Numis reiterates 'buy' on Allergy Therapeutics after full year results

Numis reiterated a ‘buy’ rating and target price of 37p on Allergy Therapeutics on Monday after the company reported its full year results.

Allergy reported a 19% increase in revenue at constant currency to £51.5m in the year ended 30 June as it grew market share in its main European markets.

However, the company posted a loss of £13m compared to a profit of £108,000 last year as it ramped up its investment in research and development to £16.2m from £3.1m.

The group said its R&D had an “overall positive but mixed” year. Allergy had a successful Phase II dose-ranging study for Pollinex Quattro Birch in Germany but the Phase II Pollinex Quattro Grass dose range finding study in the US did not give conclusive evidence of an optimal dose regime. The inconclusive results of the Phase II Pollinex Quattro Grass study has caused a delay to its potential US market entry, the company said.

Meanwhile, the firm expanded its portfolio with the acquisition of the Virus Like Particle technology licence for the development of a potential new injectable vaccine immunotherapy treatment for peanut allergies.

Numis said: “Revenue growth of 19% on constant currency reflects Allergy Therapeutics’ strong performance in Europe, and in our opinion more than compensates for the setback in US development.

“We continue to see a strong outlook for the business in Europe and following the disappointing commercial performance of daily tablets in the US, ultimately see it as the best-placed company to crack the larger US market, with a treatment format that suits the US allergists' preference for injections.”

The broker added: “The shares trade at a material discount to peers with significant additional upside from the pipeline, which now includes a promising peanut vaccine.”

Shares fell 3.24% to 17.78p at 1017 BST.