The Investment Column: Peptide
Tuesday 21 September 1999
Traditionally, the point of biotech companies was to discover new compounds whose development costs would be shared with a larger partner. But Peptide's research programme was seeing it burn more than pounds 1m a month and its poorly- rated shares prohibited it acquiring other drug development companies with products on the market already generating cashflow. Should investors feel disappointed to see Peptide's drug discovery arm part-given away to venture capitalists?
That depends. Stripping out the pounds 25m Peptide has in the bank, the market values Peptide's technology in both vaccines and drug discovery at a measly pounds 10m.
Peptide will retain a stake, as yet undisclosed, in the drug discovery business, without any obligation to fund it, in return for handing over the assets. So investors who believe the drug-discovery portfolio is valuable should buy the shares now. More sceptical investors can take comfort that the deal will mean Peptide's cash will last until its first product, ArilVax, a yellow-fever vaccine, hits the US market.
There are better reasons to buy into Peptide. Other rock-bottom biotech stocks, such as British Biotech, have recently enjoyed increases in their shares on the back of news of partnership deals and late-stage clinical trials news.
ArilVax phase III trial data is due by the end of the year; three other vaccines are in phase II trials at present; and a partner could soon be announced for Peptide's OraVax oral vaccine project. Betting on good newsflow is risky, but courageous investors should find Peptide attractive.
- 1 Germanwings crash: Police make 'significant discovery' at home of co-pilot Andreas Lubitz
- 3 Zayn Malik already working on solo material, just days after quitting One Direction
- 4 The West has it totally wrong on Lee Kuan Yew
- 5 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Germanwings plane crash live: Andreas Guenter Lubitz intentionally crashed flight 9525 into the Alps in act of mass murder and suicide – latest
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...