Allergy Therapeutics starts strong ahead of big second half

Allergy Therapeutics reported strong underlying revenue growth in the first half, boosted by an increased market share for its flagship Pollinex Quattro allergy treatment and one analyst feels the company's run of bad luck might be ending.

Revenue for the six months to the end of December leapt 39% to £40.4m, or up 18% at constant currencies to £34.2m.

Pollinex Quattro, the four-injection, aluminium-free hayfever treatment, increased its market share in the group's main European markets to 13% from 12%.

Helped by sterling's weakness, the AIM-listed company enjoyed 40% growth in operating profit to £11.1m before including R&D spend.

A cash balance of £27.8m was left after lower R&D spending of £3.8m and £5.4m inflow of cash generated by operations as well as the strong trading result.

Management expect growth in net sales will continue but said research and development costs will rise significantly in the second half of the year compared to the first half, reflecting the exciting preparation for the expected start of two major trials as well as investment in infrastructure to progress the important German Therapy Allergy Ordinance process.

First patients were recruited in the pivotal Pollinex Quattro birch phase-three study in Europe, while the second major trial, the US grass programme, has proceeded as planned with the safety trial advancing to a dosing trial scheduled for the second half.

CTA approval was received in Spain for the first phase of a clinical study investigating the safety and tolerability of Acarovac MPL, a house dust mite immunotherapy using the Pollinex Quattro technology platform.

Following positive results from preclinical research into its unique therapeutic peanut allergy vaccine, Polyvac Peanut, the group will now progress the vaccine in accordance with its stated strategic plan when funding the programme and will soon proceed to Phase I development.

Broker Numis said AGY's pipeline of development stage products, which address the much larger markets of the US, dust mite and peanut allergy, offer "significant long term value" but that "perhaps the market sees as a series of binary risks".

Analysts wonder if the tide is "finally turning", suggesting luck has rarely been on the company side for much of the last decade.