10th Jun 2024 12:26
(Alliance News) - Panmure Gordon said the unscheduled trading and funding update from Arecor Therapeutics PLC on Monday highlights a higher working capital requirement than previously expected.
Arecor said its working capital requirements have accelerated primarily as a result of the timing of potential pipeline revenue and an increase in costs. The firm now expects funding to be required in the third quarter of 2024.
Shares in the Essex, England-based biopharmaceutical firm shares fell 18% in response to 130.00 pence each on Monday in London. It now has a GBP36.8 million market capitalisation.
The company is loss-making, having reported a pretax loss of GBP8.9 million in 2023, narrowed from GBP10.4 million in 2022, on GBP5.7 million in revenue, up from GBP3.7 million.
Revenue for 2024 remains in line with consensus market expectations, Arecor said, but this remains dependent on revenue growth across all areas of business, including new potential licensing deals.
Chief Executive Officer Sarah Howell said: "We believe the growth potential for the company remains compelling with a number of revenue and significant partnership opportunities. We are focussed on addressing the funding requirements for the business to deliver this growth and to capture the value of our platform and insulin assets."
Panmure Gordon explained funding is now expected to be required around six months earlier than the broker had previously estimated.
The broker noted the change in working capital requirements relates to a number of factors, including timing of receipts, a delay in conversion of licenses, and some prepayments.
"We believe these have come to light in the last couple of weeks as forecast models are reviewed as part of the change in [chief financial officer] currently underway," Panmure added.
Panmure said the "funding update is disappointing," and believes the timing of the cash situation is likely to weigh on the shares.
The broker lowered its net present value to 515p per share from 524p.
By Jeremy Cutler, Alliance News reporter
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.
Related Shares:
Arecor Therape