The company is focused on discovering and developing peptide-based therapeutics. Its flagship candidate is Lupuzor (P140), a treatment being developed for lupus and potentially other autoimmune conditions. The company briefly caught fire in late 2017 and early 2018 when excitement over Lupuzor was running hot. But everything came crashing down in April 2018, when the drug failed a pivotal Phase 3 trial. The shares promptly collapsed by 75%, and investor confidence evaporated.

Over the following years, the stock slid further, drifting below 2p as little progress was made. But this month, things suddenly changed.

Shares in the stock have soared from around 2p to over 10p – that’s a staggering 530% increase in a matter of weeks. In fact, this has made it one of the best performers across global stock markets in September.

What’s behind the surge?

ImmuPharma is still a tiny company, valued at just £50.78m today, but it has managed to grab the market’s attention once more. Its revenue remains at zero, as Lupuzor isn’t yet approved for commercial sale. The big news is that it’s pressing ahead with a fresh Phase 3 trial in the US, this time in partnership with Avion Pharmaceuticals.

And in late August, the company filed a new patent application for Lupuzor. Management describes the treatment as an ‘immunormalizer’ – a potential diagnostic and therapeutic approach for a wide range of autoimmune diseases. If granted, the patent could provide 20 years of commercial exclusivity. Even more striking, the company believes the therapy could have potential applications in up to 50 different autoimmune conditions.

That announcement briefly sent the market cap surging to nearly £90m, before settling back around current levels.

Is it worth considering?

This is where investors need to tread carefully. Drug development is inherently risky, and the biotech sector is notorious for creating dramatic winners and losers. A positive clinical trial result can transform a tiny company overnight. But one setback can wipe out years of progress and shareholder value. ImmuPharma itself is proof of this – the collapse in 2018 shows just how brutal late-stage trial failures can be.

Financially, the company isn’t in dire shape. At the end of the first half of 2025, it reported short-term assets of £1.5m against liabilities of £1.24m. Cash and equivalents stood at around £400,000, and it carries no debt. Net income has improved in recent years too, moving from a loss of £8.17m in 2021 to a profit of £2.48m in 2024.

Still, this remains a tiny operation with limited resources compared to larger pharmaceutical players.

For that reason, I think ImmuPharma is a stock that should only be considered as a speculative small allocation within a much larger portfolio. If the new patent and trial results pan out, the rewards could be spectacular. But until more concrete data emerges, there’s no way of knowing whether this resurgence is sustainable.

For now, it’s a fascinating example of how fast fortunes can change on the stock market – especially for penny stocks.

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This time around I am discussing another couple of medicine marvels outside Britain’s elite index that could make you a fortune. Step forward ImmuPharma (LSE: IMM) and UDG Healthcare (LSE: UDG).

Bolt-on beauty

UDG — which provides clinical, commercial, communications and packaging services to the healthcare sector — pricked the ears of growth hunters earlier this week after it announced that earnings per share are likely to grow between 18% and 21% in the current fiscal year.

Acquisition activity has proved a significant sales mover in recent times, building the company’s service capabilities and expanding its scope from just a UK-centred business into a truly global giant. And as a result UDG said that operating profits at its core Ashfield division were “significantly ahead” year-on-year during the first fiscal quarter ending December 2017.

UDG’s promising profits outlook is roughly in line with broker estimates that are suggesting a 23% earnings improvement in the 12 months to September 2018. And this monster rise is not expected to be a flash in the pain either, as in fiscal 2019 the bottom line is expected to swell by an additional 11%.

The FTSE 250 firm may be a expensive pick on paper, rocking up on a forward P/E ratio of 25.4 times. However, in my opinion this heady rating is a fair reflection of UDG’s blockbuster profits outlook.

Indeed, UDG affirmed last week that it “remains active from a corporate development perspective,” with its “strong balance sheet [leaving] it well placed to execute further strategic acquisition opportunities as they arise,” suggesting that further bolt-on buys are just around the corner. UDG’s rising global and strategic footprint leaves it well placed to benefit from growing demand for healthcare products in the years to come.

