Market Overview

Stallergenes Greer Delivers Double Digit Growth and Solid Business Performance in the First Half of 2018; Announces Senior Leadership Succession Plan

  • Net sales grew 10% year-over-year, reaching €142.3 million in reported
  • EBITDA amounted to €27.6 million, a significant improvement compared
    to €8.3 million in H1 2017
  • Investments in quality and manufacturing continued while focus on
    efficiency led to gross margin improvement and increased productivity
  • Company delivered positive net income of €13.6 million and positive
    cash flow
  • 2018 business outlook unchanged: Net sales €270-€280 million, EBITDA
    €40-€50 million
  • Fereydoun Firouz, currently Chairman & Chief Executive Officer, to
    retire at the end of 2018 and to be succeeded by Michele Antonelli,
    currently Company's Executive Vice President for Europe & International
  • The Board unanimously elected Stefan Meister, Board Director since
    2015, to become Chairman of Stallergenes Greer plc as of January 2019

Regulatory News:

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Stallergenes Greer, a biopharmaceutical company specialising in
treatments for respiratory allergies, today announced its half-year
results for the six-month period ended 30 June 2018.

H1 2018 Financial Highlights

(in € million)   H1 (unaudited)
  2018   2017   % change
Net sales   142.3   129.6   10%
Gross margin   96.9   83.4   16%
Gross margin as a % of sales   68%   64%    
EBIT   17.4   (3.5)   n.a.
Net income/(loss)   13.6   (8.9)   n.a.
EBITDA   27.6   8.3   n.a.
EBITDA as a % of sales   19%   6%    

Fereydoun Firouz, Chairman and Chief Executive Officer of Stallergenes
Greer, commented:

"Our performance through the first half of 2018 reflects our
continued focus on business fundamentals: grow our share in priority
markets and strengthen profitability to sustain investments. We
delivered double digit sales growth in a competitive global market,
despite reimbursement and pricing challenges in European and
International markets. At the same time, we reduced our operating
expenses by 12% while investing in quality at each of our global
manufacturing sites and advancing our clinical pipeline.

Our ability to drive growth while controlling our costs resulted in
another important milestone in our recovery that is critical for the
future of our company: positive net income at €13.6 million compared to
a loss of €8.9 million in the first half of 2017. We also succeeded in
generating positive cash flow. As a result of these important milestones
being reached, we now have the organizational flexibility, balance sheet
stability and internal capability to pursue our goals. We will continue
to grow and expand our current business and be opportunistic to
accelerate our future growth through external innovation.

In the second half of 2018, we will solidify our leadership position
in priority markets and continue to grow our share strategically across
our Europe/International and Americas regions. We also expect to release
initial results from the phase III clinical trial for our house dust
mite tablet candidate STAGR320 later this year. Most importantly, we
will sustain our commitments to quality and technical operations to
offer a complete range of high quality subcutaneous and sublingual AIT
treatments that meet the current global market demand, to position
ourselves for future growth and to deliver long-term value creation."

Half-year net sales increased 10% because of continued growth across
the product portfolio and regions

Net sales by region: Solid growth in Southern Europe and the United

(in € million)   H1 (unaudited)
  2018   2017   % change
Southern Europe   72.1   53.7   34%
North & Central Europe   17.9   18.5   (3)%
International   6.9   11.8   (42)%
United States   45.4   45.6   (0)%

The 10% increase year-over-year in first half net sales reflects strong
growth in Southern Europe and in the United States. However, results in
the United States were negatively impacted by foreign currency exchange.
While reported sales were stable compared to the same period in 2017,
the region delivered 12% year-over-year sales growth in local currency

Stallergenes Greer continued to gain share in the European grass tablet
market with Oralair®1 and in the German birch tree market
with Staloral®2. In addition, the Company had a strong
performance in France, Italy, Switzerland, the Benelux region, Slovakia
and Russia. Sales in international markets were down due to a
combination of effects from the application of the new revenue
recognition standard from 1 January 20183 and a large
shipment of products in the same period of 2017 to prepare for in-market

In the United States, Stallergenes Greer has strengthened its leadership
of the bulk allergen market by executing on a recalibrated marketing
approach as well as by maximising production capabilities to meet the
demand of a market-wide shortage of priority allergens during a high
allergy season in the United States.

