Motif Bio (LON:MTFB) – BUY*: CRO Partnership
Market Cap: £27.9m; Current Price: 43.4p; Target Price: 89p
- Partnership with CRO for Phase III clinical trials
- Partnership with a leading global Clinical Research Organisation (CRO) that will undertake preparations for two Phase III, randomised, double-blind, multicentre clinical trials to evaluate the efficacy and safety of intravenous iclaprim versus vancomycin in the treatment of acute bacterial skin and skin structure infections (ABSSSIs) suspected or confirmed to be due to Gram-positive pathogens.
- Motif is investing more than $950,000 under the terms of the interim agreements, to be paid by 31st July. The selected CRO is one of the world’s top five providers of Phase I-IV clinical trial management services.
- No change to forecasts, BUY rating and 89p price target.
NORTHLAND CAPITAL PARTNERS VIEW: Next step in setting up the Phase III trial for iclaprim, Motif’s late clinical-stage antibiotic. Given the major global public health crisis driven by rampant antibiotic resistance, there is a massive market opportunity for iclaprim whose safety and efficacy is well supported with successful tests on more than a thousand patients. We maintain our BUY rating and 89p price target.
Starcom (STAR) – CORP: Placing
Market Cap: £5.0m; Current Price: 5.875p
- Placing to fund working capital; change of CFO
- Conditional placing with existing shareholders (including directors) to raise £475k (gross) at 4p/share. The funds will be used to address the short term working capital strain identified in the recent prelim results. Starcom has built up stock on the back of bill and hold contracts but customer drawdowns have been slower than initially anticipated. It is anticipated that the inventory will be realised through sales in 2015. Northland Capital Partners acted as broker in the transaction.
- Ron Alroy has been appointed as CFO from 15th June, replacing Eitan Yanuv who is leaving to concentrate on his other business interests. Ron Alroy qualified as a Certified Public Accountant with KPMG Israel and has held key positions in several Israeli businesses including Spot Financial Research Limited and Aurec Capital Limited. He is currently Senior Lecturer at the College of Management Academic Studies, an adjunct Senior at the Technion and Head Instructor at the Israel Ministry of Finance. He will not be appointed to the board at this stage and will initially be appointed on a part time basis.
NORTHLAND CAPITAL PARTNERS VIEW: The placing of £0.5m addresses the working capital requirements identified in the recent prelims. Starcom had built up inventory levels of new products on the back of bill and hold contracts but customer drawdowns have been slower than initially expected. The majority of products are now fully developed and Starcom has diversified its customer base geographically. As such, we expect growth in revenue in H2 that will reduce inventory levels. The second generation Watchlock product is also due in Q4 that will benefit 2016 and beyond.
Sunrise Resources (LON:SRES) – CORP: Bay State Silver project update
Market Cap: £1.4m; Current Price: 0.21p
- Grades up to 4,020g/t silver from underground sampling
- Sunrise Resources has competed an 18 sample programme from underground workings at the Bay State Silver project, located in Nevada.
- Sampling took place along 230m of strike of the Chihuahua Vein and returned bonanza values up to 4,020g/t silver (Ag) and averaging 1,123g/t Ag. The vein is also enriched in base metals with up to 10% combined lead-zinc-copper.
- Drilling will now focus on the Chihuahua Vein.
NORTHLAND CAPITAL PARTNERS VIEW: At this stage in Sunrise Resources’ initial exploration programme it’s difficult to imagine a more promising set of results. Though these are mainly grab or chip samples and therefore do not accurately reflect the full extent of vein, they do show that the sub-vertical Chihuahua Vein is significantly higher grade than the Company expected. Historical records also indicate the presences of high grade silver bearing splay faults associated with the Chihuahua Vein as well as stockwork silver mineralisation over significant widths. Historic literature describes the width of the vein varying between 0.3m and 4.6m that splits into periodic stockworks up to 15m wide. Sunrise has now demonstrated the presence of high silver grades over 470m of strike of the Chihuahua from channel and grab sampling both at surface and depth, and the vein remains open to the northwest and southeast. This gives an indication that the project is of a sizable scale but much more work is required before we can speculate on the potential value of the rediscovery. Sunrise is now planning to focus an initial three drill hole programme on the Chihuahua Vein testing below the workings.