Sinclair IS Pharma going aesthetic

November 26, 2015 Off By Dino Mustafić

Sinclair IS Pharma plc will sell its non-aesthetics business focused on dermatology to Alliance Pharma plc for a total upfront cash consideration of £132m (£127.5m consideration plus c.£4.7m for estimated stock at closing) as well as sales-related royalty payments relating to Flammacerium US.

According to Sinclair’s press release on Thursday, the company will also collect the remaining working capital associated with the non-aesthetics business, estimated at c.£4m net.

“The Disposal creates a fast growth, pure-play differentiated aesthetics company, with high gross margins recorded in FY15, and leaves Sinclair with a pro-forma net cash position of £82m to invest in future growth opportunities and to cover milestone payments from historical acquisitions,” Sinclair’s press release reads.

Alliance will by this buy acquire 27 products including five key growth brands; Kelo-Cote, Flammacerium, Aloclair, Kelo-stretch and Atopiclair.


The Acquisition and associated expenses will be financed by a fully underwritten vendor placing raising gross proceeds of £78.5 million and by £54.2 million to be drawn down under the New Loans.

The Acquisition will significantly increase the Company’s footprint outside of the UK and will provide an enhanced platform for further corporate development, Alliance’s press release says.

John Dawson, Chief Executive of Alliance, commented:

“This Acquisition represents a very significant development for Alliance. On completion, Alliance will be a significantly larger business with synergies in existing markets. Having over half of our business outside of the UK, we will have a greater ability to compete for international deals and in-licensing opportunities.”

Sinclair said it would simplify corporate structure and will have significantly reduced number of SKUs. Following completion of the transaction, which is expected to occur in December 2015, the company will be re-named Sinclair Pharma plc.

CEO Chris Spooner said: “In-market sales data shows that the growth rate of our Aesthetics portfolio has accelerated throughout 2015 and is now trending at c.40%. The disposal substantially reduces business complexity and transforms Sinclair’s balance sheet. The company remains in an offer period as a result of continued interest in Sinclair’s leading aesthetics brands”.

Sinclair has built a strong portfolio of differentiated, complementary aesthetics technologies with the acquisition of European marketing rights to Sculptra (collagen stimulator) and subsequent acquisition of global rights for Ellansé (collagen stimulator), Perfectha (dermal filler) and Silhouette(volume repositioning), as well as Global ex-US rights for Atléan (collagen stimulator). These products achieved 35% LFL growth for the year ended 30 June 2015, generating revenues of £27.8m with at a gross margin of over 70%.

New markets

The company revealed its plans to enter several new markets and line extension launches over the next few years.

The company expects to achieve annual peak US sales in excess of $200m within 5 years. In Brazil, the company has an option to acquire its Silhouette distributor in Q1 2016 and to create a direct presence in this key aesthetic market.

Deal closing in mid December, 39 workers to switch to Alliance Pharma

The transaction is expected to close in December subject to approval by Alliance Pharma shareholders at an EGM vote to be held on 16 December 2015, admission of Alliance’s enlarged issued share capital to trading on AIM, customary employee consultation processes and novation of certain contracts.

Sinclair announced that 39 of its current workers would be transferred to Alliance Pharma upon the transaction.