Promising pipeline

ImmuPharma’s road to earnings growth is expected to keep making sterling progress too, although the company is expected to remain mired in the red for a little while longer. Losses of 4.54p per share in 2016 are expected to have narrowed to 3.5p last year, and to improve still further to 2p in the present period.

The AIM-quoted business is finally expected to burst into the black in 2019, when analysts say earnings of 3.4p per share will be generated.

ImmuPharma’s share price has detonated since the start of September thanks to a flurry of good news surrounding its Lupuzor lupus treatment, the stock striking record peaks around 190p per share at the turn of the year. Market demand has cooled since then but, with Phase III testing of the flagship drug now complete and results due in the current quarter, glass-half-full investors may see this as a fresh opportunity to get in before the herd.

Of course drugs development is a highly risky venture and success at the lab bench is never guaranteed. However, testing of ImmuPharma’s potential blockbuster product has so far been encouraging and, with the firm having successfully raised £10m this month through a share placing, the business has extra financial firepower to bolster its position in medical areas outside lupus as well.

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Blockbuster potential

Over the last three months, shares in the AIM-listed company have climbed more than 200% in value as anticipation grows over the outcome of a Phase III clinical trial for Lupuzor — its 100%-owned potential treatment for Lupus.

Approximately five million people are believed to suffer from the chronic and potentially life-threatening autoimmune disease that can be a notoriously difficult to treat. In the last 50 years, only one therapy — GlaxoSmithKline‘s Benlysta — has been approved for use, despite its questionable efficacy and serious side-effects. In 2015, the drug achieved sales of over $400m. By 2020, this figure is expected to rise to $1bn.

Positively, data from Lupozor’s Phase IIb trial indicated that ImmuPharma’s treatment — which modulates rather than blocks the immune system — was both effective and safe. Moreover, the effectiveness of Lupuzor increased even after the three-month trial’s conclusion. Investors will be hoping that the 52-week, randomised and double-blinded study currently in progress (involving patients in the US, Europe and Mauritius) yields similar results.

In its most recent update on 21 December, the company revealed that all 200 participants had now received the full 12-month dosage and that the “robust safety record” shown in earlier trials continues to be seen. According to Chairman Tim McCarthy, the company looks forward “with continued confidence” to reporting on top-line results in Q1 of next year. 

In the event of a positive outcome, ImmuPharma will then seek to exploit its Fast Track designation and push for approval from the Food and Drug Administration (FDA). Once received, the company would then be free to seek out a global licensing deal for taking Lupuzor to market or — perhaps more likely — consider takeover bids by deep-pocketed pharmaceutical giants at a price befitting its blockbuster potential. Given the suggestion that it could be used in the treatment of other diseases, the price could easily be in the billions of pounds. Right now, ImmuPharma’s market cap is a little over £200m.

Tempted? If so, it’s vital to consider the flip side of this investment.

A word of warning

Despite the encouraging outcomes of previous trials, the possibility of the drug failing to impress still remains. Plenty of highly promising treatments have disappointed at the last hurdle, resulting in significant capital losses for investors. Unless you’re willing to embrace this level of risk, Immupharma shouldn’t even make it on to your watchlist, let alone into your portfolio.

That’s why — as a holder of its stock — only a small proportion of my capital is invested in the company. This money can be lost. I might grumble and curse but — thanks to a degree of diversification — I won’t lose my shirt.  

That said, if — and it remains a sizeable ‘if‘ — Lupuzor proves effective (or at least more efficacious than Benlysta), I’m confident that ImmuPharma could generate huge wealth for investors in a very short time period.

No investment is devoid of risk but only you can decide whether this is one worth taking.

The post This promising small-cap stock could be a millionaire maker in 2018 appeared first on The Motley Fool UK.

Exceeding expectations 

Revenue climbed 19% to just over £20m in the year to the end of June, with pre-tax profit coming in 24% higher at £4.1m. According to CEO Paul Swinney, these numbers exceeded both market and management expectations. 

