A COUNTY Durham medical firm says it is targeting a “higher quality of earnings” after cutting debt in a £1.75m restructuring deal.

Quantum Pharma has offloaded its Biodose Services division to HealthNet Homecare.

The move comes after bosses admitted the operation, once hailed for having the potential to save the NHS millions of pounds, could be sold in cost-cutting measures.

Officials previously said Biodose would need significant investment to get into the homecare sector, which Quantum no longer sees as a fundamental area.

The sale also follows a period of “slower penetration” across some of Quantum’s products, which saw the company, based in Burnopfield, near Stanley, launch a £15m shares fundraising drive, axe the unprofitable drugs-making NuPharm endeavour and cancel some development programmes.

Chris Rigg, chief executive, said the deal for Biodose will mean the scrapping of Quantum’s medication adherence division and allow greater focus upon its core niche and specials operations.

The former of those two ventures recently launched new treatments for vitamin D deficiency and type 2 diabetes, while the latter has supply agreements with AAH Pharmaceuticals, Bestway Panacea Healthcare and Phoenix Healthcare Distribution.

Mr Rigg, who said Biodose Services was expected to make only a “modest” profit this year, said: “The sale positions Quantum as a simplified and focussed pharma business with a higher quality of earnings.

“It is particularly pleasing that we have been able to demonstrate a quick path to profitability for Biodose Services and exit it to a buyer who can bring greater emphasis to that business.

“The effect (of the sale) on the group’s balance sheet is positive through a reduction in net debt and it also improves gross and adjusted margin by eliminating low margin turnover.”

According to Quantum’s latest annual financial results for the year to January 31, which were revealed last month, group revenues were up 28 per cent on a year ago at £88.8m, despite a statutory operating loss of £9.8m owing to its previous overhaul.

Net debt was down from £24.6m to £13m in the period, with gross profit flat at £25.9m.

Speaking at the time, Mr Rigg said: “Our product pipeline holds significant value potential, the group is well-established in the UK and we are seeking to extend into other geographies by broadening our network of international partnerships.”

Quantum employs hundreds of people at its Burnopfield base, which is known for supplying medicines capable of responding to unique prescriptions and has a vast programme of more than 30,000 goods that includes methadone reefers and vitamin deficiency treatments.