France’s Stallergenes had to halt its production in December due to problems with an IT system, and it is not likely to recommence until March at best.

 Analyst: ALK can look forward to long-term sales boost 

That much is evident from a Dear Doctor letter from the group, the contents of which Nordea’s healthcare analyst, Michael Novod, has viewed. The letter, dated January 15th, has been sent to allergologists in France, offering them an apology because named patient products have not been on order from the group from August through December and will not be available for order in January or February either.

“It means the production stop will be in effect until March at least and we have no realistic estimate for when the company could recommence production and distribution of its allergy immunotherapy products,” says Michael Novod.

Stallergenes is currently shedding market shares to Denmark’s ALK, which in January hired 80 new workers in its production unit in order to double output in France on the back of its rival’s woes. Meanwhile, the company raised its guidance for its 2015 results. ALK now expects revenue of DKK 2.57 billion in 2015, up from DKK 2.5 billion and an operating result (EBITDA) of about DKK 450 million instead of the DKK 400 million it had previously guided for.

Long-term impact

The continued travails for Stallergenes could spell more good news for ALK.

“We believe that the situation for Stallergenes is very positive for ALK and now that the situation is unlikely to get any better until at least March, it gives ALK ample opportunity to take significant market shares in France and Europe and switch patients to their tablet-based products,” says Michael Novod.

Nordea is, however, maintaining its “Hold” recommendation for the ALK share for the time being.

“We believe Stallegernes’ problems will have a long-term impact on competition dynamics, and ALK should be able to secure strong results for 2016,” says the analyst, who has a DKK 1035 target price for the share.

According to Sydbank’s senior analyst Søren Løntoft Hansen, the setback for Stallergenes happens at a perfect time for ALK.

”This comes at a crucial time, because it’s in the fourth and first quarter that you initiate treatment in the run-up to pollen season, at least when we are dealing with grass. So it’s positive for ALK and that positive effect will carry into a number of quarters in 2016,” he says, adding:

“As an allergy sufferer you don’t simply switch between different brands, so there’s probably a long-term tendency to see from this shut down.”

ALK has not wished to comment on developments for its French rival.

 ALK: We have to reach out to doctors now

 ALK CEO eyes higher growth rates - in 2017 

- translated by Martin Havtorn Petersen

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