A MEDICAL firm is launching £15m expansion plans as it seeks to surmount profit worries.

Quantum Pharma has revealed a proposed fundraising through millions of shares.

The move comes after the company warned performance in the latter part of its financial year will be “materially below market expectations.”

The firm, based in Burnopfield, near Stanley, County Durham, says it has been affected by “slower market penetration” across some of its products.

Known for supplying medicines capable of responding to unique prescriptions, Quantum has a vast programme of more than 30,000 goods, which include methadone reefers and vitamin deficiency treatments.

It has also introduced the Mucodis range aimed at easing side-effects of cancer treatment.

However, earlier this month, officials issued a warning, adding drug-making operation NuPharm, which Quantum only bought last year, faces closure after accruing losses.

Chris Rigg, the business’ new chief executive, said its fundraising, which is subject to shareholder approval, would provide greater freedom to grow operations.

He added: “The board believes the net proceeds of the placing will reduce the group’s net debt to a more appropriate level for a business of Quantum’s type and size.

“The proposed placing will (help) better position the group to deliver its growth potential in the coming years.”

Speaking earlier this month, Mr Rigg, who has taken over from Andrew Scaife, said he was confident Quantum, which employs in excess of 200 people in Burnopfield, would rebound.

He said: “The early second-half indications are not as promising and the board believes sales and revenue assumptions for (some) products are no longer deliverable.

“More conservative assumptions are required, which reflect lower or slower market penetration, or greater price competition and an overall lower sales build.

“The performance will be materially below market expectations, however, the board is confident continuing growth opportunities available remain substantial.”

Mr Rigg added NuPharm’s struggles were regretful, adding “it would take unacceptable further cash losses and time to try to address the issues.”

According to Quantum’s latest half-year financial results, revenue had increased to £42.8m, from £34.3m a year ago, and gross profit was steady at £13.3m.

However, operating profit was down from £3.2m to £1.2m and pre-tax profits were lower at £800,000.

Earlier this year, Quantum launched a treatment for gastric sores.

The company says its Glycopyrronium Bromide product will bring ease to patients suffering from stomach and small intestine peptic ulcers.

Its Mucodis range includes a mouthwash to alleviate sores caused by chemotherapy.