Last close As at 05/08/2026
GBP0.23
— 0.00 (0.00%)
Market capitalisation
GBP32m
Research: Healthcare
Sareum released a trading update on 19 August ahead of its full-year results (financial year end 30 June 2021) expected in October 2021. Final pre-clinical studies on the lead asset, TYK2/JAK1 inhibitor SDC-1801, are now expected to commence in Q421 (previously Q321) due to COVID-19 induced supply disruptions. The timeline for the clinical trial application (CTA) and Phase I clinical trials, however, remains unchanged (end Q421 and early 2022 respectively). Short-term liquidity issues have been alleviated following two subscriptions to high net-worth individuals raising £2.37m in June and a further c £2.18m in July and August 2021. Although increased R&D expenses widened the FY21 net loss to £1.6m (versus £0.96m in FY20), the cash balance has improved (£2.7m at the end of June 2021 versus £1.3m at the end of December 2020).
Sareum Holdings |
Fund raising to cushion pipeline risk |
Trading update |
Healthcare |
20 August 2021 |
Share price performance
Business description
Analyst
Sareum Holdings is a research client of Edison Investment Research Limited |
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Sareum released a trading update on 19 August ahead of its full-year results (financial year end 30 June 2021) expected in October 2021. Final pre-clinical studies on the lead asset, TYK2/JAK1 inhibitor SDC-1801, are now expected to commence in Q421 (previously Q321) due to COVID-19 induced supply disruptions. The timeline for the clinical trial application (CTA) and Phase I clinical trials, however, remains unchanged (end Q421 and early 2022 respectively). Short-term liquidity issues have been alleviated following two subscriptions to high net-worth individuals raising £2.37m in June and a further c £2.18m in July and August 2021. Although increased R&D expenses widened the FY21 net loss to £1.6m (versus £0.96m in FY20), the cash balance has improved (£2.7m at the end of June 2021 versus £1.3m at the end of December 2020).
Year end |
Revenue (£m) |
PBT (£m) |
EPS |
DPS |
P/E |
Yield |
06/17 |
0.0 |
0.4* |
0.02 |
0.0 |
0.0 |
N/A |
06/18 |
0.0 |
(1.5) |
(0.06) |
0.0 |
0.0 |
N/A |
06/19 |
0.0 |
(1.5) |
(0.05) |
0.0 |
0.0 |
N/A |
06/20 |
0.04 |
(1.0) |
(0.03) |
0.0 |
0.0 |
N/A |
Note: *PBT includes £1.8m from share of profit of associates.
Given that the CTA filing for the flagship programme SDC-1801 has been in the works for a while (previously mid-2021, now expected in Q421), another delay in completion of the final pre-clinical study may concern the market, though supply constraints due to the pandemic remain a genuine issue. Importantly, the recent rounds of capital raising (c £4.5m raised over four rounds since June 2021) mean that the company has sufficient cash to act as a buffer in case of any further delays in progressing the developmental pipeline (the company has maintained its early 2022 target for the Phase I clinical trial).
In terms of the remaining pipeline, Sareum is continuing to work on the study design to identify an optimal cancer indication and patient population for SDC-1802 before undertaking further toxicology studies. The toxicology studies were planned for late 2021 but are now likely to get pushed out to early 2022, in our opinion. On the positive side, the UK Research and Innovation funded COVID-19 research project for SDC-1801 was completed in July 2021, with the company reporting a profile superior to dexamethasone and similar to baricitinib, a JAK1/JAK2 inhibitor, in terms of cytokine activity related to acute respiratory distress syndrome.
With regard to its out-licensed asset, the CHK1 inhibitor SRA737 (targeting solid cancers), while Sierra continues to assess options for the drug (in-house development versus sub-licensing), no update has been forthcoming in terms of timelines. However, the recent in-licensing by Sierra of BET inhibitor AZD5153 from AstraZeneca and its potential combinations with SRA737 can be taken as an early indication of Sierra’s revived interest in SRA737, which would be a positive for Sareum.
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Research: Financials
ProCredit Holding’s (PCB) net income came in at a strong €20.7m in Q221 (versus €8.0m in Q220), translating into an annualised return on equity (ROE) of 10.2% (and 9.1% in H121). This was assisted by a favourable cost of risk development (with a net positive P&L impact of €0.9m), solid loan book growth (4.5% quarter-on-quarter in Q221) and stable year-on-year net interest margin (NIM) of 2.9%. Despite the improved FY21 earnings outlook (as illustrated by the increased management guidance), PCB’s shares continue to trade at a considerable discount to its book value with a FY21e P/BV of 0.5x (based on our forecasts).