Net sales by product category: Sublingual sales grew in
EU/International while United States strengthened leadership position in

(in € million)   H1 (unaudited)
  2018   2017   % change


  91.3   76.9   19%


  34.7   36.9   (6)%
Veterinary   4.3   5.0   (14)%

Other products6

  12.0   10.8   11%

In the first half 2018, sublingual product sales increased 19% to €91.3
million from the first half of 2017, primarily driven by Staloral as a
result of market share gains in priority markets, a strong performance
in the paediatric market and, to some extent, the industry-wide shortage
of subcutaneous immunotherapy treatments in Europe.

In the subcutaneous product category, the Company reported first half
2018 sales of €34.7 million, a 6% decrease compared to 2017. In
Europe/International, sales decreased as a result of production delays
at the Company's Antony facility. In the U.S., solid sales growth was
offset by the negative impact of foreign currency exchange.

First half 2018 veterinary sales declined 14% to €4.3 million compared
to the same period of 2017, due to increased competition in this segment
and the negative impact of foreign exchange. Sales from the other
product category grew 11% year-over-year to €12.0 million in the first
half of 2018 as a result of captured market opportunities in the U.S.

Source: Insight Health
3 IFRS15
4 Product
category includes oral drops (Staloral) and tablets (Oralair and Actair®)
Product category includes Named Patient Prescription products and
bulk allergens
6 Product category includes diagnostic
and ancillary products

Operational efficiencies delivered margin improvement and return to
positive net income

Stallergenes Greer's first half 2018 gross margin of €96.9 million
represented a margin of 68% of net sales, compared to 64% in the prior
year first half. In addition, efficiency measures continued to deliver
significant cost savings and the Company reported a positive first half
2018 EBIT of €17.4 million, compared to a loss of €3.5 million in the
same period of 2017. First half 2018 EBITDA increased by €19.3 million
to €27.6 million as a result of a €12.7 million increase in sales as
well as a 12% decline in operating expenses, from €86.8 million in the
first half of 2017 to €76.6 million in the same period of 2018. The
Company reported a net income of €13.6 million in the first half of
2018, compared to a net loss of €8.9 million in the same period of 2017.
As of 30 June 2018, the Company's shareholders' equity represented 83%
of the balance sheet total.

Company continues to invest in innovation to fuel long-term growth

Stallergenes Greer is committed to developing innovative therapies for
major respiratory allergies and invested €20.1 million in R&D in the
first half of 2018, primarily to fund the phase III global multi-centre
clinical trial for the Company's tablet candidate STAGR320 for the
treatment of house dust mite-induced allergic rhinitis. With more than
1,600 patients enrolled, this is the largest study conducted to assess
the efficacy and safety of a sublingual immunotherapy tablet treatment.
The Company expects to release top line results from the trial during
the fourth quarter of 2018.

In addition, Stallergenes Greer announced positive results from two
real-world evidence studies regarding the use of allergy immunotherapy
(AIT) compared to the use of only symptomatic treatments to treat
patients with respiratory allergies in June 2018. These studies were
retrospective longitudinal analyses of French and German prescription
databases and further substantiated the long-term benefits of AIT to
significantly reduce the need for allergic rhinitis and asthma
medication in patients suffering from grass pollen- and birch tree
pollen-induced allergies. These studies are part of the BREATH
real-world evidence program, which is designed to understand the
real-world benefits of AIT outside of a clinical trial setting.

Investments in Quality and Technical Operations to continue

Stallergenes Greer continued investments in Technical and Quality
Operations capabilities at all its manufacturing sites to comply with
evolving regulatory requirements and the latest Good Manufacturing
Practice (GMP) biological manufacturing standards; to strengthen its
quality culture across the organisation; and to ensure product quality
and patient safety for all released and distributed products.

During the first half of 2018, the Company successfully completed
maintenance of its manufacturing operations with major renovations and
upgrades. In France, the Company continued to progress on its
remediation plan to address observations related to a 4 January 2018
injunction for its Antony facility from the National Agency for
Medicines and Health Products Safety (ANSM), including renovation to key
manufacturing areas, employee training and an enhanced quality system
focused on consistency across operations. In the U.S., the Company
continued to strengthen its quality system and introduced
state-of-the-art manufacturing technologies and advanced initiatives to
increase capacity.

