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Alliance Pharma trading ahead of expectations

Ahead of its AGM, Alliance Pharma (AIM:APH) said that trading during the first four months of 2010 has been ahead of its expectations and significantly ahead of last year. Turnover to 30th April 2010, was £15.0 million, 88% higher than the same period in 2009.

“Alliance continues to benefit from the positive sales trends reported at the time of the company's preliminary results”, Alliance Pharma chairman Michael Gatenby commented. "Sales of Deltacortril / enteric coated prednisolone tablets continue to be strong.  We remain cautious that the prednisolone market may become more competitive over time, though this has not happened to date.”

In February, Alliance  completed the acquisition of Cambridge Laboratories - adding 18 new prescription products to its portfolio. In this morning’s statement, the company noted that sales from Cambridge Laboratories, along with 2 products acquired from Reckitt Benckiser (LSE: RB.) in 2009, contributed £2.7 million to revenues during the 4-month period.

"The Cambridge Laboratories acquisition has been successfully integrated into Alliance ahead of schedule.  Sales by Alliance of the Cambridge Laboratories products in the first 10 weeks post-acquisition have been in line with our expectations”, Gatenby added.

"We look forward to the remainder of 2010 with confidence."

In late March, Alliance published its results from a landmark year in which the pharmaceutical company increased sales by 44% to £31.2m compared with 21.8m in the previous financial year. In the twelve months ended 31 December 2009, the company achieved a three-fold increase in pretax profit before exceptionals to £8.6m as well as in adjusted earnings per share (NYSEARCA:EPS) to 3.55p.

According to Alliance, its record sales performance reflected the company’s transition to the new business model, set out in 2007, with the benefits clearly evidenced in the results.

"2009 was a landmark year for Alliance, with major increases in turnover, profitability and cash generation, and the commencement of dividend payments”, Gatenby had commented. “We look forward to more strong results in 2010, particularly following the Cambridge Laboratories acquisition."

Alliance said in its results statement that the development side of the business is now in abeyance, with no investment of any substance made last year, stating there are no further plans to do so. Through its concentration on the trading side of its business, the company said it has reached a critical mass of human, product and financial resources which enable it to invest confidently in adding more established products to its portfolio.

In the remainder of the year the company is well placed to maintain strong growth, particularly driven by the Cambridge Laboratories acquisition, the full year effect of the Buccastem and Timodine acquisition, and organic growth from the dermatology portfolio, Alliance said. Whilst the company noted its caution in terms of competition in Deltacortril’s market, Alliance is confident that it is set for another strong performance this year.