Proactive Investors - Run By Investors For Investors
Markets

Small cap movers: Biotech billionaire Patrick Soon-Shiong becomes latest AIM bargain hunter with stake in Directa Plus

A look back at some of the more interesting stories from the junior market over the past week
Patrick Soon-Shiong
Soon-Shiong has an estimated net worth of around £6.2bn

Patrick Soon-Shiong, the South African-born billionaire who made his money through the cancer drug Abraxane (and, more importantly, is part owner of the LA Lakers), has become the latest member of the financial super-elite to go bargain hunting on AIM by snapping up a stake in graphene-based products maker Directa Plus PLC (LON:DCTA).

On Wednesday, Directa announced that Soon-Shiong now holds 18.95% of the company following a deal on Friday last week, with the company’s shares rocketing 26%, or 14p, to 67p in response.

Dubbed ‘America’s richest doctor’, Soon-Shiong moved to LA in the 1980s and began a career as a surgeon before setting up American Pharmaceutical Partners into which he then folded the Abraxane drug.

While originally targeted by short-sellers, APP received a boost in 2005 when Abraxane was approved by the US Food and Drug Administration.

The firm was eventually split in two, with the generics division sold to German firm Fresenius in 2008 for around £3.6bn while the second half, which included Abraxane, was sold to US biotech giant Celgene in 2010 for about £3.3bn.

At the time of the sales, Soon-Shiong owned around 80% of each of the companies. His estimated net worth, according to Forbes, is around £6.2bn.

The investment follows hard on the heels of two other AIM deals struck by mega-rich speculators.

In January, drug developer Midatech Pharma PLC (LON:MTPH) received a £8mln cash injection from Chinese billionaire Lam Kong in return for a 77.3% stake in the firm, which is developing a potential treatment for hormone disorders.

In December, another US biotech magnate (and reportedly major Scientology donor) Bob Duggan ploughed around £19mln into antibiotics specialist Summit Therapeutics PLC (LON:SUMM) for a stake of around 49%, paying a premium for the shares to boot.

Speaking of boots, casing and engineering group Chamberlin PLC (LON:CMH) took a kicking this week, with shares tumbling 11%, or 7.5p, to 60p after it warned of tougher trading conditions.

The company blamed the slowdown to reductions on new emissions regulations as well as the ever-present uncertainty of Brexit.

Firestone Diamonds PLC (LON:FDI) lost some of its shine after unscheduled repair work at its Liqhobong mine cut production to 224,000 carats in the final three months of 2018 from 241,000 the year before, with shares dropping 5%, or 0.14p, to 2.6p in response.

There was more grim news from the mines as Fox Marble Holdings PLC (LON:FOX) shares crumbled around 10%, or 0.9p, to 8p after a disappointing operations update in which it admitted sales for 2018 were not as high as expected due to lower production from its Maleshevë quarry in Kosovo.

Caution wasn’t paying off for data synchronisation specialist Maestrano Group Plc (LON:MNO), with shares plunging 38%, or 3p, to 5p after it said its adjusted loss for 2019 would be “materially behind market expectations” due to a much more cautious approach to the ramp-up of end-user subscription revenue.

The opposite was true for payments specialist PCI-PAL PLC (LON:PCIP) as it cashed in on the release of an industry whitepaper on Thursday, which it co-authored with US telecoms giant Verizon, as shares jumped 7%, or 1.6p, to 25p.

The AIM All-Share fell 1.3%, or 11.7 points, to 910 during the week while the FTSE 100 was up 1.2%, or 88.7 points, to 7,104.

Tower Resources PLC (LON:TRP) rose strongly, up 22%, or 0.2p, to 1p, after its 50% owned Algoa-Gamtoos exploration area was boosted by a significant new gas discovery at the neighbouring Brulpadda project, offshore South Africa.

Shares in software firm Pebble Beach Systems Group PLC (LON:PEB) were sent surging 18%, or 0.9p, to 6p after a solid trading update reported that operating profits for 2018 would be about four times higher than 2017 at more than £2mln.


© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use