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One unloved small-cap biotech to watch – MoneyWeek

Todeterminewhetheradrugworksandissaleable,itsessentialtoknowwhathappensonceitisinsidethebody。

Forhowlongdoesitsdeliveritstherapeuticbenefit?

Howaccuratelyisthisdelivered?

Andhowmuchcollateraldamageiscausedintheprocess?

OnepromisingpennysharecompanythatisworkingonwaystoradicallyimprovedrugdeliveryisLipoxen(LSE:LPX)。

WhenIdroppedintohisofficelastweek,chiefexecutiveScottMaguirewasadamantthatLipoxenstechnologyislivinguptoitshighpromise。

ButhewasalsofrustratedaboutUKinvestors。

Itseemstheseinvestorsareworriedabouttherisksinvolvedinhiscompanysbusiness。

Whattheydidntseemtorealise,Maguiresaid,wasthat,comparedwithotherbiotechs,therisksassociatedwithLipoxenarelow。

Thisisbecauseitissimplyreformulatingexistingdrugsandvaccineswithnaturaldeliverytechnologies。

Andontopofthat,allclinicaltrialstodatehavebeenverysuccessful。

Ifonlyinvestorscouldseethis。

Whybiotechsharesareoftenhugelyundervalued

FrustrationwiththeinvestmentcommunityisacommoncomplaintofleadersoftheUKsbiotechsector。

Inpart,thisisduetolackofexpertiseintheCity。

Butasecondfactor–onethatcertainlyappliestoLipoxen–isthatbiotechsareoftenpreventedfrompublicisingtheirsuccessesbecausetheirmajorpharmaceuticalpartnerswouldratherkeepthemquiet。

Othersmall-capnews

InlastThursdaysPennySleuthIsaidbusinessatEmpresaria(ticker:EMR)hasbeenonanupswinginrecentmonthssomethingthatcouldbeconfirmedatnextThursdaysAGM。

Watchthisspace!

Today(3June)sharesintheAIM-listedinternationalrecruitmentagencyjumped15%asitsAGMstatementconfirmedthestrongtradingIdescribedlastweek。

Thecompanysaysfull-yearprofitsaresettobemateriallyaheadofmarketexpectations。

SotodayLipoxenisvaluedatjust£10m–eventhoughasinglelicensingdealforoneofitsdrugdeliveryplatformscouldbeworthamultipleofthis。

Thequestionishowlonginvestorswillhavetowaitforthattohappen。

AschairmanBrianRichardspointsout,thisisthestagethatrealshareholdervalueisgenerated。

Theanswertothisquestion,asLipoxenknowsalltoowell,isnotentirelyinitsownhands。

Inordertooffsetthehugecostsinvolved,Lipoxenlicensesitsknow-howouttootherswhocanconductclinicaltrials。

Lastyearwasataleofdelaystoseveraloftheprojectsthatshouldprovetheworthofitsdrugdeliveryplatforms。

Onetrial,conductedbyRussianpartnerFDS,wasdelayedduetoalackoffinance。

AsecondfortheUKsTechnologyStrategyBoardwasupsetwhenleadmanagerCambridgeBiostabilityLtdwentintoliquidation。

AthirdwasrescheduledwhenprojectleadertheSerumInstituteofIndia(SIIL)hadachangeofplan

ThebreakthroughtrialthatcouldsendLipoxensharessoaring

Ironicallythough,thislastsetbackmaycreatethebreakthroughforLipoxen,becausethechangetoSIILsplanwastoexpandthetrial。

Whilethishasdelayedtheresults–whicharenowexpectedinthethirdquarterofthisyear–theywillbeallthemoresignificantwhentheydoappear。

ClaimyourspecialFREEreport:10simplerulesformaximisingyourpennyshareprofits

Receivethestockmarketwisdomofatop-levelpennyshareexpert

Youressentialguidetoplayingthesmallcapsmarket

ThetrialthatSIILisrunningusesover30patientssufferingfromanaemia(aconsequenceofkidneyfailure)。

Theyhaveallbeengiventhestandarddrug,erythropoietin(EPO),forthiscondition。

ButithasbeendeliveredintothebodyusingLipoxensuniquePolyXentechnology。

Typically,long-lastingtherapeuticagentssuchasproteinsandpeptidesarecarriedintothebodyincombinationwithpolyethyleneglycol,anartificialchemicalpolymerthatiswidelyusedinindustryandisaningredientofvehicleanti-freeze。

Insteadofusingartificialpolymers,Lipoxensapproachistousenatural,biodegradablepolymers。

Itbelievestheseshouldallowthedrugstoactforlongerandwithfewerunwantedsideeffects。

InthecaseofPolyXen,proteinsarecombinedwithpolysialicacid,atypeofsugarnaturallyoccurringinthehumanbody。

Becauseitdoesnttriggeranimmuneresponse,polysialicacidhasbeencallednaturesultimatestealthtechnology–theidealcarrieroftherapeuticproteins。

IunderstandthattheIndiantrialofPolyXen-deliveredEPOisgoingwell。

ButthisisfarfromtheonlystringtoLipoxensbow。

LipoxenshareholderBaxterInternationalhasbeenevaluatingPolyXenasadeliverymechanismforaseriesofdrugs,includingtheblood-clottingagentFactorVIII。

Wecouldhearnewsofthisindustrygiantsplansinthenextfewweeks。

Meanwhileintheareaofvaccinations,LipoxenhasaplatformtechnologycalledImuXen。

Thiscouldhaveanumberofbenefits。

First,itcouldallowmultiplevaccinestobedeliveredinthesamedose。

Second,itcouldmultiplytheireffectiveness。

Andthird,itcouldalsopermitvaccinestobestoredinambientratherthanrefrigeratedconditions。

Thisisespeciallyimportantinmanydevelopingcountries。

Clearlytheseinnovationscouldmakeabigdifferencetohealthcareandcouldsaveagooddealofmoneyaswell。

Evenso,theUKstockmarketseemsunwillingtotakeanythingontrust。

ThisisfrustratingforScottMaguire。

Butforpennyshareinvestorsitmeansthattheannouncementofanylicensingdealissuretobegreetedwithadramatichikeintheshareprice。

Thisisonetowatch。



ThisarticleistakenfromTomBulfordsfreetwice-weeklyemail