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Circassia Pharmaceuticals (LSE: CIR) announced its half-year results this morning, offering up a significant narrowing of losses after switching its primary focus from allergies to respiratory disease. The company revealed that for the six months to 30 June, revenues had increased by 65% to £18.3m, with losses shrinking to just £34.3m from £101.8m a year earlier.

A new lease of life

The Oxford-based speciality pharmaceuticals business sells its novel, market-leading NIOX asthma management products directly to specialists in the UK, US, and Germany, and in a wide range of other countries through its network of partners. The company has also recently established a promising collaboration with AstraZeneca in the US in which it promotes the chronic obstructive pulmonary disease (COPD) treatment Tudorza, and has the US commercial rights to late-stage COPD product Duaklir.

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Throughout 2017, Circassia has continued to build on the changes it began last year following the disappointing phase III results for its lead allergy product. Since then, the company has halted investment in the allergy field, significantly expanded its commercialisation platform, and completed a major commercial transaction with AstraZeneca. With a period of dramatic change behind it, Circassia now has a strong commercial infrastructure, growing revenues, advancing pipeline and a robust balance sheet.

All of which is good news. But the company’s shares have yet to recover from last year’s disappointing clinical trials. However, I have hope for the future. The change in focus and partnership with AstraZeneca makes me optimistic that this new lease of life can transform Circassia into a profitable business, and propel the share price back to where it truly belongs.

Poised for a comeback

Despite Circassia’s long-term potential, risk-averse investors may nevertheless steer well clear of what is essentially a small-cap pharmaceuticals business that has yet to prove it can turn a profit. Such investments are not exactly the bedrock of a solid retirement portfolio.

Perhaps a more comfortable option for growth-focused investors would be Hikma Pharmaceuticals (LSE: HIK).

But Hikma has had its challenges. The FTSE 250 firm’s share price has been knocked back in recent months with investors concerned about the intense levels of competition for generic drugs in the US. The impact has been dramatic, with  the shares now trading a whopping 57% lower than last summer’s peak of 2,676p.

Poised for a comeback?

Yet Hikma is much more than just a generic drugs firm, with its injectable and branded drugs businesses contributing 65% to overall group revenues during the first half of 2017. Geographical diversity should also help to offset fierce competition in the US. The group is a market leader in the Middle East and North Africa region, as well as having significant sales in Europe and the rest of the world. This geographical diversity should help to counter the effects of tougher competition across the pond.

With an uncharacteristically low price-to-earnings ratio of 15, I believe Hikma’s shares could be well-poised for a dramatic comeback.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended AstraZeneca and Hikma Pharmaceuticals. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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