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Small cap movers: Coronavirus crisis shines a light on small-cap pharma

As global efforts to tackle the coronavirus (COVID-19) pandemic intensify, so the spotlight has fina..

By admin , in Cambridge , at May 2, 2020

As global efforts to tackle the coronavirus (COVID-19) pandemic intensify, so the spotlight has finally shifted to focus on the potential of small pharma players.

According to Ivan Sedgwick, a director at corporate finance firm LGB & Co, the poor share price performance of major healthcare names has demoralised investors, forcing them in their quest for value into unfamiliar territory such as AIM.

“Investors have moved from a focus on balance sheet and funding risk and are back looking at the upside potential that some of these companies exhibit,” Sedgwick noted.

Among his top picks are Scancell Holdings PLC (LON:SCLP), part of a coronavirus vaccine programme; university spin-out investor Frontier IP Group PLC (LON:FIPP); and Open Orphan PLC (LON:ORPH), which is testing an antiviral.

In fact, a flurry of fundraises has underlined a growing confidence among small-cap innovators. In the three weeks to the Easter weekend, £500mln was raised on AIM, with just under third going to healthcare companies.

This past week has been another strong one for the sector. Genedrive PLC (LON:GDR) rocketed 52% higher on Friday to 126p after reporting that its COVID-19 testing kit, designed to deliver faster results, is to receive a CE mark in three weeks.

Likewise, Omega Diagnostics Group PLC (LON:ODX) soared 41% higher this week to 65p after sticking the same mark on its coronavirus antibody test.

EKF Diagnostics Holdings PLC (LON:EKF) rose 12% to 40p on a contract to supply sample collection kits to Source BioScience, a provider of testing services for the NHS.

Verona Pharma was the exception. It tumbled 26% to 40p after admitting the struggle to raise enough capital for the final phase of trials for nebulised ensifentrine, a candidate for respiratory diseases, which may be delayed.

Turning to the wider market, the AIM All-Share index rose 2%, touching the 800-mark for the first time since the crisis started, while the FTSE 100 was flat at 5,772 after a rollercoaster week.

Among the AIM risers, Erris Resources PLC (LON:ERIS) soared 63% to 5p after the explorer reported its “two highest grade gold results to date” at the Loch Tay project in Scotland.

Staying in the mining sector, Asiamet Resources Ltd (LON:ARS) jumped 24% higher to 2p after receiving approval from the Indonesian authorities for the further exploration permit on its KSK Contract of Work in central Kalimantan.

Peer Empire Metals Limited (LON:EEE) ascended 24% to 1p after it agreed to acquire an interest in the Munni Munni palladium project in Western Australia.

Fellow gold digger Condor Gold PLC (LON:CNR) flew 20% to 30p after receiving an environmental permit for the development and exploitation of gold in the high-grade Mestiza open pit project in Nicaragua.

Changing sector, TV automation firm Pebble Beach Systems Group PLC (LON:PEB) jumped 28% to 11p after reassuring investors the pandemic will not hit trading too severely as people turn to media to entertain themselves during isolation.

Similarly, convenience store and petrol station services provider Universe Group PLC (LON:UNG) gained 26% to 3p after noting that all of its customers are retailers of vital supplies, being food, drink and/oRead More – Source

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