Up over 50% in 2024, could this penny share keep going?
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Many buyers search for penny shares that may provide very robust returns. In actuality, there will be lots of disappointments. However one penny share on the London market with a £70m capitalisation has already elevated in worth by 53% to date this 12 months.
Would possibly it hold going – and may I purchase some now?
Robust performer
Whereas the current achieve appears good, that isn’t all. Since September 2022, the share worth has greater than tripled.
That’s definitely the stuff of investor goals!
Since itemizing as an impartial firm in 2021, the monitor document of the penny share in query has been extra modest, however it’s nonetheless 29% greater than when it began buying and selling.
The corporate in query is Poolbeg Pharma (LSE: POLB). Previous to its itemizing, Poolbeg was a part of Open Orphan, now fairly daftly named hViVO.
What’s behind the surge
So, why has Poolbeg been doing so effectively recently?
One purpose has been a constructive set of outcomes from a human problem trial of one of many group’s merchandise, POLB 001. Poolbeg has prolonged its patent portfolio across the drug and is increasing its attainable utility as a preventative remedy for most cancers immunotherapy-induced Cytokine Launch Syndrome. Final week it introduced new US patent protections associated to the POLB 001 programme.
The corporate has additionally been working in different areas, with AI-led programmes figuring out potential therapy candidates for its choices.
Might issues get higher from right here?
The manager chairman and chief govt each purchased shares within the firm utilizing their very own cash in February.
I feel there might be important positive aspects nonetheless forward for the penny share relying on how effectively its drug growth programme proceeds and whether or not it could actually commercialise it. The primary attraction for now could be POLB 001, however Poolbeg’s wider portfolio might but end up to do effectively.
Presently, although, we have no idea. Creating medicine and bringing them to the market, with or with out AI, is an costly enterprise. The loss-making agency booked a post-tax lack of £4m final 12 months. In the meantime, it continues to generate zero revenues.
That’s not unusual within the early phases of a drug growth firm. First the analysis and commercialisation must occur, which prices cash. Solely then, if profitable, do revenues sometimes begin to come.
After they do, although, the economics of such a pharma enterprise will be reworked.
Wait and see
That explains why my strategy is to keep watch over this penny share with out shopping for it, for now.
If the drug growth programme continues to look promising and the corporate strikes nearer to producing significant revenues, I feel the share worth might rise. However that’s advantageous by me.
Sure, I would have the ability to purchase cheaper now than later. However that is dependent upon how the enterprise strikes ahead. I’d fairly look forward to extra proof of a viable enterprise mannequin earlier than shopping for this penny share, even when meaning I find yourself paying a better worth for it down the street.