Alliance Pharma

Alliance Pharma says 2009’s profits should show growth of at least 250% to breach £8.5m pre-tax – before potential impairment charges.

The Chippenham-based speciality drugs concern, with products for skin conditions, childbirth, Parkinson’s disease and a range of other conditions, says it expects turnover for last year to be up some 42% to around £31m, helped by strong trading in the last few months. But AIM-quoted Alliance, steered by chief executive John Dawson, adds its present policy of restricting investment in development products might involve an impairment charge on Isprelor, its labour-inducing product.

The company has decided not to continue with clinical trials of Isprelor ‘without third party support’. With Isprelor’s development costs carried in its books at a value of £2.8m, Alliance says it will assess its balance sheet in preparing its full year results ‘to see whether any impairment should be recognised’.

Apart from that concern, Alliance, which has made a success of acquiring the rights to 37 ‘established niche’ pharmaceutical brands, will significantly exceed market expectations if it turns in pre-tax profits of £8.5m or more, against £2.4m in 2008. The shares, recommended by Growth Company Investor a year ago at 4.38p, have risen more than six-fold to 27.75p.

Partial profit taking might be prudent, while retaining some for potential future growth.