25 October 2014

Lipoxen

SPECULATIVE BUY

02/06/2008

Hiding its light under a bushel since its 2006 AIM float, biopharmaceuticals smallcap Lipoxen is very nearly singing from the City rooftops about its deals with a raft of the industry’s biggest players.

Lipoxen’s two platform technologies, which deliver proteins and vaccines into the body, both have products in Phase I clinical trials. Both platforms work to make treatments more effective by enabling them to be circulated in the body for longer.

The protein platform’s diabetes product, called SuliXen, emerged successfully in April from Phase I trials and an anaemia product, ErepoXen, completing its own Phase I in late May. However, for such a small company developing its wares is too costly and so chief executive Scott Maguire, whose investment banking past has given him a long list of contacts at US of pharma companies, is signing deals with large partners.

So far, three significant licence deals have been made: ErepoXen is being developed in partnership with world-leading vaccine producer, the Serum Institute of India; a veterinary version of SuliXen is under agreement with pharmaceutical colossus Schering-Plough; and healthcare giant Baxter has an agreement over a potential treatment for haemophilia.

‘We’re looking to increase visibility now,’ states Maguire, who assures that the company is set to generate a bubbling brook of news this year. Broker coverage will help too, and Landsbanki has initiated its coverage with forecasts of breakeven in two years.

Receiving a number of ‘milestone payments’ from its partners for reaching particular levels of development has so far helped cash levels to £1.8 million by March. Maguire says a cash burn rate of £100,000 a month means it has sufficient for now and he is ‘expecting a couple’ of milestone payments this year and ‘at least’ one more license deal. Speculative buy.

Tags: Cash, Deals & contracts

Sector: Pharmaceuticals & Biotechnology

Companies: Xenetic Biosciences

Market cap: £30.5m

PE Forecast: n/a

Share price: 25.5p

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