C4X Discovery Holdings PLC (AIM:C4XD)’s latest financial results struck the right notes with equities analysts on Thursday, with Shore Capital Markets predicting considerable upside on current market valuations.
C4X already has licensing deals in place with some of the leading developers for its programmes, with ShoreCap reckoning the agreements with Sanofi and AstraZeneca could deliver up to US$800 million in milestones, with up to US$22 million in preclinical development milestones potentially converting in the near term.
"We see these agreements as strong validation of C4XD’s prowess in drug discovery," said ShoreCap.
C4X’s cash position is also robust, with a runway until the first quarter of 2025 based on current cash burn rates.
“We believe this presents plenty of opportunity for C4XD to progress its pipeline programmes towards the clinic, allow additional development milestones to crystalise, and to potentially secure new licensing deals; all of which we view as important, incremental value inflections which should reinvigorate sentiment,” said analysts.
Yet investors may be tardy to the party, according to analysts: "We feel the recent weakness in the shares look unwarranted and would seem to discount some if not all of the potential we see across the pipeline."
Shares fell 9% to 8.3p following Thursday’s earnings call, yet in ShoreCap’s view, C4X has a fair value of 52p per share, suggesting a walloping 500% upside.