity

  • Set for 30%+ profit jump

tablets and pills

Quick facts: Clinigen Group PLC

Price: £8.80

Market: AIM
Market Cap: £1.17 billion

The business has transformed over the last 12 months through a combination of substantial corporate and product acquisitions, investment in infrastructure and underlying growth.

Shaun Chilton, chief executive


What it does

Clinigen Group PLC (LON:CLIN) is a billion-pound specialty pharma and services group.

Having listed on London’s junior market back in 2012 with a market cap of just £123mln, it is now the market leader in the supply of drugs for clinical trials and the distribution of unlicensed pharmaceuticals.

In terms of unlicensed pharmaceuticals, Clinigen’s Global Access division sources medicines for pharmacists where supply isn’t necessarily straightforward.

It counts most of the world’s top 25 pharma companies as its customers and has exclusive supply arrangements for more than 100 drugs.

Clinigen doesn’t just ferry other companies’ drugs around the globe, it also uses that supply chain to sell specialty drugs which it has acquired along the way.

In recent years it has spent tens of millions building up its portfolio, which includes a cancer drug formerly owned Novartis and the global rights to Horizon Pharma’s rare disease therapy, Imukin.


How it is doing

Clinigen expects profits to have soared by more than a third when it reports its full-year results in September, driven by better-than-expected performances from two of its new drugs.

In a pre-close trading update, the AIM company, which sources and supplies medicines to doctors and pharmaceutical companies, said revenues for the year ended 30 June should have risen by at least 19%.

Gross profit is expected to have jumped by 30%, while underlying profit growth is forecast to have been even stronger. Earnings per share is expected to have increased by at least 15%.

Cash generation “remains strong” with net debt at the end of June falling below £225mln.

Bosses said the “strong growth” has been driven primarily by acquisitions, with two of its largest deals last year proving to be the best.

Back in September, Clinigen agreed to fork out up to US$240mln for CSM Parent – a specialist provider of packaging, labelling, warehousing and distribution services, which has helped the company to provide an end-to-end solution “increasingly required by customers”.

A few months later, Clinigen struck a deal worth up to US$210mln to buy the US rights to cancer drug Proleukin from Swiss giant Novartis. It had already acquired the rest of world rights last summer.


What the boss says

"We have continued to execute our strategy with the recent acquisitions strengthening our offering and capabilities as well as diversifying our portfolio of businesses and products,” said chief executive Shaun Chilton.

“The expansion of our geographical footprint by building on our existing commercial infrastructure in the US and EU will provide notable benefit to all our businesses.

He added: “Financially we have delivered a strong performance, driven by our acquisitions and we remain highly cash generative - one of our main business KPIs.

“The group is well positioned to develop the business as well as drive organic growth over the medium term.”


Inflection points

The full set of annual results are due out in September. Further ahead, analysts think there is plenty of white space for the company to grow into.

Although it specialises in two little-known niches in the pharmaceutical supply chain - the supply of drugs for clinical trials and the distribution of unlicensed pharmaceuticals – analysts at Berenberg think those two markets represent a US$7.5bn-US$12.5bn per annum opportunity.

Peel Hunt is also bullish on the long-term opportunity, which it cites as a key reason for its ‘buy’ recommendation.

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on 19/7/19

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