The Alternative Investment Market (AIM) might carry some risk, but it’s home to some companies that have rewarded their shareholders massively over the past year. But can they keep on heading up?
Shares in Tiziana Life Sciences (LSE: TISL) have soared by a staggering 348% over the past 12 months. So what does it do?
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It’s a small biotechnology company with a market cap of under £180m, but it’s working on something that has enormous potential — novel therapeutics for cancer, with a focus on late-stage metastasis. The firm’s first research goal is to develop a drug to treat metastatic breast cancer, which affects around 12,000 people a year in the UK alone.
Tiziana is still in the net investment phase, having raised £8.3m in the first half of 2015 through a share placing and the issuing of a convertible loan note, and of that there was approximately £7m in cash left at the halfway point in June.
If you invest now you’ll be taking a big gamble on a success coming through the firm’s pipeline, but any early signs of a breakthrough could turn Tiziana into a tasty takeover target.
My next pick is 4d Pharma (LSE: DDDD), whose shares are up 143% in the past year. Again it’s a pharmaceuticals/biotechnology firm, this time tackling things like Irritable Bowel Syndrome and Crohn’s disease using an approach based on live biotherapeutics (that’s living bacteria, rather than dead chemical stuff).
Promising research results have been behind the share price surge, though it has gone a little off the boil with a 24% drop since May’s peak — but with trading volumes being relatively small we should expect some volatility.
The firm’s first-half update again focused on cash generation, with a placing in February raising £34.3m — and at the halfway stage, the coffers contained £61.5m in cash and equivalents. Nobody knows when profits will arrive, so again you’d be gambling on it happening before the cash runs out.
My third for today, which takes technology in a different direction, is Pure Wafer (LSE: PUR). It’s the smallest of the three, with a market cap of just £51m, but its shares have stormed up 213% in 12 months. As its name suggests, the company bills itself as “one of the leading global providers of high quality silicon wafer reclaim services“, and counts a number of the world’s big semiconductor firms among its clientele.
The company suffered a “catastrophic” fire at its Swansea wafer reclaim facility last December, but by May this year the firm had reached a satisfactory agreement with its insurers in the shape of a cash settlement with the Swansea facility not to be rebuilt — it’s since been sold off for redevelopment, along with the firm’s 99 year lease on the land.
Forecasts can’t make much sense at the moment, but the firm says that demand for its wafer reclaim services in the US remain strong, and it’s a market that can only grow.