Since last March's IPO, Redx Pharma (REDX) has had a "transformational year", according to chairman and industry veteran Dr Frank Armstrong. Unfortunately, this has not been reflected in the drug developer's shares, which sit at a steep discount to the 85p listing price. The reason, chief executive Neil Murray believes, is the poor liquidity and low trading volumes common to the alternative investment market.
A flurry of strong news before the summer may also have led to early exuberance, although announcements have hardly soured since then. Redx now has one MRSA and two oncology candidates in formal pre-clinical development, and has progressed its stem-cell pathway inhibitor into human clinical trials. There are now 15 programmes in development, although Mr Murray admits "you can't force the newsflow out of the science".
Licensing news would particularly help, and could be on the way. Management plans to secure further commercial partnerships this year, describing "encouraging discussions… regarding future collaborations".
Prior to these results, house broker Shore Capital was forecasting earnings per share of 0.2p in the 12 months to September 2016, against a loss of 8.1p last year.
REDX PHARMA (REDX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 58p | MARKET VALUE: | £37m | |
| TOUCH: | 56-59p | 12-MONTH HIGH: | 126p | LOW: 57p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 11.8p | NET CASH: | £9.4m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014* | - | -4.3 | -7.6 | nil |
| 2015 | - | -8.8 | -14.1 | nil |
| % change | - | - | - | - |
Ex-div: nil Payment: nil *Pre-IPO figures, which exclude £15m fundraising. Pro forma EPS for 2014. | ||||
