25/10/2006
Clinical trials services counter Synexus, brought to AIM a year ago at 65p, operates a UK network of sites where it sources patients, screens them for suitability, manages them through trials and reports the data back to clients that include GlaxoSmithKline. This model, so the board claims, provides clients with higher quality data and better value for money than the traditional method of using a disparate population of NHS sites.
And in line with its strategy of moving into emerging economies, the company has announced a third AIM acquisition, paying a maximum £1.8m in cash and shares for CRC, a South Africa-based site management organisation whose services include the recruitment and management of patients onto later-stage clinical trials. This acquisition represents a further low-risk move into the growing clinical trial/patient recruitment markets in emerging economies, with Synexus already having sites in Eastern Europe, as well as a joint venture in India.
As well as enhancing earnings, the well-established and profitable CRC broadens Synexus' therapeutic offering the group can provide and also provides access to a large pool of previously untreated patients for trials. As well as its clinical trials business, CRC has a minority stake in a joint venture with South African pharmaceutical group Adcock Ingram.
For the current year to March, analysts are looking for a jump in sales from £9.5m to £12.8m and healthier ‘normalised’ pre-tax profits of £2.3m (£1.4m). Based on 9.7p of earnings, the shares are trading on a modest forward multiple of 9.3, falling to 8.5 based on conservative forecast profits of £3m in the market for 2008. Trading well north of its float price, Synexus also trades on a lower multiple than peers, and we think the shares remain in buy territory.
| Market cap: | £21m |
| PE Forecast: | 9.3 |
| Share price: | 90.5p |
| AIM | 0pm |
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| Other company articles: |
| 13/06/2007 |
| 25/10/2006 |
| 03/02/2006 |
| 01/02/2006 |
| 05/12/2005 |
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