Companies: SPH   

Drug development backer Sinclair Pharma, which lost £2.6 million last year, is scouting acquisitions after a series of product approvals.

AIM-quoted Sinclair focuses on niche products and increased turnover 174 per cent in the year to June. However, while the Surrey-based company lost £2.1 million in the first six months of the year, it reached operating breakeven during the second half-year.

Chief executive Dr Michael Flynn points to approvals received from the US Food & Drugs Administration for Aloclair gel and mouth sprays for mouth ulcers and Decapinol for gingivitis (associated with bleeding gums, rotting teeth and bad breath). The European Union approved Alogon for sore throats, Sebclair for seborrheic dermatitis (flaky skin) and Decapinol and Sinclair made filings with the FDA for Sebclair and Alogon.

Aloclair has now been launched in the USA, along with Atopiclair, for types of dermatitis. The company is keen to boost margins by moving from licensing deals to more lucrative forms of distribution. It acquired Euroderm in Italy, now renamed Sinclair Srl, with a significant direct sales force, and has today announced a co-promotion deal for Atopiclear with the Italian arm of German pharmaceutical group Madaus.

Sinclair, which sported year-end cash down from £7.8 million to £4.9 million, is on the look-out for further suitable acquisitions and does not rule out issuing shares or coming to the market for the right one. At 116.5, down from February 2004's high of 157.5p, the shares should stage a recovery when the benefits of its drug deals begin to show through.