Synairgen’s Covid-19 opportunity runs into billions13 Sep 2020 20:49
Synairgen (SNG) could generate order books worth multiples of its market capitalisation for its SNG001 drug, house broker FinnCap has argued, after positive results from a trial of its Covid-19 treatment.
Shares in Synairgen soared 421% to 190p yesterday after a phase two trial of its coronavirus treatment, which reported a 79% reduction in patients developing severe disease or death. Patients that were treated were also twice as likely to recover those on a placebo.
FinnCap analyst Mark Brewer, who rates the shares a ‘buy’ raised his price target from 120p to 360p on the news.
‘Valuing the Covid-19 opportunity is nigh on impossible; however, we upgrade our target price to 360p but recognise this could go substantially higher, based on upcoming discussions with regulators, which should clarify the route to market and the potential for buying SNG001 ahead of the winter 2020 flu season and the possibility of a second wave of Covid-19,’ he said.
Based on pricing points for [potential Covid-19 treatments] Rebif and Avonex and Gilead’s remdesivir ($2-3,000 per treatment), and the prospect of Synairgen being able to supply up to 1m doses by the end of 2020, it is not inconceivable that an order book of $2-3bn could be generated by the year-end, which would imply a valuation substantially higher than 360p (circa £0.5bn market cap).’
Source: Citywire
Just a reminder.