Full-year results from 4D Pharma (DDDD) demonstrate its recent transition to a clinical stage biotech company. The initiation of human drug trials in 2016 - which are far more expensive than trials on animals - sent research and development costs up more than a fifth to £10.2m, meaning operating losses widened from £10.5m in 2016 to £12.3m in these numbers. The company's cash position has also taken a hit, dropping by £16.6m to £68.8m.
But for all its expenditure, drugs progress remains uninspiring. The company's most advanced treatment is a single-strain bacteria called Blautix, which has proven in an early-stage clinical trial that it has the potential to alter the microbiome of patients with irritable bowel syndrome (IBS). The company also has a platform - MicroDX - which it claims can help diagnose patients with IBS based on their metabolite profile. But the disorder is pretty well served by over-the-counter medicines, which makes it more difficult to forecast big returns on these products for 4D Pharma.
It's therefore perhaps unsurprising that some investors - lulled into the growth story when 4D joined Aim three years ago - have lost patience. The company's share price has fallen from highs of 1,012p in early 2016 to its current level.
4D PHARMA (DDDD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 323p | MARKET VALUE: | £209m | |
| TOUCH: | 312-330p | 12-MONTH HIGH: | 930p | LOW: 290p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 133p* | NET CASH: | £68.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 20.0 | neg | na | na |
| 2013 | nil | -1.1 | na | na |
| 2014† | nil | -2.4 | -4.8 | nil |
| 2015 | nil | -10.1 | -12.6 | nil |
| 2016 | nil | -11.7 | -15.2 | nil |
| % change | - | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £14m, or 22p a share †Period from 10 January 2014 | ||||
