Breakthrough Clinical Trials Launched by 2 LSE Stocks: Synairgen PLC and 4D Pharma Group PLC

  • May 26, 2020 BST
  • Team Kalkine
Breakthrough Clinical Trials Launched by 2 LSE Stocks: Synairgen PLC and 4D Pharma Group PLC

The disruptive Coronavirus chaos has yielded an opportunity for Pharmaceutical & Biotechnology industry and resulting into a blessing in disguise as numerous trials have been launched to come up with the potential vaccine and plausible solutions. Meanwhile, the British Government has considered every possible action to manage the economic disruption from extending mortgage payment holidays scheme, employee retention scheme, to increase the loan size for large businesses and the likelihood of negative interest rates.

Consequently, the London and European markets were in the bright spot (as on 26th May 2020, before the close at 2.20 PM GMT) and sentiments were upbeat through the following factors:

  • Prime Minister Boris Johnson shared a plan to reopen thousands of shops and shopping centres which were shut during the lockdown scenario.
  • The revival of economic activities also led oil price to surge with optimism over demand upturn.
  • As per the data from the Confederation of British Industry, retail sales slightly grew in May compared to a record low in April.

Considering the current market sentiments, we are going to discuss two LSE listed stocks from Pharmaceuticals & Biotechnology industry - Synairgen PLC (LON: SNG) and 4D Pharma PLC (LON: DDDD). As on 26th May 2020 (before the market close at 2.20 PM GMT), SNG and DDDD were trading at GBX 50.62 and GBX 45.38, reflecting a plunge of 0.75 per cent and 14.38 per cent, respectively against the close of last trading session. Today, SNG unveiled its full-year audited results for FY2019 and reported initiation of SNG001 trial. Similarly, DDDD also released its results for FY2019. Hence, it would be interesting to look through their respective full-year statements to make inference about the possible outlook scenario.

Synairgen PLC (LON: SNG) – Examining Potential COVID-19 Drug in Home Setting Post Reporting Annual Loss

Synairgen PLC is engaged in the discovery and development of drugs related to respiratory diseases. It is primarily focused on lung viral defence in COPD (Chronic obstructive pulmonary disease) and asthma. Currently, the Company is conducting a phase II trial of SNG001 (inhaled interferon beta therapeutic candidate) and SG015 (to evaluate the safety of SNG001 in COPD patients). The Company was founded by three professors of the University of Southampton - Donna Davies, Stephen Holgate and Ratko Djukanovic. It is listed on the FTSE AIM All-Share index and was admitted to the London Stock Exchange (LSE) on 26th October 2004.

(Source: Company Website)

Recent Significant Developments

  • 26th May 2020: The Group initiated the dosage of SNG001 in the home environment and expected to release the results of the study in July.
  • 26th March 2020: The Company completed the fundraising of £14.0 million in gross proceeds through 40,000,000 new Ordinary Shares at a price of 35 pence per share.

Financial Highlights - Made Good Progress in the Trial of the Wholly Owned Asset SNG001 in COPD

On 26th May 2020, the Company released its preliminary statement of audited results for the year ended 31 December 2019, with recruited steadily into the SG015 Phase II trial of SNG001 in patients with COPD (Chronic Obstructive Pulmonary Disease) and also investing in the supply chain to minimise the impact of long lead times in the event. Some additional highlights:

  • Led by the prevalence of COVID-19 in the community, the Group has paused the SG015 trial of SNG001 (inhaled interferon-beta 1a) in COPD patients, with 109 out of 120 patients recruited.
  • The SG016 (Clinical trial) study has progressed well.
  • With confirmed COVID-19, SNG is extending the SG016 study to patients in the home environment.
  • Synairgen raised GBP 14 million in March 2020 in a heavily oversubscribed equity issue to strengthen its balance sheet and fund its COVID-19 related activities.
  • For the financial year 2019, the research and development expenditure stood at GBP 3.46 million (FY18: GBP 3.23 million).
  • The loss from operations for FY19 was reported at GBP 4.82 million as compared with the corresponding period of the last year (2018: loss of GBP 4.13 million).
  • On 31st December 2019, the cash and bank deposits stood at GBP 2.45 million (31 December 2018: GBP 5.33 million).

