AGY is a long-established specialist in the prevention, diagnosis and treatment of allergies. Pollinex Quattro (PQ) Grass, the subcutaneous allergy immunotherapy (AIT), continues to gain market share despite being available in the EU only on a ‘Named Patient’ basis. The Phase III trial, designed to obtain approval for PQ Birch as a biologic in Europe, is well advanced, and the Phase II PQ Grass trial will report data shortly. As explained in the February trading update, underlying 1H’18 sales growth, although weaker than expected due to a low pollen season in central Europe, suggests that AGY has continued to make market share gains.

  • Strategy: AGY is a fully integrated pharmaceutical company focused on the treatment of allergies. There are three parts to its strategy: continued development of its European business via investment or opportunistic acquisitions; the US PQ opportunity; and further development of its pipeline.
  • Interims: Underlying sales grew 1.3% to £42.2m (£40.4m) in 1H’18 despite an unexpectedly weak pollen season, which suggests further market share gains. Careful control of costs (marketing -2% at CER) and working capital, plus timing of the planned increase in R&D spend, generated a cash position of £25.8m.
  • Clinical update: Of note, the PQ Birch Phase III trial completed recruitment in 1H fiscal 2018. The next step will be application to the European Commission for full approval of PQ Birch as a biological, expanding access in Europe. The Phase II PQ Grass trial will soon report data, advancing towards US market entry.
  • Forecasts: Our forecasts for the full year have not changed; they were last altered following the February 2018 trading update. Total R&D investment is forecast to accelerate in 2H’18 and rise further, as larger US trials and further Phase II trials get under way.
  • Investment summary: AGY is in an exciting period, with a clear vision, gaining market share from competitors, and leading the race to have its products fully approved and regulated as biologicals – first in Europe, then in the US, where the regulators are demanding change. Read-out from the EU Phase III birch and US and EU Phase II grass trials will provide the next major value inflection points.