RE: Bandwagon23 Jan 2025 10:12
AIM minnow ImmuPharma demonstrated today (29/11/2019) just why investors continue to back small companies on London’s junior market. In just a few hours, shares in the £12 million drug firm had quadrupled in value, netting lucky – and brave – investors a handsome profit.
Immupharma shares closed last night at a fraction over 7p, but investors got excited when the company announced a licence and development agreement with Avion Pharmaceuticals to commercialise Lupuzor in the enormous US market. The drug is used to treat Lupus, a potentially life-threatening auto-immune disease, but might also work for other auto-immune diseases.
Minutes before 11am, Immupharma shares were changing hands for 28p, valuing the business at over £40 million. It’s a far cry from April 2018 when the price crashed 85% from about 180p after the company admitted that trials of Lupuzor were unable to demonstrate the drug was any better than a placebo. That bombshell came just months after the company had raised £10 million from a share placing at 144p.
As part of today’s deal, Avion will also be able to use trademarks to development, manufacture and commercialisation of products under the licence deal.
Avion will also bankroll a 52-week international Phase III trial in lupus patients in the US, Europe and elsewhere in 2020 up to $25 million. Immupharma will also get milestone payments of up to $70 million - $5 million on regulatory approval and $65 million on hitting sales targets. Further approvals other than Lupus will also trigger a $5 million windfall.
Avion has also promised Immupharma tiered double-digit royalties up to 17%, according to pre-specified annual US sales targets.
Avion chief executive says: “After in-depth due-diligence around Lupuzor, its mechanism of action and learnings within the initial Phase III results, we believe that Lupuzor has a unique position within lupus that sets it apart from competition.
“With approximately 1.5 million patients in the US suffering from lupus, there is a significant unmet need for a safe and effective drug for this debilitating disease that we believe Lupuzor can meet.”
This is great news for Immupharma, and that’s reflected in this stratospheric surge in the share price. Bulls will remind us that, even after quadrupling in value, the shares trade at levels significantly below the peak achieved during the previous era of investor excitement between September 2017 and April 2018.