ProStrakan aims to push sales to £100m

BORDERSBASED drugs developer ProStrakan has the potential to more than double its annual sales to £100 million within the next two years as it eyes key product approvals in both Europe and the US.
The group, which yesterday unveiled a 19 per cent surge in annual revenues to £45.6m, also confirmed it was on track to break even sometime next year.

Chief executive Wilson Totten stressed the Galashielsbased business was well financed as it entered a "critical and potentially transformational" period.

ProStrakan makes a range of products including a marketleading supplement used in the treatment of osteoporosis, a testosterone gel, an antinausea patch for people undergoing chemotherapy and a treatment for anal fissures.

Totten said: "We are at a very important point in the company’s history as we await our first US approval in the next few weeks and a couple of pivotal European approvals.

"The question is how fast can we grow the company, not whether it’s going to grow or not."

Annual sales could top the £100m mark within just two to three years providing the company obtains regulatory approval in the US and mainland Europe for a number of products.

"That’s a relatively straightforward target," Totten said, referring to the shortterm turnover goal.

"Each new drug we are looking to launch has $100m peak sales potential, so it’s not long before you get towards the £200250m sales mark."

The Londonlisted group is funded through to its expected profitability date after securing a £50m debt facility last year.

Yesterday’s annual results showed it had drawn down an initial £20m of that funding, leaving £30m, while total cash in the bank stood at £24.5m.

Operating losses in 2007 were reduced by 3 per cent to £17.7m.

Chief financial officer Paul Garvey said breakeven was likely during 2009 leading to internal cash generation and the first year of profitability in 2010.

He pointed out that last year’s product sales of £40.9m – a 22 per cent yearonyear rise – had been almost entirely generated by the firm’s own sales force. Gross margin rose 4 percentage points to 64 per cent.

Last month, Totten said the Borders firm had been approached for possible mergers from cashstrapped biotech companies from both sides of the Atlantic as the industry suffers from a major low in investor confidence. However, ProStrakan has rejected all approaches.

Yesterday, Totten added: "(The financial results] are a very good outcome for us. There have been a lot of surprises in this sector recently.

"We are not the sort of business that’s dependent on just one drug getting approved. We’ve got to where we are by doing a whole range of product approvals, licensing deals and acquisitions."