Battle against Covid-19 boosts pharma minnow
VERONA Pharma became the latest biotechnology minnow to wow London investors with its work to help combat Covid-19.
The AIM-listed group has been given permission by US authorities to test an inhaler containing its drug ensifentrine on hospitalised coronavirus patients in Alabama.
It believes the chronic obstructive pulmonary disease (COPD) treatment could help reduce inflammation in the lungs and ‘has the potential to improve oxygenation and lung function’, which could help patients recover.
Verona is on track to conduct late-stage clinical trials of ensifentrine for COPD later this year.
The company, which is also listed on the US Nasdaq stock exchange, raised £159m from investors last month. It thinks this could help tide it over until 2023 or so.
Verona shares charged almost a third higher at one stage, but eventually closed up 6.9pc, or 5p, at 77.5p last night, after rising by around a fifth in earlier trading.
Its big jump on a quiet Friday echoes rallies seen in other junior market-listed groups. Key among these are Omega Diagnostics (down 3,4pc, or 2p, to 56.5p), which has made an antibody test, and Novacyt (down 1.6pc, or 5p, to 302.5p), which transformed its fortunes in January by being one of the first groups to produce a Covid test – and has seen shares mushroom by a jaw- dropping 2,227pc in the year to date.
But Verona’s boom was not reflected across the rest of the market, which had a glum end to the week.
The FTSE 100 stumbled 1.6pc, or 95.58 points, to 6090.04, with just a clutch of stocks in the black following disappointing data out of China, where retail sales fell unexpectedly in July and the recovery among the country’s factories struggled to pick up pace.
The FTSE 250, which is less exposed to global political and economic events, dropped by a smaller 1.1pc, or 188.97 points, to 17735.62.
Shares in airlines and holiday companies were buffeted by the Government’s decision to add France to its quarantine list - which means anybody returning from there from 4am this morning will have to self-isolate for two weeks.
But shares in companies connected to airlines also went on a sharp downward journey.
On the Footsie, plane enginemaker Rolls- Royce tumbled another 4pc, or 10.6p, to 257.1p, while components maker Melrose – which owns GKN – slid 3.4pc, or 3.6p, to 102.75p.
The pair were among the lowestranking stocks on the Footsie leaderboard – ahead only of British Airways-owner IAG (down 4.8pc, or 9.85p, to 194.55p).
Companies that rely on tourists flocking through airports, namely
WH Smith (down 2.2pc, or 22.5p, to 984.5p) and café- owner SSP (down 1pc, or 2.4p, to 240.6p) were also under pressure. On the mid- cap index, Cineworld slid 2.3pc, or 1.2p, to 50.74p after Jangho Group, the company owned by Chinese construction and decorating billionaire Liu Zaiwang, upped its stake in the struggling cinema chain from 3.3pc to 4.5pc. Cineworld shares were jolted out of a sluggish stupor over the last week after politicians moved to terminate a series of Hollywood laws known as the Paramount Decrees, the result of which could be that movie studios could buy cinemas.
Some of Cineworld’s drop could be profit-taking. Traders lost their appetite for
Domino’s Pizza shares after analysts at Citi downgraded its stock from ‘neutral’ to ‘sell’.
They pointed to the company’s ‘cautious tone’ around sales over the next few months and lack of a dividend. Domino’s stock shed 5.2pc, or 18.6p, to close at 339p.