Dechra® Pharmaceuticals PLC (Dechra or the Group) : Trading Update

LONDON, January 14, 2016 /PRNewswire/ --

The Board of Dechra Pharmaceuticals PLC (LSE:DPH), issues the following unaudited Trading Update ahead of the Group's half-year financial results for the period ended 31 December 2015, which will be announced on Monday, 22 February 2016.

Highlights 

• Trading in our first half was strong with Group revenue growth, including Genera, of approximately 15% at Constant Exchange Rate (CER) (10% at Actual Exchange Rate (AER)). Excluding Genera, revenue growth was 11% at CER (7% at AER).
• Revenue growth in EU Pharmaceuticals, excluding Genera, remains solid at 4% at CER but continues to be impacted by exchange rate headwinds (3% decline at AER).
• North America's strong performance continues with revenue growth of 51% at CER (57% at AER).
• Zycortal^®, a novel canine endocrine product for the treatment of Addison's disease, has now received approval in both the EU and the USA.
• The integration of Genera, acquired in October 2015, is on track.
• On 13 January 2016, we acquired 100% of the share capital of Laboratorios Brovel SA de CV, a veterinary pharmaceuticals company based in Mexico City, for a consideration of up to US$6 million.
• Following the Genera acquisition, together with the investment in the US expansion, we expect to report a net debt balance as at 31 December 2015.

Ian Page, CEO, commented:

"This is an exciting time for Dechra as we continue to grow organically, launch new products and move into new territories through acquisitions. As a result of our focus on and execution of our strategy, we are delivering a strong first half performance. With Group trading in line with management expectations for the 2016 financial year, we remain confident in our future prospects." 

Operational review 

European Pharmaceuticals 

In the first half, our European Pharmaceuticals Segment increased revenues by approximately 4% at CER (decline of circa 3% at AER) compared to the same period last year. Including Genera, the period-on-period growth was approximately 9% at CER.

This growth was driven by Companion Animal Products (CAP) which increased by 4% (at CER). Whilst the German market continues to experience challenges, the performance in the Food producing Animal Products (FAP) has improved (increase of 7% at CER) due to growth in markets targeted for expansion and good trading in Poland. We are seeing signs of recovery in several markets in Diets; however, overall sales declined by 3% (at CER).

North American Pharmaceuticals 

Total reported North American revenue increased by approximately 51% at CER on the same period last year (57% at AER) as our dermatology, endocrinology and ophthalmic ranges started the year strongly.

The momentum in the USA is being maintained as we continue to invest in our sales, marketing and technical support. Canada, which only started trading in the second half of our 2015 financial year, also contributed to the period-on-period growth.

Pipeline Delivery 

The pipeline progress has been satisfactory:

• We received FDA approval in the USA in December 2015 for Zycortal, a novel canine endocrine product for the treatment of Addison's disease. As reported previously, EU approval was granted in September 2015 and the launch is expected during the last quarter of this financial year.
• Two FAP antibiotics, Solupen^® (a narrow spectrum antibiotic) and Solamocta^® (indicated for ducks and turkeys), were approved in the EU in the last quarter of 2015.
• We terminated an early-stage project for canine ophthalmology following inconclusive results during the feasibility studies.

Geographic expansion 

As mentioned earlier, our new subsidiary in Poland is performing well and exceeding expectations. A subsidiary has been established in Austria and commenced trading in January 2016.

Acquisitions 

Since 21 October 2015, Dechra has owned 92.26% of the voting rights (83.99% of the share capital) of Genera. The acquisition cost of €36.6 million was funded from our existing cash and debt facilities. We are making good progress implementing our future plans for the business.

On 13 January 2016, Dechra acquired 100% of the share capital of Laboratorios Brovel SA de CV (Brovel), a veterinary pharmaceuticals company based in Mexico City. The Group paid US$5 million consideration in cash on completion and a further US$1 million is contingent upon Brovel successfully reaching registration milestones for Dechra's products in Mexico.

Brovel is a family-owned business with more than 52 years' experience in the production and distribution of pharmaceutical veterinary products. It has a diverse product portfolio with a turnover of MxP$ 66.2 million (£2.6 million). The Board believes this acquisition will help open the significant Mexican animal health market to Dechra as well as the potential to access other Latin American markets in the future. The initial focus will be to achieve registration of several existing Dechra products in this market.

About Dechra 

For more information please visit: http://www.dechra.com

Trademarks 

Dechra and the Dechra "D" logo are registered trademarks of Dechra Pharmaceuticals PLC.

Enquiries:

Dechra Pharmaceuticals PLC

Ian Page, Chief Executive Officer

Anne-Francoise Nesmes, Chief Financial Officer
e-mail: corporate.enquiries@dechra.com
Office:  +44(0)1606-814-730

TooleyStreet Communications Ltd

Fiona Tooley, Director
e-mail: fiona@tooleystreet.com
Mobile: +44(0)7785-703-523