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4D Pharma yet to take off

The group is carrying out a number of trials over the next 18 months, but still has no revenue
October 2, 2017

Shares in 4D Pharma (DDDD) were marked down following release of half-year results in which progress on the clinical front was tempered by an 18 per cent decline in net assets, coupled with an increased earnings loss. It has been a slow road towards commercialisation, so a 10 per cent increase in net operating cash outflow wouldn't have set any alarm bells ringing, but 4D is moving into a clinical trial phase that will place a major drain on its cash resources.

IC TIP: Sell at 340p

4D has successfully completed the first clinical trial of a molecule found by its MicroDx drug discovery platform. Blautix – which has a single-strain bacteria at its core – is used as a treatment for irritable bowel syndrome (IBS) and will soon begin a second phase patient study. MicroDX has also proved effective at diagnosing patients with IBS based on the amount and type of healthy bacteria in their body – otherwise known as the microbiome. Later this year the company will make its first foray into cancer treatment with an in-man monotherapy trial.

4D PHARMA (DDDD)   
ORD PRICE:340pMARKET VALUE:£223m
TOUCH:335-350p12-MONTH HIGH:820pLOW: 220p
DIVIDEND YIELD:PE RATIO:na
NET ASSET VALUE:115p*NET CASH:£59.8m
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2016nil-5.5-7.1nil
2017nil-13.0-17.4nil
% change----
Ex-div:na   
Payment:na   
*Includes intangible assets of £14.6m, or 22p a share