The company also demonstrated its manufacturing flexibility to meet
market demands during the first half of 2018. In France, the company
increased production of sublingual products to partially offset the
temporary shortage of injectable products in the European/International
markets and sourced a new venom supply to meet a market shortage in
Europe and Asia. In the U.S., the company increased its volume and
delivered high priority allergens.

2018 Business Outlook unchanged

The Company expects 2018 net sales to be in the range of €270 million to
€280 million and EBITDA to be in the range of €40 million to €50 million.

Senior Leadership Succession Plan

Fereydoun Firouz, currently Chairman & Chief Executive Officer, has
informed the Board of his decision to retire from these positions at the
end of 2018. He will be succeeded at that time as Chairman by Stefan
Meister, a member of the Board since 2015, and as Chief Executive
Officer by Michele Antonelli, currently Executive Vice President, Head
of Europe & International & President of Stallergenes SAS. The
announcement comes at the culmination of the successful turnaround of
the Company led by Fereydoun Firouz. Stallergenes Greer is now well
positioned to regain its global market leadership and continue its
positive business momentum.

Fereydoun Firouz said "Stallergenes Greer is a special company with
an inspiring purpose and highly dedicated people. By the end of 2018, I
will have been Chairman and CEO for nearly four years and I believe this
is the right time for a new leader to build upon what has been
accomplished. I have been privileged to work with a passionate
leadership team to successfully overcome some challenging phases and
ultimately deliver the strong results we published today. These results
demonstrate our achievements and the Company can now look to the future
with great confidence. Michele has been an instrumental leader in the
Company's success over the past three years. He has the expertise and
experience to take the lead as CEO and drive Stallergenes Greer to its
next phase of growth

Fereydoun continued "I will leave the Company in very good hands and
at a time when the strategy we devised and executed is showing through
in our financial results and market performance. My colleagues on the
Board of Directors and the management team have the knowledge and
abilities to take the Company to new heights and capitalise on our
product, manufacturing, and geographic opportunities. I would also like
to thank the Board and our shareholders for their resolute support at
all times and wish the very best success to the Company

"On behalf of the Board and our shareholders, I would like to
recognise and thank Fereydoun for his remarkable contribution to the
Company and its performance
." said Elmar Schnee, an Independent
Director and the Chairman of the Remuneration and Appointment Committee.
"Fereydoun oversaw the creation of the Company through the successful
integration of Stallergenes and Greer Laboratories in 2015 and then led
it through the resolution of significant problems from an earlier
implementation of Enterprise Resource Planning software that
unfortunately temporarily halted the supply of products in early 2016 to
its major markets

He concluded by saying "Fereydoun combined a determination and
relentless commitment to meeting challenges, with a penetrating vision
to first develop and then implement a strategy to successfully bring the
Company back to a path of growth and profitability. There is no doubt
that the strength of the Company today is due to his leadership, of both
the Company's strategy and its great people. We recognise these
achievements and are truly grateful for Fereydoun's dedicated service
and for assisting the process of transition until the end of 2019

The Chairman-designate, Stefan Meister, then welcomed Michele Antonelli
to the role of Chief Executive Officer and said "In Michele we are
fortunate to have ready the leader for the next phase of the Company's
development. His experience and insight, combined with his commitment
and passion for the business, are the ideal combination of talent and
motivation for the future of Stallergenes Greer. I look forward to
serving as Chairman and join Elmar in thanking Fereydoun for his great
service to the Company over the last four years.

