Firebrick Pharma (ASX:FRE) makes ASX debut in style, shares jump 160%

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Firebrick Pharma (ASX:FRE) makes ASX debut in style, shares jump 160%

Pharma company shares and stocks IPO of Firebrick (ASX:FRE)
Image source: © Lacheev | Megapixl.com

Highlights

  • Firebrick Pharma makes ASX debut after a successful IPO.
  • Shares of the pharma company were trading 160% higher as of 12:42 PM AEDT.
  • Firebrick raised AU$7 million through an initial public offering (IPO), which closed on 9 December 2021.

Firebrick Pharma Limited (ASX:FRE), a company developing a virus-killing nasal spray, debuted on the ASX on Friday in style. As of 12:42 PM AEDT, shares of the pharma company were trading 160% higher at AU$0.52 apiece as against its issue price of AU$0.20. As per the data available on the ASX, over 6.9 million shares have changed hands after its listing at 12:30 pm.

Firebrick raised AU$7 million through an initial public offering (IPO), which closed on 9 December 2021. The company issued 35 million shares at an offer price of AU$0.20 apiece to raise this capital.

Founded in 2012, the company's first nasal spray—Nasodine—is now in the final stages of development and testing. If approved by Therapeutic Goods Administration (TGA), Nasodine will be the first approved nasal spray medicine that targets the cause of the common cold and treats it where they start (in the nose), the company said.

The pharma company is also planning a COVID-19 phase-2 trial in South Africa in 2022 to assess Nasodine as a potential treatment for COVID-positive patients.

Also Read - Firebrick Pharma Limited IPO: How to invest in the healthcare stock?

The funds raised through the IPO will be used to support the ongoing clinical trials of the company and to fund the marketing and other operating costs.

When will Firebrick generate revenue?

Firebrick will start generating revenues if phase-3 trial of Nasodine becomes successful and TGA approves the drug. The company expects to generate revenues from Nasodine from as early as 2023. FRE’s ability to generate revenue is dependent on required regulatory approvals to sell.

What are the key risks in investing in Firebrick?

Firebrick may fail to generate revenues as early as 2023 if its future clinical trials get delayed or become unsuccessful. A failure to obtain the necessary regulatory approvals in Australia and in other countries to commercialise key products, and the commercial failure of these products are key risks in the business of the company that investors should consider before investing.

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  • Regulatory risks- Firebrick is subject to various laws and regulations including rigorous ones and others which it needs to satisfy.
  • Commercialisation risks- Firebrick has to be certain about obtaining IP rights on its medicinal compositions.
  • Risks on intellectual property- Firebrick shall rely on its ability to obtain and protect its intellectual property. A failure to develop and prosecute its intellectual can adversely impact on the operating results and financial position.
  • Competition risks- The pharma and biotech industries have great competition. Firebrick’s potential competitors may hold substantially greater resources and connects.
  • COVID-19 impacts- The impact of the COVID-19 pandemic, is global and might adversely affect the timing of clinical trials of Nasodine.

Also Read- Three bluechip ASX shares that can be explored in February

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