Faron (LON: FARN) & Novacyt (LON: NCYT) shares. Should you buy them now?

Highlights 

  • Faron Pharmaceuticals Oy share prices suffered a sharp correction of around 7 per cent.
  • For the H1 2021 ended 30 June 2021, Novacyt recorded revenues of £94.7 million, up by over 50% compared to £63.3 million in H1 2020.

Some of the UK pharma stocks are garnering considerable investor attention. They offer good return driven by news about new drug discovery and development, successful clinical trials, and product launches intended to tackle the coronavirus. Some of the biggest share price gains in recent times belong to companies that have been actively engaged in developing and manufacturing coronavirus testing and treatment technologies for use in hospitals or the general public.

Here we take a look at two such pharma stocks that offer a high return to shareholders.

Faron Pharmaceuticals Oy (LON: FARN)

Faron Pharmaceuticals Oy (LON: FARN) is immunotherapy-focused clinical-stage biopharmaceutical company. The Finland-based company is engaged in drug discovery and development company. On 25 August 2021, it commenced the Phase II/III HIBISCUS trial to assess Traumakine’s efficacy as a first-line treatment for acute respiratory distress syndrome (ARDS) and COVID-19 patients admitted in hospitals. Successful clinical trials have also been conducted on the company’s Bexmarilimab demonstrated “compelling antitumour activity” in multiple advanced solid tumour types.

Faron Pharmaceuticals registered cash balances of €7.0 million as of 30 June 2021 (2020: €11.6 million).

The shares of Faron Pharmaceuticals were down by 6.70 per cent to trade at GBX 452.50 as of 11:55 AM. Though they have given a year-to-date (YTD) return of 78.40% to shareholders, and the market capitalisation stood at £244.72 million as of 26 August 2021.

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Novacyt SA (LON: NCYT)

Novacyt SA is a global company that specialises in clinical diagnostics. Primerdesign, the wholly-owned subsidiary of Novacyt, secured a new supply contract for ‘PROmate’ COVID-19 tests to the NHS under the Public Health England (PHE) National Microbiology Framework. These tests can be conducted on the company’s q16 and q32 PCR instruments.

For the H1 2021 ended 30 June 2021, Novacyt recorded revenues of £94.7 million, up by over 50% compared to £63.3 million in H1 2020. Of the total revenue, £53.95 million emanated from overseas sales and growing demand for private testing in the UK.

The shares of Novacyt SA were down by around a per cent at GBX 406.70 as of 11:55 AM, though they have given a return of 40.64% in the last one year to shareholders, and the market capitalisation stood at £289.57 million as of 26 August 2021.

CONCLUSION:

Investors keen on diversifying their portfolio can include pharma stocks, especially those focusing on offerings meant to tackle the COVID-19 pandemic. High demand for these products is expected to drive revenues and profits, enabling companies to share earnings with shareholders in the form of attractive dividend payouts.

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