Quantum Pharma seeks solace after profit warning

Quantum Pharma, the manufacturer and supplier of niche medicines and healthcare services, warned annual profits would be lower than forecast due to pipeline delays that will also affect the coming financial year.

Despite making significant progress in the year, with a restructure into three divisions, key senior appointments and integration of two acquisitions, the AIM-listed group said its niche pharmaceutical division had lately endured delays in its product pipeline such that only five of the 10 expected new launches it had expected in October.

For the year to 31 January 2016 this means earnings before interest, tax, depreciation and amortisation will be around £12.7m, shy of the £13.4m expected, and that it now expects "more moderate double digit revenue and EBITDA growth" for the year ahead.

Management, including the new managing director of the niche pharma arm, have reviewed the pipeline processes at subsidiary Colonis and found that while its value remains as expected, the progress in obtaining regulatory product approvals is around 12 months behind the expected schedule at the time of the December 2014 AIM admission.

"We are confident it will come to fruition over the next 24 months," said chief executive Andrew Scaife.

Quantum remains confident that the Specials division, which manufactures unlicensed medicines and hard-to-source products, remains "well placed to continue to grow its market share" through its exclusive agreements with the largest players in the UK pharmacy market.

The volume pressure in the specials market noted in October's interims has stabilised over the last six months, it added.

Scaife, who expects to declare a full year dividend of 1.5p per share, said: "The fundamentals of the group are stronger now than they were at the time of the AIM IPO."

He said last year's restructuring, along with the commercialisation of Biodose Connect in the first half of 2016, "will lay the foundations for future growth".

Shares in Quantum, which hit a high of more than 170p in June last year, followed Monday's low of 73p with an immediate plunge to 51p before crawling back to 62p, still down 15% on the day.