Pharma outsource service is cheap for the growth

By Author Charlie Gibson Feb 13, 2006

1

Share with
friends:

Comments (0) Print this article

At least one firm that stands to benefit from the many drug-safety scandals of 2005 is Aim-listed Premier Research (PRG, 131p), says Investors Chronicle.

It focuses on oncology, the central nervous system and immunology, and was formed in 2003 from the merger of Therapeutic Management with Switzerland’s CRC. The firm runs a complete clinical trial outsource service for pharmaceutical firms. Using that service makes sense for drug firms for two reasons: it’s cheaper, and the data it produces should be more objective and hence “more acceptable to regulators”.

Premier is a fast-growing firm (revenues were up by 41% in the first half of last year and underlying profitability by 19%) in a fast-growing market (forecast to grow by 50% in the three years to 2007). It has also made two acquisitions in the last 12 months – EPA EuroPharma and PharmData for a combined consideration of £16.1m – to strengthen its position in the German market.

Given this kind of growth, the shares seem cheap on 20 times current year earnings, falling to 16 times for 2006-2007, about half the rating accorded to similar US firms. That seems unfair.

Comments (0)

Published in Tips & advice | More articles by Charlie Gibson

Share with
friends:

Related articles

Leave a comment

This will be the name displayed with your comment.

This helps us verify comments are genuine. It will not be displayed anywhere on the site and is stored confidentially.

Please keep your comment within 1,000 characters and relevant to the main topic. We encourage healthy debate, but we don't allow insults or bad language. Anything off topic or unpleasant, we'll remove. Enjoy the conversation! Thank you.

captcha To prevent spam-related comments please enter the characters shown in the 'Captcha' box to the left.

By leaving a comment you accept our terms and conditions.


FREE - MoneyWeek's daily investment emailJohn Stepek

Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.

>