Share Price Performance

(Source: Refinitiv, Thomson Reuters) - Daily Chart as of May 26th, 2020, before the market close

SNG’s shares were trading at GBX 50.95 on 26th May 2020 (before the market close at 2:01 PM GMT+1). Stock's 52 weeks High is GBX 78.00 and Low is GBX 5.50. Total outstanding M-Cap. (market capitalization) stood at approximately GBP 76.10 million.

Outlook

For SNG001, the Group will have 3 major clinical trials in the coming months: COVID-19 hospital-treated patients; the initial treatment of Coronavirus patients in the home setting; and COPD patients with regular seasonal viruses. Presently, the Company is working with manufacturers, which will scale up for demand in SNG001. The Company has been preparing for a busy winter and is well poised to complete its Phase II clinical trial. The company’s revenue from contracts with consumers for financial year 2019 remained nil. SNG is managing novel trials to develop the regulatory strategy and active on many fronts from designing as well as a supply chain for potential demand in the future.

4D Pharma Group PLC (LON: DDDD) – Drug Development Widened the 2019 Losses

Established in 2014, 4D Pharma Group PLC is a developer of Live Biotherapeutics and a MicroRx® (a proprietary platform). The Company has the following study in progress - BLAUTIX®, MRx0518, KEYTRUDA®, MRx-4DP0004. The Group has also signed a research partnership with Merck & Co., Inc. (MSD) to discover Live Biotherapeutics for vaccines. The Company is listed on the FTSE AIM All-Share index and was admitted to the London Stock Exchange (LSE) on 18th February 2014.

(Source: Company Website)

Recent Significant Developments of 2020

  • 21st May 2020: Thomas Engelen has resigned from his position of Non-executive Director, which will come in effect from 20th May 2020.
  • 11th May 2020: The clinical study of Phase I/II (PART A) of MRx0518, in combination with Keytruda® has been completed.
  • 20th April 2020: The Company’s MRx-4DP0004 (phase II trial) has been approved for commencement by the MHRA (Medicines and Healthcare products Regulatory Agency).

Financial Highlights - Adding Extensive Experience in Innovative Drug Development

On 26th May 2020, the Company provided the final results for the year ended 31 December 2019, with a successful year in which the Group had entered collaborations with new partners and made great progress in the clinic across multiple programmes. Additional points are stated below:

  • Net assets for the financial year 2019 stood at GBP 22.3 million as compared with the previous year (2018: GBP 45.8 million).
  • Including cash on deposit, the cash and cash equivalents decreased to GBP 3.8 million against the last year (2018: GBP 26.2 million).
  • Total comprehensive loss after tax for the financial year 2019 was GBP 23.7 million (2018: GBP 24.3 million).
  • In FY19, the adjusted loss per share increased to 40.81 pence (FY18: 36.17 pence), while basic and diluted loss per share stood at 36.75 pence (FY18: 36.17 pence).
  • Some operational highlights: positive early signals for MRx0518 in combination with Keytruda®; entered a research collaboration and options contract with MSD, which include a commitment to equity investment in the Company by MSD; launched Phase I/II study to assess safety and efficacy of MRx-4DP0004 in addition to standard maintenance therapy in poorly controlled asthma
  • Launched the third trial of MRx0518 in early January 2020.
  • After the period end, in February 2020, the Company accomplished a fundraise through the placing and a subscription for new ordinary shares with and by certain current & new investors, to raise aggregate gross proceeds of GBP 22 million.

Share Price Performance

 (Source: Refinitiv, Thomson Reuters) - Daily Chart as of May 26th, 2020, before the market close

DDDD’s shares were trading at GBX 46.25 on 26th May 2020 (before the market close at 2:05 PM GMT+1). Stock's 52 weeks High is GBX 131.00 and Low is GBX 23.50. Total outstanding M-Cap (market capitalization) stood at approximately GBP 58.03 million.

Outlook

The UK Health and Medical products Regulatory Agency has granted 4D expedited acceptance to start a Phase II study of MRx-4DP0004 in patients with COVID-19. The management has prioritised allocation of resources and capital to main programmes such as oncology and launch of Phase II clinical trial of an orally administered immunomodulatory LBP in COVID-19 in Q2 FY20. Moreover, the current study of Company stated that the high mortality rate of COVID-19 could be due to hyper-inflammatory response and cytokine storm syndrome caused by uncontrolled activation of the immune system. Hence, targeted immunomodulation might be proven beneficial for patients.

 

 


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