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SMALL CAP MOVERS: Open Orphan wins Government Covid contract


Open Orphan made national headlines this week after winning a multi-million pound UK government Covid-19 contract.

While there are over a hundred companies working on vaccines, the pharma services specialist is part of much smaller group able to stage human challenge studies of these new inoculations.

Open Orphan, which rocketed 450 per cent to 26p in the year to date, will first manufacture a copy of the virus, test it and then use it in three trials sponsored by the government.

Open Orphan, which rocketed 450 per cent to 26p in the year to date, will first manufacture a copy of the virus, test it and then use it in three trials sponsored by the government

Open Orphan, which rocketed 450 per cent to 26p in the year to date, will first manufacture a copy of the virus, test it and then use it in three trials sponsored by the government

The firm has already received £7.5million in cash deposits but the contract overall could be worth £40million depending on how trials progress.

The modelling of the virus is now underway, with testing scheduled for early next year, though there are no estimates on when the first data could be out because of the unpredictability of this unique study.

Turning to the wider market, the AIM-All Share dipped 0.5 per cent over the week to 972, but still outperformed the FTSE 100, which was down 1 per cent to 5,850.

One of the junior market’s biggest companies, Boohoo, fell 12 per cent to 275p after it confirmed reports that PwC, its auditor since 2014, is stepping down after the scandal of worker exploitation at suppliers’ factories in Leicester.

Following the share price fall, executive chairman and co-founder Mahmud Kamani bought 300,000 shares at 243p each, upping his stake to 12.55 per cent. 

Chief financial officer Neil Catto’s wife Catherine and deputy chairman Brian Small also upped their stakes to 0.075 per cent and 0.005 per cent respectively.

Boohoo's chairman and co-founder Mahmud Kamani (left, pictured with Snoop Dogg, Carol Kane and Samir Kamani) bought 300,000 shares at 243p each, upping his stake to 12.55%

Boohoo’s chairman and co-founder Mahmud Kamani (left, pictured with Snoop Dogg, Carol Kane and Samir Kamani) bought 300,000 shares at 243p each, upping his stake to 12.55%

Sticking with the fallers, insurance premium finance specialist Orchard Funding tumbled 22 per cent to 50p after it decided to withdraw its application for a banking licence due to the market uncertainty.

Elsewhere, Alba Mineral Resources shed a tenth of its value to 0.47p despite flagging that its exploration programme at the Clogau-St David’s Gold Mine should not be affected by the two-week lockdown in Wales.

Among the risers, 4D pharma surged 26 per cent to 120p after announcing it will get a cash injection of $14.6million through a merger with Longevity Acquisition, a special purpose acquisition company.

Evgen Pharma was up 11 per cent at 13.74p on Friday after it said it had received all approvals for a mid-stage trial of a treatment for acute respiratory infections.

Sticking to the sector, Futura Medical jumped 8 per cent to 15p after flagging regulatory progress in the US for its erectile dysfunction gel, which is gaining interest among potential partners for commercialisation.

This week saw a flurry of fundraisers with companies turning to the market to bolster their balance sheets or to fund ongoing projects and acquisitions.

Hydrogen energy equipment manufacturer ITM Power raised £165million through a placing and a share subscription to invest in its operations, similarly to computer vision technology company Seeing Machines, which tapped investors for £15.3million to strengthen its balance sheet.

In mining, Shanta Gold brought in £31million, while All Active Asset Capital banked £11.5million.

Finally, SourceBio, a provider of laboratory services and products to the pharma sector, has announced plans to list next week, though it hasn’t said yet how much it plans to raise.

It is part of a flurry of new listings we’ve seen over recent weeks – with investment bank finnCap advising many of these newly public businesses.

‘The last three years have seen political uncertainty that made it difficult for entrepreneurs and investors to take long-term decisions. As that uncertain abates and even despite the issues that we currently face we are seeing the return of the IPO market,’ said Christopher Raggett, finnCap’s co-head of corporate finance.

‘Some of this can be attributed to concerns around potential changes to the CGT [capital gains tax] regime in the UK.

‘But more positively, recent events have demonstrated that the equity capital markets are a fantastic source of capital – having access to that deep pool of potential investment is extremely attractive in an uncertain world.’

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