The Investment Column: Galen
Friday 21 May 1999
Although Galen's business is dominated by the supply to other pharmaceuticals companies of services for clinical trials, it also has new products ready for next year. Its prospects depend on keeping its edge in trial services and demand for its new products.
Yesterday's results justified the recovery in its shares from 360p to 542.5p. After a 59 per cent hike in clinical trial services turnover to pounds 12.1m, first-half group sales jumped 29 per cent to pounds 31m. Pre-tax profits soared 26 per cent to pounds 9.5m.
Galen's task is to sustain this growth in the services market, but it's not obvious that it has distinctive abilities. The competition is hotting up. Long-term sales growth for the products division, which makes analgesics and antibiotics, is not guaranteed either. Sales grew by 15 per cent in the half year but Galen expects sales to take off as it attacks the pounds 2.5bn global hormone replacement therapy market with an intravaginal ring, an alternative way of delivering hormone replacement therapy to pills and skin patches.
Galen is confident of finding a global distribution partner following the failure of its merger with Ferring, the Dutch pharmaceuticals group. But assessments of the product's potential market vary from very little to millions of pounds annually.
Housebroker ABN Amro is forecasting pre-tax profits of pounds 18.5m for the full-year, with earnings of 11.7p. That puts Galen on a racy forward earnings multiple of 46 times. That looks expensive for a company yet to prove it can sustain its performance and investors should consider taking profits.
- 1 2015 General Election: Green party will not appear in TV debate alongside Ukip – says BBC
- 2 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 3 Of course, teenage girls need role models – but not like beauty vlogger Zoella
- 4 North Korean officials 'publicly executed for watching South Korean soap operas'
- 5 Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Elizabeth Norment dead: House of Cards actress honoured by Kevin Spacey after she dies aged 61
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
North Korean officials 'publicly executed for watching South Korean soap operas'
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
Nigel Farage and Frankie Boyle clash over Andrew Lawrence's 'Mock the Week' criticism
iJobs Money & Business
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...
£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...