Small Cap Movers: Redx Pharma joins junior biotech success stories

A look back at some of the more interesting stories from London's junior market this week

Redx Pharma PLC - Small Cap Movers: Redx Pharma joins junior biotech success stories

Redx Pharma PLC (LON:REDX) joined the recent spate of junior biotech success stories with an 80% jump to 45p this week on the back of a licencing deal with AstraZeneca.

The FTSE 100 giant will pay US$17mln to develop Redx’s RXC006 for idiopathic pulmonary fibrosis, where progressive scarring of the lungs is usually fatal.

If it makes it to market, Redx will receive up to a further US$360mln in milestones plus royalties.

That’s quite an achievement for a junior player that, until Monday, was valued at £48mln and is now worth just shy of £88mln – up over 200% since lockdown started.

The change of fortunes is all the more remarkable given its brief spell in administration three years ago and some struggles in raising funds.

Experts say coronavirus (COVID-19) patients can develop lung fibrosis, so perhaps the pandemic has accelerated the market’s interest in this condition.

Many sector-mates have seen their value rocket on the back of projects related to the pandemic: Genedrive PLC (LON:GDR), Avacta Group PLC (LON:AVCT) and Omega Diagnostics Group PLC (LON:ODX) have soared 860%, 760% and 580% respectively with their tests. Tiziana Life Sciences PLC (LON:TILS) grew four-fold after developing a treatment candidate.

Genedrive advanced a further 16% to 87p this week after teaming up with US life sciences firm Beckman Coulter to fully automate the entire laboratory testing process for COVID-19 samples.

It was a rollercoaster week for reach4entertainment enterprises PLC (LON:R4E), which crashed by over 50% on Tuesday after unveiling plans to delist from AIM to cut spending, following a big hit to trading while theatres and concert venues remain closed.

But the advertiser swiftly recovered 145% by Friday after chief executive Marc Boyan upped his stake to 16.06%, while Sigmund Freud’s great-grandson, Matthew, also seemingly increased his holding to 14.95%. Herald Investment, instead, offloaded its 14.42% stake. The stock ended the week 43% higher at 0.3p.

Turning to the wider market, the AIM All-Share was up a solid 4.5% to 924, outperforming the FTSE 100 index's 2% ascent to 6,018.

It seems anomalous Feedback doesn’t already have a massive fan club. While shares rocketed last week after its imaging-based communication platform, Bleepa, was awarded a place on the NHSx National Clinical Communication Tool framework, they have since tracked back to 1.2p. Buying interest may have been stifled by a big seller, who is now out of the market, according to the ‘bandits’ on the bulletin boards. If this is the case, then watch this space.

Among the risers, wound care and medical devices specialist Scapa Group PLC (LON:SCPA) soared 41% to 120p after revealing profits are currently 10% ahead of expectations, thanks to a swift reaction to the coronavirus disruption.

Cleantech tiddler Verditek PLC (LON:VDTK) shot up 34% to 15p after receiving a follow-on order worth US$2.2mln from Pakistan's SAF Group for six containerised ultra-lightweight solar panels.

Elsewhere, virtual reality entertainment specialist Immotion Group PLC (LON:IMMO) climbed 24% to 3p after launching a range of ultra-violet anti-bacterial cleaning cabinets, initially designed for its own headsets but later expanded to third parties following several commercial enquiries. It also opened its flagship 'Ocean Explorer' immersive centre at Mandalay Bay Resort and Casino in Las Vegas.

Franco Manca and The Real Greek restaurants' owner The Fulham Shore PLC (LON:FUL) was up 21% to 7p after serving up good news on site reopenings, with sales rising week-on-week. It also raised £2mln by placing shares at a 2% premium.

Fellow bar and restaurant operator Loungers PLC (LON:LGRS) surged 13% higher to 127p after expressing confidence in its recovery with sales from July 4 to August 2 down only 1.7%.

Among the fallers, SIMEC Atlantis Energy dropped 28% to 13p after placing shares at a 34% discount to raise £6.5mln. The renewables firm also started a partnership with N+P Group to pursue alternative fuel projects.

Likewise, AfriTin Mining shed 18% to 2p after raising £3mln by placing shares at a 25% discount, although it flagged that tin production at the Uis mine in Namibia rose to 35 tonnes, up 79% month-on-month.

Data intelligence company Mobile Streams PLC (LON:MOS) lost 16% to 0.2p after admitting a sharp decline in half-year revenues was expected due to lack of investment in previous years.

Meanwhile, law and professional services firm The Ince Group plc (LON:INCE) shed 14% to 24p after posting revenue down 10% in the quarter to June.

Finally, social media video group Brave Bison PLC (LON:BBSN) retreated by 11% to 1p after interim revenues nearly halved to £5.5mln after advertisers reduced spending amid the pandemic, not helped by Facebook generating lower revenues due to a change in policy.

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