Commenting on his appointment, Michele said today "I am honoured to
have been invited to take on the role of CEO of Stallergenes Greer. This
Company is a global leader in an important and growing market and makes
a real difference to the lives of the patients it serves. The
transformation driven by Fereydoun over the last four years leaves us in
a remarkable place, ready to move forward and deliver even more
outstanding results for all its stakeholders. I am delighted to accept
this position at such an exciting time and look forward to working with
the team of great professionals Fereydoun has attracted to the Company
and build upon the strong foundations he has secured for this fantastic

Michele Antonelli has more than 20 years of international experience in
the biopharmaceutical industry with extensive expertise in both
manufacturing and commercial. He previously worked at UCB, the
multinational biopharmaceutical Company, where he held roles of various
responsibility and scope, most recently serving as Executive Vice
President and Head of lmmunology Europe, overseeing the region's
commercial, medical, and market access activities. Prior to joining UCB,
Michele spent 16 years at Merck Serono, ultimately serving as Senior
Vice President and Global Head of Biotech Manufacturing and Process

The Company and Fereydoun Firouz will enter into an agreement governing
Fereydoun Firouz's retirement from the Company that reflects the terms
of his existing contract of employment. This agreement contemplates a
one-year garden-leave period that will run through to the end of 2019,
consistent with Fereydoun Firouz's existing one year undertaking to not
compete with the Company. During this one-year garden-leave period,
Fereydoun will assist as needed with the transition to the Company's new
leadership, providing support as required to Michele Antonelli and to
the Board and management team generally when requested. At the end of
2019, Fereydoun Firouz will leave the Company's employment and be
entitled to the severance terms set out in his existing contract.

Webcast and Conference Call Information

Stallergenes Greer will host an Investors and Analysts meeting tomorrow,
30 August 2018. The event will be available via live webcast at 10:30 am
GMT / 11:30 am CET / 5:30 am EDT. The webcast will be available via the
following link:
and on the Company's website,

Participants are asked to connect at least 15 minutes prior to the
conference call to register, download and install any necessary audio


Headquartered in London (UK), Stallergenes Greer plc is a global
healthcare company specialising in the diagnosis and treatment of
allergies through the development and commercialisation of allergy
immunotherapy products and services. Stallergenes Greer plc is the
parent company of GREER Laboratories, Inc. (whose registered office is
in the US) and Stallergenes SAS (whose registered office is in France).


Name: Stallergenes Greer
ISIN: GB00BZ21RF93 1 - Ticker: STAGR
Classification: 4577
Euronext Paris regulated market

Additional information is available at

This document (including information incorporated by reference in this
document), oral statements made, and other information published by the
Company contain statements that are or may be forward-looking with
respect to the financial condition and/or results of operations and
businesses of the Company. These statements can be identified by the use
of forward-looking terminology such as "believe," "expects," "project,"
"estimated," "forecast," "should," "plan," "may" or the negative of any
of these, or other variations thereof, or comparable terminology
indicating expectations or beliefs concerning future events. These
forward-looking statements include risk and uncertainty because they
relate to events and depend on circumstances that will occur in the
future. Without being exhaustive, such factors include economic
situations and business conditions, including legal and product
evaluation issues, fluctuations in currencies and demand, and changes in
competitive factors. These and other factors are more fully described in
the Company's 2017 annual report published on 16 April 2018 on the
Company's website
Actual results may differ from those set forth in the forward-looking
statements, due to various factors. Save as required by applicable law,
neither the Company nor any other person assumes any obligation to
update these forward-looking statements or to notify any person of any
such update.


Consolidated income statement as of 30 June 2018

Consolidated balance sheet as of 30 June 2018

Consolidated cash flow statement as of 30 June 2018

The financial information set out above does not constitute the
Group's financial statements for the period ended 30 June 2018 and 2017
but are derived from those statements. The annual report for 2017 have
been delivered to the UK Companies House. The auditor has reported on
those statements. Their report was unqualified, did not draw attention
to any matters by way of emphasis and did not contain statements under
Section 498 (2) or (3) Companies Act 2006 or equivalent preceding
legislation. While the financial information included in this
preliminary announcement has been computed in accordance with
International Financial Reporting Standards (IFRS), this announcement
itself does not contain sufficient information to comply with IFRS.

The Group published full financial statements that comply with IFRS
that are available on its website at

The financial statements were approved by the Board of Directors on
29 August 2018.

