Futura Medical Plc

Futura Medical Plc (LON: FUM) is a pharmaceutical company that builds products for customer healthcare. The group is involved in the research and development of pharmaceutical drugs. The company specialises in pain relief and has four products in its development pipeline, which comprise MED2005, TIB200, CSD500, and TPR100. 

Recent News
On 23^rd December 2019, Futura Medical announced the fundraising of GBP 3.25 million.

Financial Highlights – H1 Financial Year 2019 (30^th June 2019, £)

(Source: Interim Report, Company Fillings, LSE)
 
In the first half of the financial year 2019, the research and development costs stood at £4.74 million against £1.65 million recorded for the six months ended 30 June 2018.  The surge of £3 million is attributable to the FM57 Phase 3 study, which is running on time, within budget and anticipates delivering headline data in December 2019. Administrative costs stood at £0.53 million in H1 FY19 as compared to £0.86 million in H1 FY18 and were reflective of the group's plan to focus cash resources on providing the R&D programme and keep central costs lean. At the period end, the company held cash of £5.63 million with an additional £1.36 million of R&D tax credit refund received after the period end, on August 2019. Net loss for the current period stood at £4.46 million, an increase from the corresponding period of the last year. In H1 FY19, loss per share increased to 2.18 pence as compared with the corresponding period of the last year.
 
Share Price Performance 

Daily Chart as at 27^th December 2019, before the market close (Source: Thomson Reuters)

On 27^th December 2019, Futura Medical Plc shares were trading at GBX 14.35 at the time of writing before the market close (at 11:02 AM GMT), up by 2.5% against the previous day closing price. Stock's 52 weeks High and Low are GBX 49.20/GBX 5.80.The company’s stock has given investors 55.20 per cent of a positive return in the last month.
Conclusion
 
The company’s revenue from contracts with consumers for the six months ended 30 June 2019 remained nil. The profitability margins have remained stagnant or declined. The company’s bottom-line performance has remained in the negative zone for the current period. The company operates in a challenging environment which requires continuous investments, sometimes at the cost of profitability, to stay ahead of the competition. The company has the capability for a substantial value inflection, due to MED2005 late phase clinical development.The company’s P/E, EV/EBITDA and P/CF multiples are in negative zone as compared to the industry multiples.
 
Therefore, considering the ongoing macro challenges and uncertainties in near-term, we have given a “Watch” recommendation at the current price of GBX 14.90 (as on 27^th December 2019, before the market close at 9:20 AM GMT), while we look for any upcoming catalysts in the near term.

Motif Bio Plc

Motif Bio Plc (LON: MTFB) is a clinical-stage biopharmaceutical company. The company is focused on the development of antibiotics; its lead product candidate is iclaprim, which has a Qualified Infectious Disease Product (QIDP) designation from the FDA. The company advances in drugs development, which is designed for infections treatment caused due to multi-drug resistant bacteria.

Financial Highlights – H1 Financial Year 2019 (30^th June 2019, US$, thousands)

(Source: Interim Report, Company Website)

In the first half of the financial year 2019, the operating loss stood at US$11.02 million against the operating loss of US$11.01 million in H1 FY2018. The LBT (loss before tax) stood at US$6.2 million in H1 FY2019 against the LBT (loss before tax) of US$7.76 million in H1 FY2018. The net loss stood at US$6.2 million in H1 FY2019 against the net loss of US$7.8 million in H1 FY2018. This led to a basic loss per share of $0.02, while diluted loss per share was $0.02.

Share Price Performance

Daily Chart as at 27^th December 2019, before the market close (Source: Thomson Reuters)

On 27^th December 2019, Motif Bio Plc shares were trading at GBX 0.38 at the time of writing before the market close (at 11:10 AM GMT), down by 5% against the previous day closing price. Stock's 52 weeks High and Low are GBX 44.90/GBX 0.3055.The company’s stock has given investors 0.51 per cent of a positive return in the last week.

Conclusion
There remains an urgent need for new antibiotics that can overcome resistant bacteria and is a critical healthcare issue that is recognised around the globe. The company is in a great position to capitalise on the opportunity presented by this pressing medical need as with the targeted Gram-positive spectrum of activity, and iclaprim has the potential to help address the problem.

While preparations for the European regulatory process are underway, securing approval for iclaprim in the U.S. remains the highest priority for the company. The company remained careful in managing its costs and continues to manage its resources to improve profitability aggressively.

Based on the above rationale, we have given a “SPECULATIVE BUY” recommendation at the current price of GBX 0.36 (as on 27th December 2019, before the market close at 8:20 AM GMT). 

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