|
Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE
IAN GILHAM, CHIEF EXECUTIVE, AXIS-SHIELD PLC: Well good morning and welcome to Axis-Shield's 2008 interim results. I'll be presenting -- I'm Ian Gilham, Chief Executive. I'll be presenting most of the slides today. And then Ronny Hermansen, Group Finance Director, will be presenting the financials and also present is Nigel Keen our Chairman.
There will be questions at the end of the presentation. And I think we will also take questions from the dial-in as well. But we will take questions from the floor first.
So how are we doing? Financial highlights. You've seen the release this morning. We had strong revenue growth for the first half of the year at 28.8%, taking us to just short of GBP43m in turnover. Revenue growth has been impacted by the strong Norwegian currency. I think many of you know that the krone is very much linked to oil and has been very strong in the first half of the year. But we still saw strong revenue growth, 17.6% revenue growth at constant exchange.
As we have previously indicated, we've had significant expenditure in Norway around growing our sales and marketing capabilities, but also our new plant and facilities which many of you have visited. And most of those facilities -- most of those expenditures are in kroner. So obviously that has had an impact on our expenses in the first half of the year. And Ronny will talk to you about that in more detail later.
Strong revenue growth from Afinion, NycoCard and AxSYM xtra. As we indicated previously those are our key growth areas. Most of our investments in previous -- in the recent years have been in the Point-of-Care products, particularly Afinion. And we are pleased to report strong revenue growth in Point-of-Care of 36.7%, up to GBP17.4m. So we're very pleased with the progress for the Point-of-Care business.
Profit before tax is up 45% to GBP1.6m. And, as promised, we said at the beginning of the year that we would be keeping R&D expenditure flat and we indeed did that. R&D spend was GBP4.1m, exactly the same as the same period last year. So financially on track.
From an operating viewpoint, as we said at the beginning of the year, we have a strong focus now on commercialization. We're making good progress. We've made good progress with Afinion, both instrument and cartridge manufacturing scale-up. We indicated that we would get our new four track manufacturing facility up and running in the first half of the year, and indeed we did that.
You may have read that we extended and strengthened our distribution arrangement for Afinion in the US with Abbott and PSS, Position, Sales and Service. So we strengthened that position and we've extended that exclusive arrange through to 2011. So that's great news for the Afinion business in the key US markets.
In addition you will know -- will be painfully aware we have had a long history of homocysteine litigation in the US and around the world with Diazyme. And we are very pleased to have settled that. And now we are focusing all our efforts on growing, bringing growth back into the homocysteine market rather than spending our time and effort on expensive litigation. So we are very pleased to have settled that and to move forward with that business.
As promised, we launched homocysteine on ARCHITECT and we think that's going to help us with the Homocysteine business going forward. We made good progress with new markers, anti-CCP for rheumatoid arthritis and Active-B12 for anemia and neurological diseases.
We had very strong third party product growth. I will tell you more about that. And we are very pleased to be announcing today that we'll be developing a lipid panel on the Afinion system which we're very excited about accessing that global $1b lipid testing market. And I will be telling you more about that today.
A little bit about the market. Just a reminder, in-vitro diagnostics is a $35b market, growing at 7% a year. Growth back into that market, particularly in key areas like point-of-care testing, coagulation and particularly diabetes and glucose, that's an $8m business growing at 11% per annum. So that's an exciting area to be participating. And as a reminder, the market is very fragmented between players. So there's no real single dominant player despite the numbers of acquisitions and M&A going on in the area.
Why is growth coming back into diagnostics? Because healthcare is at an inflection point, as we've shown previously. Previously we used to treat the symptoms of disease with drugs and therapeutics. You don't really need sophisticated diagnostics to do that. More sophisticated treatments require more sophisticated diagnostics and more specific diagnostics. And that's the key area, the theranostics area that's driving growth back into in-vitro diagnostics which has been fairly flat in the previous 10 to 15 years. So diagnostics is a more exciting area to play these days than it probably was 10 years ago.
What do we do? We try to focus on the high growth areas of an increasingly attractive business. We look for diagnostics with added value, particularly this theranostic area where the test links closely to the therapeutic. And we operate in three areas. We operate in Point-of-Care, where doctors and healthcare professionals test patient samples in the laboratory, in the physician's office or in the clinic. We participate in the laboratory, where blood samples and other samples go off to a hospital laboratory. And then we operate in direct distribution, particularly in our home markets where we sell our own products and third party products.
As a reminder, Axis-Shield is very much at an inflection point. Up until last year, or very recently, we were very much an R&D company, spending a lot of money, an awful lot of money in R&D and to develop products, particularly Afinion, for the market. And we were loss-making. We've moved into a period now of profitability where we have the products, we're building the menu and we are focusing on manufacturing and commercialization of those. And that's the phase that we are in today. And that's where we are totally focused.
Point-of-Care is an important area for us. The slide on the right here shows the total Point-of-Care testing market. This is home testing. This is blood glucose testing. We're not in that. We're in the professional part here, the 35% of that which is testing in the doctor's office or the professional environment. That's a $5.6b growing at 8%.
The areas where we are participating are higher than average growth, particularly HbA1c for diabetes management, $250m growing at 20%, coagulation testing $250m growing 11%. And today we can say that we're now going to be participating in the cholesterol/lipids which is a $475m market, growing at 14%. So we are continuing our trend of operating in the higher growth parts of the physician's office or the physician's office laboratory segment.
Afinion is our main product to get into that market. You are aware it's a unique instrument. In this market the market tends to be served by one instrument that does one test. If a doctors wants to do four tests they tend to have four instruments. The concept of Afinion is to bring those different tests onto one instrument. It's a unique concept. And we don't see...
|
