Alliance Pharma shares fall sharply, in part due to macro concerns

Speciality pharmaceutical company Alliance Pharma has this morning announced its pre-close trading update for the year ended on the 31st of December of 2011.

The Board expects to report turnover for 2011 of around £46m and for pre-tax profits to be in line with market expectations.

Furthermore, the company has indicated that sales of Hydromol and ImmuCyst continued to grow well.

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During the year, however, sales of its gastro-resistant tablets Deltacortril, which include the active ingredient prednisolone, "continued to be affected by increased competition and by a shift in the prednisolone market towards uncoated tablets."

Prednisolone is a synthetic steroid with anti-inflammatory effects which is used to decrease inflammation in various different diseases and conditions. Deltacortril sales for 2011 have been reported at £4.7m, of which sales of £1.1m were generated in the second half of the year.

Similarly, the company is cautious regarding the outlook for sales of Nu-Seals in the Republic of Ireland, not so much because of the launch of a generic competitor during autumn 2011 so much as the fact that the Irish government is continuing to look at measures to reduce its medicines bill.

The firm says it is in the process of implementing a number of efficiency measures and other cost saving initiatives. Together with the three acquisitions carried out in 2011 it expects to largely be able to compensate for the impact of the further reduction in sales of Deltacortril and the risks to Nu-Seals.

As of 14:46pm shares of Alliance Pharma are falling 9.4% to the 28.75p mark.

AB