Consolidated income statement as of 30 June 2018

For the period ended 30 June 2018

€ thousands     30 June


    30 June


Net sales 142,327 129,615
Other revenue 57 10
Total revenues 142,384 129,625
Cost of goods sold (45,531) (46,265)
Gross margin 96,853   83,360
Distribution costs (5,439) (5,383)
Selling and marketing expenses (24,447) (29,894)
Administrative expenses (24,626) (28,807)
Other general expenses (3,168) (1,027)
Selling, general and administrative expenses (57,680) (65,111)
Research and development costs (R&D) (20,132) (24,947)
R&D-related income 1,189 3,225
Net R&D costs (18,943) (21,722)
Operating result (EBIT) before transformation costs 20,231 (3,473)

Transformation costs



Operating result (EBIT) 17,430 (3,473)
Financial income 3 20
Financial expenses (401) (847)
Net financial expense (398) (827)
Net income / (loss) before tax and associates 17,032 (4,300)
Income tax (3,394) (4,582)
Share of loss from associated companies - (8)
Net income / (loss) for the period 13,638 (8,890)

All the activities were in respect of continuing operations.
basic profit and diluted net income per share for the six months to June
2018 was € 0.69 (June 2017: loss of € 0.45)

Consolidated balance sheet as of 30 June 2018

As at 30 June 2018

€ thousands     30 June


  31 December


Goodwill 199,711 195,187
Other intangible assets 67,878 70,913
Property, plant and equipment 66,768 69,138
Non-current financial assets 4,279 3,957
Deferred tax assets 26,717 26,754
Other non-current assets 237 237
Non-current assets 365,590 366,186
Inventories 60,828 56,793
Trade receivables 26,030 33,199
Current financial asset 732 684
Other current assets 10,888 9,231
Current income tax receivable 661 611
Research tax credit and subsidies receivable 26,151 22,708
Cash and cash equivalents 70,702 50,849
Current assets 195,991 174,075
Total assets 561,581 540,261
Share capital 19,788 19,788
Share premium 539 539
Merger and contribution premium 342,149 342,149
Revaluation reserve (236) (236)
Retained earnings 103,448 85,086
Group shareholders' equity 465,688 447,326
Non-controlling interests


Total shareholders' equity 465,688 447,326
Provision for employee retirement obligations and related benefits 3,560 3,442
Non-current provisions 526 514
Non-current financial liabilities 6,318 6,318
Deferred tax liabilities 6,432 6,283
Non-current liabilities 16,836 16,557
Trade payables 23,836 19,793
Current provisions 4,547 2,115
Current financial liabilities 12,378 12,204
Income tax payable 2,538 1,313
Other current liabilities 35,757 40,953
Current liabilities 79,057 76,378
Total equity and liabilities 561,581 540,261

Consolidated cash flow statement as of 30 June 2018

€ thousands     30 June


  30 June


Cash flow from operating activities
Group share of net income / (loss) 13,638 (8,890)
Share of earnings from equity accounted investments 8
Tax 3,394 4,582
Net financial result 398 827

Amortisation and depreciation charges

11,728 11,752
Change in provisions 2,620 (3,048)
Share-based compensation 976 1,391
Capital losses from disposal of assets 1,090 49
Financial (profits) / losses excluding interest (2) (385)
Operating cash flow before changes in working capital 33,842 6,286
Current income tax paid (2,418) (961)
Change in subsidies and R&D tax credit receivables (3,253) (3,585)
Change in working capital of operating activities (1,681) (13,375)
Change in deferred income 82 (315)
Net cash flow from operating activities 26,572 (11,950)
Cash flow from investing activities
Purchase of non-current assets (8,319) (4,653)
Acquisition of investments in consolidated undertakings, net of cash
Proceeds from sale of non-current assets 2,363 2,274
Change in working capital of investment activities (906) (2,234)
Net cash flow from investing activities (6,862) (4,613)
Free cash flow after investing activities 19,710 (16,563)
Cash flow from financing activities
Treasury shares transactions 48 374
Net financial interest received / (paid) (396) (441)
Repayment of bank overdrafts (8) (238)
Repayment of borrowings (5,368) (15,704)
Proceeds from borrowings 5,393 9,766
Net cash flow from financing activities (331) (6,243)
Change in cash and cash equivalents 19,379 (22,806)
+ Cash and cash equivalents – opening balance 50,849 71,262
-/+ effect of translation adjustment on foreign currency -
denominated cash
474 (811)
= Cash and cash equivalents – closing balance 70,702 47,645

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