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Press Release

Trading Update for the 6 months to 30 June 2018

Sinclair Pharma
Posted on: 05 Jul 18

18% constant currency revenue growth ex-US

 

Silhouette Instalift®£0.8 million revenue (April-June) from new US sales force

 

London, 5 July 2018 Sinclair Pharma plc (AIM:SPH.L) ("Sinclair" or the "Group"), the international aesthetics company, announces an unaudited trading update for the six months ended 30 June 2018.

Unaudited sales for the six months ended 30 June 2018 were £21.3 million, (£21.6 million at constant currency) compared with sales of £20.1 million for the same period in 2017, representing headline growth of 6.0%.  Performance of the Group’s ex-US business has been encouraging with sales of £20.5 million in the first six months (2017: £17.6 million) representing actual growth of 16.5% and 18.0% on a constant currency basis.

 

Silhouette Soft® sales reached £7.9 million in the period, compared with £7.3 million in H1 2017, being reported growth of 8.2% and a constant currency growth rate of 12.0%. Growth has been strong in a number of regions, in particular South Korea, South East Asia and the UK which is now benefitting from the restructuring undertaken in 2017. Inceasing adoption of new techniques involving more sutures per procedure is driving sales growth in many of our markets and this trend is expected to continue as Sinclair’s Practice Development Programme is rolled out to physicians and clinics.

 

Silhouette Instalift® In April, Sinclair announced the creation its own direct sales operation in the US following the termination of the distribution agreement with ThermiGen. While it is still early days there are encouraging signs with sales between April and 30 June 2018 reaching £0.8 million, which was ahead of management’s expectations.  This performance reaffirms our belief that the US is a major market opportunity for Silhouette Instalift®, and that the product’s reputation remains highly positive among both using physicians and patients.  Sinclair’s initial launch strategy has focused on connecting with existing customers and reconnecting with physicians already trained but poorly followed-up by the previous commercial team.  In addition, there has been considerable US congress activity through our established KOL network. Our ambition to grow the salesforce steadily is on track with 10 reps now directly employed, and we expect to build to 15 reps by the end of the year. The Board reiterates its £3.0 million US sales guidance (on a constant currency basis) for the financial year.

 

Ellansé® delivered revenues of £5.0 million, compared to £4.2 million during the same period last year, representing actual growth of 19.0% (20.2% on a constant currency basis).  Growth remains broad based across Sinclair’s direct operations as well as distributor markets, most notably in Brazil where the product has performed strongly following launch in March 2018, and provides a key growth opportunity for the second half and beyond. The fast uptake by doctors and evident enthusiasm for the product is highly encouraging and we are well placed to take advantage with our largest sales force based in this market.  Elsewhere, UK growth was notably strong, while in South Korea the market is now largely free from our ex distributor’s inventory which we expect will lead to a much stronger performance  in the second half.

 

Perfectha® revenues increased 7.1% to £4.5 million against £4.2 million in H1 2017 (8.7% growth on a constant currency basis). Growth was driven by the brand’s re-launch in Brazil, as well as notably strong partner performances in South Korea and Mexico.

 

Sculptra® revenues were £3.1 million compared with £2.0 million in the prior year with the pickup in demand seen in the second half of 2017 continuing into H1 2018.

 

Net debt at 30 June 2018 was £14.8 million (including the £3.6 million EW Healthcare convertible loan announced in February 2018) and in line with the Board’s expectations. In addition to anticipated operating cash outflows in the first six months, cash outflows in the period included a number of largely non-recurring costs totalling £8.5 million, including the payments made in connection with the termination of the ThermiGen distribution agreement, final settlement of the Alliance Pharma warranty claim, payment of Silhouette and Perfectha deferred considerations, financing fees and planned capital expenditure. The Group has drawn an initial €17 million under the Hayfin debt facility, which was put in place during the period, and has access to a further €6 million of undrawn facilities.  As previously indicated we expect sales to be second half weighted to a similar degree as in 2017.  A significantly lower level of non-operating cash outflows is also expected in the second half of the current financial year.

 

Chris Spooner, CEO, commented: ”Our first half performance clearly shows that the year is progressing well. Momentum in our ex-US business remains strong with 18% constant currency growth leaving Sinclair well placed to deliver at least mid-teens growth at constant currency for 2018, being the guidance we provided at the time of our full year results.  In the US, I am pleased with the early progress of our new sales team and am optimistic that they will deliver excellent results. US physicians’ feedback remains very positive and we are confident that the Silhouette InstaLift® brand in the eyes of both physicians and patients remains strong in the US. We continue to expand our direct operations in countries where we see strong growth potential and I am pleased to confirm that Sinclair will start a direct operation in Mexico later this month.

 

As in 2017 we expect to see sales weighted to the second half of the year, in particular due to the issues experienced with Silhouette InstaLift®in the US, the Brazilian launch of Ellansé® in March, repatriation of Ellansé® rights in Korea during H1 and the imminent launch of the Mexican operation. We remain very optimistic that we will see strong and broad based growth over the second half of 2018. ”

Sinclair expects to publish interim results for the 6 month period ended 30 June 2018 in September 2018.

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Mike Wood
PharmiWeb.com
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Last updated on: 05/07/2018

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