Consort Medical Says BAT Unit Ends Voke Inhaler Supply Deals -- Update
January 03 2017 - 6:29AM
Dow Jones News
(Adds broker comment, share price)
By Philip Waller
LONDON--Shares in Consort Medical PLC (CSRT.LN) fell Tuesday
after the drug-delivery-device maker said a unit of British
American Tobacco PLC (BTI) is terminating supply deals for the Voke
nicotine inhaler as the product failed to commercially launch in
2016.
Consort said Nicovations Ltd. had served termination notices for
all supply agreements with Bespak Europe Ltd., a Consort Medical
unit, for Voke, effective immediately.
The companies, however, remain in talks about the future of the
Voke program, Consort said.
At 1035 GMT, shares in Consort were down 54 pence, or 5.1%, at
1006 pence.
Brokerage Panmure Gordon, which is maintaining its buy
recommendation on Consort, described the news as disappointing, but
said it isn't changing its financial estimates for the company as
the product had previously been removed from forecasts.
It said Consort would launch a number of products in the next 12
months that could boost the company's growth above Panmure's
expectations.
"We don't expect the company to lose financially from the
termination of the contract," Panmure analyst Julie Simmonds said.
"We expect the shares to be weak on today's news, however, we would
see this as a buying opportunity as the underlying business remains
strong."
Voke designer Kind Consumer licensed distribution rights to the
product to Nicovations, which in 2011 entered into separate supply
agreements with Bespak under which the latter would make and supply
filled Voke devices and associated valves.
Voke is one of 16 programs being pursued by Bespak, and Consort
Medical said it doesn't believe the termination materially affects
its expectations for underlying trading this financial year ending
April 30.
"While we are naturally disappointed in the loss of the supply
agreements for Voke to Nicovations, we continue our dialogue with
Kind Consumer and with Nicovations on the future of the program and
we remain highly confident in the robustness of the remainder of
our business and our prospects," Consort Chief Executive Jonathan
Glenn said.
Write to Philip Waller at philip.waller@wsj.com
(END) Dow Jones Newswires
January 03, 2017 06:14 ET (11:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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