Repeated fundraising rounds are inevitable in companies attempting to develop brand-new medicines. What’s crucial is the timing. Allergy Therapeutics (AGY) chose to tap the market after a slew of positive trial updates in July, meaning it had no trouble topping up its coffers by £10.6m.
The fundraising is reflective of Allergy’s significant research and development (R&D) obligations as it seeks to launch the first long-acting, aluminium-free treatment for grass allergies in the US. A successful Phase II study has paved the way for a final trial in a larger population, which is expected to begin in the second half of the 2019 financial year and will widen annual pre-tax losses to £9.3m, from £6.9m in 2018, according to Panmure Gordon.
The success (or failure) of this trial and the rest of Allergy’s extensive pipeline of new medicines will have a far greater impact on the value of the company than the financial performance of its European commercial division. That’s why investors were unmoved by a decent set of numbers in the year to June 2018. Extract the R&D costs and operating profits rose 26 per cent to £9.3m, despite the mild European pollen season, which constrained like-for-like revenue growth to 3.5 per cent.
ALLERGY THERAPEUTICS (AGY) | ||||
ORD PRICE: | 25p | MARKET VALUE: | £156m | |
TOUCH: | 24-25p | 12-MONTH HIGH: | 40p | LOW: 24p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 3.6p* | NET CASH: | £15.5m |
Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 42.0 | 1.1 | 0.2 | nil |
2015 | 43.2 | 0.7 | 0.02 | nil |
2016 | 48.5 | -12.1 | -2.3 | nil |
2017 | 64.1 | -2.0 | -0.4 | nil |
2018 | 68.3 | -6.9 | -1.3 | nil |
% change | +7 | - | - | - |
Ex-div: | na | |||
Payment: | na | |||
*Includes intangible assets of £4.9m, or 0.8p a share |