Much of today’s good news can be attributed to the company’s strong performance overseas. Having soared 43% to £9.6m over the reporting period, international sales now represent almost half of the Snailwell-based small-cap’s total revenue. While a proportion of growth can be explained by favourable currency movements, Tristel’s decision to acquire its Australian distributor has clearly done no harm at all to its top line.

Given that the company is now on the cusp of making huge strides in the North American market, having recently made its first regulatory submission, I think there could be a lot more good news coming for holders in 2018. While some investors were clearly disappointed by the recent announcement that there would be a delay to the approval timetable, Tristel’s management remain unfazed with first sales still expected in the next financial year. This, combined with recent investment in Mobile ODT (which connects point-of-care diagnostic devices to smart phones), not to mention the company’s net cash position (£5.1m) and lack of debt, make me very bullish on the £126m cap’s future.

So, no downsides? Not quite. The huge potential for increasing sales of the company’s chlorine dioxide formulation means that Tristel’s shares are now very expensive to buy and, some would say, priced to perfection. Based on earnings per share of 8.06p over the last year, the company’s stock has a trailing price-to-earnings ratio of 35. Whether that’s a price worth paying is up to you.

Multibagger in the making?

Tristel isn’t the only small-cap stock with a very promising outlook. Another company that’s caught my attention recently has been specialist drug discovery and development business ImmuPharma (LSE: IMM). Based on recent share price performance, it seems I’m not alone. Shares have pretty much doubled from the 50p mark reached one month ago as expectations continue to build surrounding Lupozor — the company’s key drug designed to tackle Lupus, the potentially life-threatening auto-immune disease. With all patients having passed through the six-month stage of testing, it now expects to report top-line results from its Phase III trial in Q1 2018. The fact that the company has already begun to prepare regulatory submissions suggests that management is already confident of a successful outcome. 

Aside from this, interim results in late September revealed the company’s finances to be in good order with net assets of £6.4m by the end of the reporting period. While this continues to be a lossmaking business, research and development expenses are slowly reducing and the £4.1m fundraising in March should give the £129m cap more than enough cash to play with going forward.

A riskier play than Tristel? Sure. Nevertheless, if results from the aforementioned trial go the company’s way, the recent increase in ImmuPharma’s valuation could be just the beginning. 

The post These stellar small-cap stocks could be good for your wealth appeared first on The Motley Fool UK.

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.

The post Why I’d still buy this growth stock even after today’s 20% spike appeared first on The Motley Fool UK.

Share price trouble is part and parcel of investing in pharmaceuticals and the Cambridge company has been no stranger to this in recent months. It took a dive in July after trialling showed its Imfinzi drug had failed to meet its endpoints, in fact revealing that it was no better at stemming lung cancer growth than traditional chemotherapy.

As if this wasn’t problem enough, the ongoing battle with patent losses was underlined by news that revenues in the US continue to be hit heavily by exclusivity losses on its Crestor and Seroquel XR treatments. This caused global turnover at its Product Sales division to tank 11% in January-June to $9.78bn.

Newsflow has been more promising since then, however, with it announcing earlier this month that its Phase III PACIFIC trial showed that Imfinzi had illustrated an improvement in progression-free survival in patients by more than 11 months. The oncology treatment is still seen by many as a terrific revenues spinner in future years, but this is just one potential star in the company’s bubbling pipeline.

A star for patient investors

Development setbacks in the pharmaceuticals industry arguably make the likes of AstraZeneca poor choices for those with a low risk tolerance, with patchy R&D results often leading to a fortune in lost revenues and extra lab costs.

Having said that, the revenues opportunities created by rising healthcare investment across the globe are vast, and with AstraZeneca zoning in on fast-growth areas like respiratory and oncology treatments, it is putting itself in the frame for exceptional profits growth ahead.

The City expects the company to endure some earnings woe in the near term with an 11% bottom-line decline currently predicted for 2017. But the East Anglian firm is expected to get firing again from next year, a modest 1% rise being predicted at the moment.

