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ReNeuron widens clinical trials

The biotech minnow has received its first licensing payment from China's Fosun Pharma
ReNeuron widens clinical trials

Biotech stocks such as ReNeuron (RENE) should sit at the outer edge of risk profiles, with the prospect of highly promising technologies tempered by uncertainties linked to the funding imperative.

IC TIP: Buy at 138p

The former comes in the shape of its hRPC (human retinal progenitor cells) stem-cell therapy candidate, while the latter has been aided by payment of half of the £12m upfront fee from Fosun Pharma for the potential commercial exploitation of the company’s therapies in China.

ReNeuron’s ability to meet its clinical objectives should be helped by the decision to appoint Professor Robert MacLaren, Dr Sally Temple and Dr José-Alain Sahel to its Scientific Advisory Board, but time is of the essence. Although clinical results have been positive (“early efficacy signals are very encouraging"), management has taken measures to shorten the overall time to market approval application for the hRPC therapeutic candidate. It is also intent on accelerating patient recruitment and broadening the scope of the US Phase 2b clinical trial of its CTX cell therapy candidate in chronic stroke disability.

Half-year operating costs were up by 17 per cent to £11.8m, while research and development (R&D) expenditure increased by 22 per cent to £9.23m, reflecting costs incurred in progressing the PISCES III clinical trial. 

Stifel gives a target price of 690p a share.

RENEURON (RENE)   
ORD PRICE:138pMARKET VALUE:£44m
TOUCH:134-140p12-MONTH HIGH:335pLOW: 45p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:64pNET CASH:£20.3m
Half-year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2018*0.03-6.82-16.9nil
20196.03-5.14-12.3nil
% change+22,233---
Ex-div:-   
Payment:-   
*Restated in accordance with lease liability accounting standards