Ergomed PLC (AIM:ERGO, ETR:2EM) is well positioned for medium-term growth, driven by growing demand for Clinical Research Services (CRO) and Pharmacovigilance (PV) services and the company’s focus on niche, higher-growth areas like rare disease and oncology, according to broker Berenberg.
Worries over CRO due to a worsening landscape generally for biotechs have proved unfounded so far, said the broker, with a number of new contract wins in the first half of the current year.
In PV, automation technology will drive improvements in efficiency in the medium term and support margin improvement.
“Given that the PV business is characterised by highly recurring revenues, the continued strong growth should support the business if there is any slowdown in the CRO market," said Berenberg.
Orders grew to £284.5m (up 25% yoy), which provides strong visibility on revenues, it added.
Buy with a 1,450p target price, says the broker.