Investors of life sciences firm ValiRx Plc (LON:VAL) get an awful lot for their money, according to analysts at Beaufort today.
Rating the stock at ‘speculative buy’ with a target price of 6.0p, Beaufort said the clinical stage cancer therapeutics company operates at a low-risk, high return model.
It also offers a comprehensive pipeline, including lung cancer treatment VAl401 and prostate cancer treatment VAL201, Beaufort said.
On Wednesday, the company announced it was setting up a third centre for the dosing trial of VAl401 and will seek permission to release mid-trial data.
A second clinic in Tbilisi, Georgia, has just started recruiting patients, but ValiRx now wants to utilise the City’s Research Institute of Clinical Medicine as a third site.
VAL401 is being developed by Valiseek, a joint venture between ValiRx and Tangent Reprofiling Limited.
Meanwhile, clinical trials are underway for VAL201, which Beaufort noted has demonstrated evidence of anti-cancer and tumour activity, excellent tolerability and has shown to reduce prostate specific antigen levels.
Beaufort said ValiRx is shareholder friendly as it seeks to partner or out-licence with a view to crystallising value, before reaching the costlier phases of development.
“It routinely provides shareholders with tangible progress between modest funding rounds, the latest of which now finances its two lead candidates with respect to additional patient/centre recruitment, trial dosing and product manufacturing out to September,” Beaufort analysts Barry Gibb and Andy Senga said.
“Comparisons with both peer groups with similar clinical portfolios, or early stage partnership deals with big pharma seeking entrance into such therapeutic areas, suggests a significant valuation gap has opened.”
The analysts added: “While it is understandable that the market remains concerned regarding the Group’s ongoing funding needs, it should also recognise that a potentially near-term Big Pharma development collaboration for either VAL201 or VAL401 would likely be at a multiple of the Group’s current capitalisation.”
Shares in ValiRx gained 1.96% to 2.50p in afternoon trading.