Allergy seen profitable in 2009 on hay fever vaccine

LONDON (Reuters) - Loss-making allergy vaccination firm Allergy Therapeutics (AGY.L: Quote, Profile, Research) boosted its market value by a third on Wednesday after its main hay fever vaccine showed positive test results, raising hope it would be profitable within a year.

Short-term sales of related products will receive a boost and the company will seek approval to sell the vaccine around Europe by the first quarter of 2009, Chief Executive Keith Carter told Reuters.

Allergy, which has made losses since its initial share listing in 2004, could turn profitable in the next fiscal year starting July, he added.

Its key 'Pollinex Quattro' hay fever vaccine accounts for 40 percent of total sales.

Allergy shares surged to 38.5 pence on the test results, valuing the company at around 32 million pounds ($62.24 million). But they are a still a fraction of their Feb 2007 peak of 145 pence.

Operating profits have been offset by heavy research and development (R&D) costs, Carter said. The company will probably spend 18 million pounds on R&D this fiscal year, but such spending could fall to a third of that in the next year.

Carter said R&D, the "big swing factor on profits," has cost the firm 50 million pounds since 2004.

"In our March note we suggested that this data would be a key event for share price performance in the business," Landsbanki analyst Elizabeth Klein said in a note.

"We continue to suggest that this data will increase confidence in the company's products and therefore retain our Buy recommendation and 66 pence fair value.

(Reporting by Hsu Chuang Khoo; editing by Rory Channing)