While far from spectacular, current figures leave the company trading on a forward P/E ratio of 17.2 times, very decent value in my opinion given the potential for explosive earnings growth. And with AstraZeneca also sporting giant dividend yields of 4.3% and 4.4% for this year and next, I reckon the firm is a great buy right now.

On the right track

Immupharma (LSE: IMM) is another drugs developer I believe offers plenty of investment opportunity.

The company’s share price rose 4% on Wednesday after the release of an encouraging market update. It advised: “The first half of 2017 saw the continued progression of our lead program Lupuzor, for the treatment of lupus, through significant milestones in its pivotal Phase III trial.” All patients had passed through the six-month stage, while just over a quarter had completed the full 12 months of the study.

Accordingly Immupharma announced that it was preparing the relevant regulatory papers for the US Food and Drug Administration and the European Medicines Agency. It hopes to have Phase III testing on Lupuzor completed by quarter one of 2018.

City analysts are forecasting a positive outcome and they expect Immupharma to finally break into the black in 2018 with earnings of 9p per share. With the company subsequently dealing on a corresponding P/E ratio of 5.9 times, I reckon it could be considered too cheap to miss at the moment.

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Billion dollar potential?

Small-cap pharmaceutical firm ImmuPharma (LSE: IMM) hopes to develop a new treatment for lupus. The company’s Lupuzor product is currently in a phase III trial, with results expected early in 2018.

ImmuPharma believes that Lupuzor could have an addressable market “with the potential for multi-billion dollar sales”, based on the demand for, and pricing of, existing treatments.

If the Phase III trial is successful, ImmuPharma will hope to find a larger partner to fund the commercial development of Lupuzor. If this happens, shareholders could enjoy a big payday.

However, the reality is that many of these experimental medicines don’t work. Although ImmuPharma has backing from fund managers at both Legal & General and Aviva, these managers’ shareholdings are likely to account for perhaps 1% of their portfolios. If things go badly, the resulting loss will be small relative to the value of the portfolio.

What next?

The firm has no revenue and had net cash of just £1.5m at the end of 2016. Its market cap of £72m is mostly based on the hoped-for success of the Lupuzor trial. If the trial isn’t successful, I’d expect the share price to collapse.

In my opinion, ImmuPharma is a binary bet at this point. If things go well, the shares could rise. But if the trial isn’t a success, then the stock could easily lose 50% of its value. If you hold the shares, I believe you need to ask yourself whether you’d be comfortable with a loss of this size.

If not, then it’s worth remembering that ImmuPharma has risen by 50% over the last six months. Now might be a good time to take some money off the table.

A good company at the wrong price?

Choosing good companies to invest in isn’t always enough to guarantee a profit. It’s important also to make sure that the price you pay for the stock is low enough to make further gains likely.

In the case of bookmaker Paddy Power Betfair (LSE: PPB), I’m not sure that’s true. This does appear to be a good company. The combined group’s revenue rose by 18% to £1,551m last year, while its underlying operating profit was 44% higher, at £330m.

Underlying earnings per share are expected to rise by 20% to 402p this year and by a further 12% to 450p in 2018. The problem is that most of this good news already appears to be reflected in Paddy Power Betfair’s share price.

The stock trades on a trailing P/E of 24, with a 2017 forecast P/E of 20. The prospective dividend yield of just 2.5% is below average for this sector. Although dividend growth has averaged 13% since 2011, if earnings growth slows as expected, then I’d expect dividend growth to slow too.

Paddy Power Betfair’s share price has fallen by 10% over the last year. Given the outlook for slowing earnings growth, I think the shares could fall further before bottoming out. I’d steer clear for now.

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Despite this concern about house prices, Purplebricks continues to move higher and has now recorded share price gains of 45% since the turn of the year. However, the scope for further gains could be somewhat limited. Certainly, there is a major opportunity for web-based estate agencies such as Purplebricks to encroach on traditional estate agency business. But with Purplebricks trading on a forward price-to-earnings (P/E) ratio of around 44, it appears to lack a margin of safety.

With the EU referendum just around the corner, house prices set to fall and interest rates likely to rise over the medium term, such a high valuation may cause investment returns from Purplebricks to disappoint.

