Silence Therapeutics' (SLN) RNA interference (RNAi) collaboration with specialty pharmaceuticals manufacturer Mallinckrodt agreed in July should be "game-changing", according to chief executive David Horn Solomon. The deal provides the company with funds to continue to finance its research and development spending, with a $20m (£16.1m) upfront payment, $10m research and development payment, and a $5m equity investment with just over 5.06m shares purchased. Crucially, this brought the company’s cash balance to £36m at the end of August.
The agreement also provides Mallinckrodt with an exclusive worldwide licence for one pre-clinical product that targets a specific protein in the complement pathway (a system of proteins that interacts with pathogens such as viruses and bacteria to mark them for destruction), and an option for up to two additional assets with different complement protein targets. Analysts at house broker Peel Hunt called RNAi an “elegant therapeutic modality” with a discrete niche, especially for chronic conditions, between small molecules and gene editing and cell therapies.
Analysts at Peel Hunt expect an adjusted loss before tax of £17.6m in 2019 with a loss per share of 0.2p, narrowing to a £10.6m loss in 2020 with loss per share of 0.1p.
| SILENCE THERAPEUTICS (SLN) | ||||
| ORD PRICE: | 193p | MARKET VALUE: | £ 151m | |
| TOUCH: | 187-193p | 12-MONTH HIGH: | 224p | LOW: 40p |
| DIVIDEND YIELD: | NA | PE RATIO: | NA | |
| NET ASSET VALUE: | 35p* | NET CASH: | £11.5m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | nil | -9.79 | -12.4 | nil |
| 2019 | nil | -9.60 | -11.5 | nil |
| % change | - | -2 | -7 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £8.15m or 10p per share | ||||
