This developer of vaccines to combat allergies stands 12% above the 101.5p price at which we recommended the shares in January. Plans to obtain US regulatory approval for the group’s innovative products remain on track. The principal vaccine, Pollinex Quattro, only takes four jabs to take effect rather than the dozens usually required. It is already being prescribed in Germany – the company’s main market for its other vaccine products.

The existing business saw sales rise by a fifth to £22.9m in the year to June. This enabled operating profit before exceptionals and R&D costs to jump 97% to £6.1m. The company raised £15m at flotation last October explicitly to carry out clinical trials for specific products. 13 have already been started, including one in Canada, which has similar pollen conditions to the US. This pushed R&D costs up from £0.5m to £5.6m. These will jump again in the current year as the major Phase III trials for Pollinex Quattro are started in the next US season for ragweed – North America’s main allergen. Thus this year’s £1.9m loss will rise dramatically. Revenue should still grow, as the company plans to boost its sales team in Europe, outside its main German market.

However, the major prize will come when the new formulation is introduced into the US: with half of the US population affected by one or more allergens, the potential is immense for a product that could cure this problem rather than just treat the symptoms. Buy.

Allergy Therapeutics	AIM	£8.2m	10.00p	0.00p
Click here for interactive charting
Other company articles:
Allergy group in ‘breakthrough’			14/05/2008
Stockpicking with the experts			01/06/2007
Big tests for Allergy Therapeutics			19/05/2006
Runners and riders in the medical stakes			10/04/2006
Aero Inventory soars			16/09/2005