Shire investors eye drug launch
HYPERACTIVE buyers chased Shire’s shares up to 4950p before they closed 318p higher at 4927p on hearing the drugs giant intends to re-file its dry eye treatment Lifitegrast with the FDA, the Big Daddy American regulator, for a possible US launch after a successful drug trial.
The drug met both primary and secondary targets with symptoms substantially reduced over 84 days and benefits were visible as soon as two weeks.
Shire’s chief executive Flemming Ornskov said: ‘We will now re-submit the drug, which could have sales of at least $1bn by 2020 in the first quarter of 2016 and if approved could be launched later in 2016.’
Broker UBS has a 12-month target price of £62 and expects the US launch of Lifitegrast to occur in the third quarter of 2016.
Analyst David Evans said: ‘This data point was the key catalyst for Shire this year and such a clear positive keeps the Shire investment case on track.’
Followers of Shire are confident that positive news on Lifitegrast also helps Shire’s attempt to buy Baxalta, the US bleeding disorders and immune deficiencies specialist.
Its £19.6bn all-share offer was rejected by the Baxalta board and the market is waiting for Shire to increase its offer. Ornskov has cash burning a hole in his pocket after Shire banked £934m following its £32bn tie-up with US rival AbbVie collapsed.
Dealers heaved a sigh of relief as oil giant BP posted better-than-expected third-quarter figures and management said it would continue to pay a useful dividend. Shares touched 392.65p before reacting on profittaking to close 4.4p off at 380p.
Third quarter UK GDP figures unfortunately failed to cut the mustard and the Footsie fell away to close 51.75 points off at 6365.27. Wall Street lost 61 points before lunch ahead of today’s policy announcement by the Federal Reserve. The Central Bank is expected to keep interest rates at 0.25pc amid low inflation and concerns about the risks arising from the slowdown in emerging markets.
Still in the dog-house after last week’s shocking profits warning, media group Pearson fell a further 37p to 868p.
News that a Northern Irish teenager has been arrested in connection with TalkTalk’s recent hacking problems helped relieve concerns over possible ransom demands. As bears moved swiftly to cover their hefty short positions, the stock bounced 29.8p or more than 13pc to 255.1p.
Russian billionaire Roman Abramovich already has enough on his plate with Jose Mourinho’s tedious antics at Chelsea Football Club but the share price performance of steel producer Evraz, in which he holds a 31pc stake, must also be giving him some grief. Sellers were all over the stock again and it closed 10pc, or 8.9p down, at 79.4p.
LED technology group Dialight came a big cropper following a dire third quarter trading update. The shares were smashed down to 510p before closing 103p, or 15pc lower, at 565.5p after new chief executive Michael Sutsko revealed his new strategy and warned of much slower sales growth and increased uncertainty for the rest of the year. Lighting revenue had slowed 5pc in the third quarter.
Back in June, Dialight issued a profits warning due to a slowdown in orders in its lighting business in both the US and Europe which meant its revenue this year would be below previous expectations. The warning prompted the group to launch a strategic review of the business.
Lavendon, a leader in equipment hire across Europe and the Middle East, put on 6.75p to 143.75p after Jacqueline Kenny, wife of chief executive Don Kenny, bought 70,000 shares at 135.68p a pop.
Technology group Imagination Technologies fell 14.75p to 225p after Liberum Capital downgraded to hold and cut its target price to 250p from 275p. The broker believes Imagination’s strategy is too skewed towards long-term investment which could put the whole group at risk in the short term.
Jam tomorrow Irish oil explorer Providence Resources lost 2.25p, or 9pc, to 21.75p on profit-taking following recent strength. The company yesterday announced the much- delayed farm- out of up to 32pc of Spanish Point in the North Porcupine Basin.
Fine, but many investors are getting impatient waiting for any news regarding a farmout agreement on Barryroe, which for the past five years was being tipped as a multibillion pound gusher. No chance.
Persistent selling following a disappointing unscheduled trading update left Amino Technologies 47.5p or 30pc off at 109p. The company indicated a shortfall in revenue expectations in its core Amino business which will result in full-year 2015 pre-tax profits being flat.