Sinclair Pharma maintains EBITDA guidance as operational efficiencies offset lower sales

Specialist pharmaceutical company, Sinclair Pharma (AIM: SPH) released a trading update this morning for the full year ended 30 June 2009. In the statement, the company maintained its EBITDA (earnings before interest, tax, depreciation and amortisation), thanks to a string of operational efficiency initiatives and prudent cash management which offset lower revenues.

Sinclair Pharma reported that it had witnessed de-stocking by wholesalers, which in turn impacted orders for its products – hence the lower than expected revenues of £29.7 million for the full year.

Despite the setback in sales, the specialty pharma company noted that while wholesalers had run down their inventories, sales would pick up again, and would be for smaller, but more frequent orders.

“During the 2009 financial year, Sinclair's management team has taken decisive and proactive steps to restructure and streamline the business, enabling it to reduce costs while increasing the depth of management expertise,” the company added.

Sinclair also confirmed that it is continuing to work with OraPharma in the United States towards the launch of Decapinol – a biofilm application. OraPharma has made a payment of US$235,000 to Sinclair following validation of the Italian manufacturing site.

"We believe our business presents several significant opportunities for ongoing growth. While revenues generated from licensing fees have off-set the effects of de-stocking to some extent, our short-term goal remains to achieve sustainable profitability based on recurring product revenues,” Michael Flynn, CEO of Sinclair Pharma, said. "Our substantial product portfolio and pipeline provides significant potential to support us in achieving this goal with initial data for FY2010 indicating that underlying sales growth is now returning to previous trends. In addition, we have taken decisive steps over the past year to ensure our organisation is streamlined, agile and aggressively focused on driving product revenues, without sacrificing margins."

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