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Allergy Therapeutics tops up the coffers

A £10.6m cash injection will help fund the group’s final-phase clinical trial
September 26, 2018

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.

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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:25pMARKET VALUE:£156m
TOUCH:24-25p12-MONTH HIGH:40pLOW: 24p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:3.6p*NET CASH:£15.5m
Year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201442.01.10.2nil
201543.20.70.02nil
201648.5-12.1-2.3nil
201764.1-2.0-0.4nil
201868.3-6.9-1.3nil
% change+7---
Ex-div:na   
Payment:na   
*Includes intangible assets of £4.9m, or 0.8p a share