Also rising today are shares in Immupharma (LSE: IMM). The drug discovery and development company is up by 9% today and this takes its share price rise to 46% in the last week after it announced that it has made progress with its development of a treatment to fight life-threatening autoimmune disease Lupus. As part of its phase 3 trials, Immupharma has begun dosing Lupus sufferers with its Lupuzor treatment at its first European sites in addition to US sites.

Clearly, this is excellent news for the company’s investors and it shows that sentiment towards a stock can rapidly change. Looking ahead, further updates on Lupuzor are anticipated in the short to medium term and they have the potential to push Immupharma’s share price higher. As such, it may be of further interest to less risk averse investors, although it remains a relatively small and higher risk healthcare play.

Meanwhile, shares in Roxi Petroleum (LSE: RXP) have fallen by over 4% today despite no news flow having been released by the company. Its latest news was a set of rather disappointing results which showed that the oil producer has swung into a loss in its most recent financial year. In fact, following a $20m pretax profit in 2014, Roxi Petroleum recorded a near-$2m loss in 2015. That was due in part to the lack of a reversed impairment from 2014 which was not repeated in 2015. However, the fact that Roxi Petroleum avoided impairments at all in 2015 was a positive result for its investors.

Looking ahead, Roxi Petroleum is aiming to increase production in the current year. Furthermore, it is intent on taking advantage of lower costs to develop its BNG asset and it therefore has long term growth potential for less risk averse investors. However, with there being a number of other oil and gas stocks which are profitable and priced to sell, there may be better options elsewhere.

The post Why are Immupharma plc, Purplebricks Group plc and Roxi Petroleum plc among today’s major movers? appeared first on The Motley Fool UK.

Respiratory focus

Synairgen (LSE: SNG) is a drug development company founded by three University of Southampton professors, the business focusing on treating respiratory diseases such as asthma. The company has a potential asthma treatment which is being developed with AstraZeneca after signing a licensing and development deal in 2014. The deal is worth up to $232m plus royalties and the drug entered Phase IIa trials in July 2015. Synairgen hopes to release results on the trials sometime in 2017.

The inhaled treatment developed by Synairgen has the potential to be a blockbuster product. Many believe if the drug is approved then AstraZeneca may take over Synairgen to acquire full ownership of the drug. This isn’t the only project in Synairgen’s pipeline: the company recently signed a research collaboration with Pharmaxis to develop a treatment for a fatal lung disease. Chairman Simon Shaw recently commented that “our collaboration with Pharmaxis has begun to yield positive results and we anticipate a Phase I clinical trial in 2017“. 

Lupus treatment

Immupharma (LSE: IMM) is in the process of developing its Lupuzor drug which is currently in Phase III clinical trials at 43 sites across the US and Europe. The company is aiming to release “top line results” by the end of 2017. The potential of the drug is huge and the company thinks the Lupus market has the potential for multi-billion dollar sales. The company made a £3.9m loss last year mainly due to research and development costs which is perfectly normal for a junior pharma stock. Immupharama recently carried out a £8.4m funding round which should fund the company right through to 2018.  It’s clear to me that Immupharama has the potential to make huge returns for shareholders if Lupuzor is brought to the market. Investors should keep an eye on the company next year when initial trial results are expected. 

Exciting pipeline

AstraZeneca is different to the two juniors as it has a pipeline full of new and exciting drugs going through clinical trials. The company pays a chunky 4.8% dividend and trades on an attractive 14.2 times earnings. AstraZeneca has the firepower to make acquisitions in the future which should boost earnings and keep the company moving forward with new drugs and treatments. The defensive qualities of the stock should mean it holds up well after the EU referendum on the 23rd June, and investors looking to shelter cash should take a serious look at the company. Although AstraZeneca is unlikely to give you the huge gains that are possible with Synairgen and Immupharma, it could be a great core holding for the long term. 

Investing in junior pharma stocks is a risky game. The rewards could be massive, but most drugs never make it to market and companies can lose millions in research and development. 

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