Continuing to gain market share

AGY is a long-established specialist in the prevention, diagnosis and treatment of allergies. Pollinex Quattro continues to gain market share despite being available in the EU only on a ‘Named Patient’ basis. Investment in marketing over the last three years has been reflected in exceptional growth, with +10% CAGR in sales over the last five years compared to overall allergy vaccine market growth of +1%. In fiscal 2017, AGY gained another one-point market share to 13%. R&D investment in clinical trials for full approval as a biological in both Europe and the US are progressing with results due to be released in the second half of calendar 2018.

• Strategy: AGY is a fully integrated pharmaceutical company focused on the treatment of allergies. There are three parts to its strategy: continued development of its European business via investment or opportunistic acquisitions; the US PQ opportunity; and further development of its pipeline.
• 2017 results: Publication of full details reinforced the strong performance indicted in the July trading statement. Underlying sales grew +15% to £64.1m (£48.5m), gross margins improved to 73.9% (71.0%), and product profitability rose +44% to £20.5m (£14.2m). R&D investment was lower at -£9.3m (-£16.2m).
• Trial update: The PQ Grass/MATA MPL safety study for a new higher dose has been completed, enabling the Phase II trial to start in the next quarter. The PQ Birch phase III field trial required for regulatory filings has started recruiting in Europe. Both trials are expected to report by the end of calendar2018.
• Regulation: Both the EU (via TAV) and US (via FDA) regulators are looking to instil more control in their respective markets with improved regulation. AGY is as well placed as anybody to reap the benefits of this, being one of the most advanced in terms of trials, which augurs well for future growth prospects.
• Investment summary: AGY is going through an exciting period, with a clear vision, gaining market share from competitors, and leading the race to have its products fully approved and regulated as biologicals, first in Europe, then in the US, where the regulators are demanding change. Read-out from the EU Phase III PQ Birch trial in 2018 will provide a significant value inflexion point.