Ergomed at heart of battle against coronavirus

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What it does

Ergomed PLC (LON:ERGO) provides custom made solutions in every stage of development, from proof of concept to late-stage programmes, to the pharmaceutical industry and the development of new drugs.

It has three arms: a full-service clinical research services division, a specialised orphan drug development team and PrimeVigilance, which provides pharmacovigilance and medical information services.

In response to the pandemic, the firm has engaged in trials for two antibodies, namilumab (IZN-101) and siltuximab. Interim data on the latter, an approved rheumatoid arthritis option, showed that 33% of patients saw clinical improvement, with a reduced need for oxygen support, while 43% stabilised.

Namilumab is a monoclonal antibody therapy targeting granulocyte-macrophage colony-stimulating factor (GM-CSF), a pro-inflammatory immune response or cytokine that plays a central role in a broad range of immune-mediated diseases.

Ergomed said the cytokine has been found in higher levels of COVID-19 intensive care patients and early treatment to suppress it might help halt the progress of coronavirus related illness.

 

How it is doing

In a trading update in January, the company said 2020 earnings would be ahead of expectations with revenue for the year expected to be around £86.4mln, up 26.5% on 2019’s £68.3mln and in line with current market forecasts.

The positive trading performance seen in both Ergomed’s pharmacovigilance (PV) and clinical research organisation (CRO) businesses during the first six months of the year continued through to the year-end and resulted in a strong order book at the start of 2021.

The PV division’s revenue increased by 56% overall to £55.1mln, or by 30% on a like-for-like basis (i.e. excluding the impact of the PrimeVigilance USA acquisition).

CRO revenues eased a tad to £31.3mln from £32.9mln the year before but second-half revenues were up 11.2% on an organic basis compared to the first half of the year and up by 15.2% year-on-year.

The debt-free company ended the year with cash and equivalent balances of £18.9mln, up from £14.3mln a year earlier.

Ergomed said the outlook for 2021 is positive, bolstered by the strong order book and the acquisitions of Ashfield PV (now known as PrimeVigilance USA) and MedSource. These acquisitions considerably strengthened Ergomed’s presence in the strategically important US market and globally, further enhancing growth potential in both the PV and CRO businesses, the company said.

 

What the boss says: Miroslav Reljanović, executive chairman

“In 2020 Ergomed demonstrated the resilience and robustness of our services business model, continuing our strong organic growth and completing key strategic acquisitions in the USA in both our pharmacovigilance and CRO businesses. Despite the global COVID-19 pandemic, Ergomed performed ahead of market expectations for the full year.”

“We start 2021 from a position of considerable strength, in a robust financial and strategic position and with a strong order book to support our strategy of leadership as a pharmaceutical services specialist with a global presence.”

 

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Inflexion points

  • Benefits from strong order book
  • Additional earnings from MedSource acquisition
  • Strong momentum into 2021

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