It was as,
Unsurprisingly, that bombshell in March knocked the shares hard and led to an immediate restructuring. All 100 plus staff may be made redundant as the company becomes a cash shell. Rights to other drugs seem to have limited value apart from Juvidex, which reduces redness after operations to reduce the effects of sunburn, skin waxing, laser peels and dermabrasion (skin smoothing to remove tattoos, moles and fine wrinkles). The latest profits include a final payment from co-investor Shire, made in 2007.
So what went wrong at Renovo? The answer is that it went for the big hit and missed. Juvidex may be sold to a cosmetics company within perhaps 18 months.
Broker Panmure Gordon values the various parts of Renovo at £42m or 22p a share.
|ORD PRICE:||15.25p||MARKET VALUE:||£28.9m|
|TOUCH:||15-15.5p||12-MONTH HIGH:||79p||LOW: 14.125p|
|DIVIDEND YIELD:||nil||PE RATIO:||15|
|NET ASSET VALUE:||21p||NET CASH:||£44.4m|
|Half-year to 31 Mar||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
It would be great to see more UK biotech companies make it to the point where cash flow makes them less reliant on regular institutional cash injections. But Renova isn't going to be one of them. Reflecting the cash pile, the shares are fairly priced.
Last IC View: Buy, 56p, 20 December 2010