Drug discovery and development specialist Immupharma (LSE: IMM) is flying today, its share price up a thumping 24%. That’s almost doubled in less than a fortnight, rising from around 51p on 26 September to 96p today. I reckon it could have further to go.
Bought the pharm
I was looking at Immupharma over the weekend and clearly I was not the only one. Others were also digesting the company’s recent positive news and subsequent share price spike and decided there was more to come. The London-headquartered company, which has Swiss and French operations, aims to develop treatments for serious medical conditions with high, unmet medical needs and relatively low marketing and development costs.
Its share price spike began with publication of its six-monthly interim results on 27 September, which showed further progress on its lead programme Lupuzor, which promises a potential breakthrough compound for life-threatening autoimmune disease Lupus. It has trials across the US, Europe and Mauritius and has just initiated first regulatory submissions to the US Food and Drug Administration and the European Medicines Agency.
Capital move
Last week, it also announced it had completed its sharing agreement, which saw Lanstead Capital buying around £5m of ordinary shares in the firm. Immupharma chairman Tim McCarthy said the agreement should create long-term shareholder value and help it hit “key milestones within our lead programme Lupuzor, as we get nearer to reporting top-line Phase III results in Q1 2018”. The shares jumped even higher on the news.
But investing in companies like Immupharma will always be risky. One setback for Lupuzor and its share price could crash. It also has to shoulder R&D costs, which totalled £2.3m in first half 2017. It therefore made a £3m loss for the period, on top of £3.7m in H1 2016. Total assets now stand at £6.4m, up from £5.5m on 31 December.
However City analysts are optimistic, expecting six years of negative earnings per share (EPS) to reverse in 2018, hitting 9p, with the company finally swinging into profit to make an anticipated £12m. The best might still be to come, although more of that potential upside is now factored into today’s higher share price.
Rolling out the barrels
Eland Oil & Gas (LSE: ELA) is also spiking today, its share price up more than 5% at time of writing. The Nigeria-based producer also published positive half-yearly results at the end of last month, with total gross production more than doubling, from 429,627 barrels of crude oil to 954,728 million.
The £145m company has a current cash balance of $27.3m, strengthened by a successful £15.2m equity placing in June, and CEO George Maxwell hailed a “very positive” first half as production restarted and boosted cashflow, with the near-term drilling programme now fully funded.
EPS success
City analysts are rather bullish, forecasting EPS growth of a whopping 17,262% in full-year 2017, followed by another 199% in 2018. No wonder the share price is up 45% in a year, from 43p to today’s 64p. Lowly 2016 revenues of £2.37m are now forecast to hit £52.77m this year and £160.73m in 2018. If you reckon the oil price recovery has legs, Eland Oil & Gas could be a good way to play it.
