Clinigen set to lead multibillion-dollar unlicensed drugs market

A British company has positioned itself to lead the growing multibillion-dollar market for unlicensed pharmaceuticals by providing a way for patients to access drugs unavailable through local health systems.

Clinigen said disparities in the availability of medicines between different countries were fuelling demand for a safe and ethical way to access unlicensed drugs.

The London-listed company on Friday agreed the £225m acquisition of its biggest rival, Idis. Peter George, Clinigen chief executive, said the combined group would become a one-stop shop for doctors and pharmacists around the world who wanted to prescribe medicines that could not be sourced locally.

Demand comes not only from emerging markets with limited access to modern drugs but also from European countries where the launch of new treatments often lags behind the US.

Mr George said the global market for unlicensed drugs was worth more than $5bn with potential for strong growth as the proliferation of online medical information increases patient awareness of treatment options.

"Patients are going online and talking to people in other countries with the same condition. Then they go to their clinician and ask for the drugs they have heard about."

Of the 154 new drugs launched somewhere in the world between 2008 and 2012, almost half remained unavailable in the UK and Germany in 2013. In Japan the figure was closer to two-thirds and almost 80 per cent in China, according to the IMS Institute for Healthcare Informatics.

Mr George said Clinigen was a more ethical alternative to unregulated online sales, which have become notorious for counterfeits and safety problems. A 21-year-old British woman died last week in Shrewsbury after suffering toxic side effects from diet pills bought over the internet.<

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

Clinigen does not sell directly to patients. Instead, it deals with doctors or pharmacists, who generally have broad rights to prescribe unlicensed medicines if convinced they are right for the patient.

Clinigen and Idis also work with drugmakers to distribute niche medicines and provide access to drugs that are licensed but not commercially available - perhaps because they have not been adopted by local health providers or because they have been withdrawn from sale by their manufacturer. They also supply established drugs to compare with new therapies in clinical trials.

Shares in Clinigen closed up 7.5 per cent after the Idis deal on Friday, valuing the company at £460m. Clinigen had sales of £126.6m and gross profits of £41.2m last year. Idis sales were £180.9m, with gross profits of £30.9m.

Charles Weston, analyst at Numis, described the deal as a "transformational" acquisition that would propel Clinigen into global leadership of a high-margin market. The transaction delivered a 22-fold return for CBPE Capital, the private equity firm that acquired Idis for an enterprise value of £22m in 2005.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation