Sareum Holdings PLC

Sareum Holdings PLC (LON: SAR) is an FTSE AIM All-Share index listed Pharmaceuticals & Biotechnology Company engaged in the discovery and development of therapeutic drugs by a combination of skills in medicinal chemistry, computational chemistry, and biology.

Investment Rationale for Valuation – WATCH at GBX 3.95

• Widening of Net Loss: The Company had widened its net loss from a negative £0.99 million during FY20 to a negative £1.50 million during FY21.
• No Revenue: The Company had not reported any revenue during FY21 as drugs were yet to be commercialized.
• Federal Tapering: The expected Federal tapering at the pace of USD 15 billion per month starting later this month may adversely impact the equity markets.
• Clinical Pipeline: The robust cash balance remained sufficient to fund the clinical trials of SDC-1801 and SDC-1802.
• Unfavourable Technical Indicators: From a technical standpoint, the MACD line remained lower than the signal line, indicating a correction in the stock price. Moreover, the 20-days exponential moving average of GBX 5.50 indicates a correction in the stock price.

One Year Share Price Chart  

(Source: REFINITIV; Analysis done by Kalkine Group)

Conclusion

Based on the unfavourable technical indicators and weak financial performance during FY21, we have given a “WATCH” recommendation on Sareum Holdings PLC at the closing market price of GBX 3.95 (as on 22 November 2021), while we will suggest reinvesting once we identify fresh growth catalysts for the Company.

*The reference data in this report has been partly sourced from REFINITIV.

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