In the spirit of not just publishing fluff when things go right, I thought I’d pen a few notes on Fusion Antibodies (FAB) as they provided a trading update this week and I am a shareholder!
I’ve actually completed a couple of research notes on the company recently, the latest part here
As I write this, the share price is down around 25% since I wrote my note. This is somewhat surprising but not completely when you consider how the junior small cap market works!
Personally I was pleased with the trading update which shows the company are on track to deliver a 79% uplift in annual revenue (despite CV19 in the midst). In addition, the company have two new strategic partnerships to broaden the companies reach in Asian markets (they hadn’t RNS’d that). We will see in the final results just what that revenue uplift translates into in terms of profit.
Most notably, the company are progressing with the Proof of Concept work for the MAL (Mammalian Antibody Library) and have achieved milestone 1 creating the proteins required for the next phase of the work to eventually create an antibody that can neutralise COVID-19, most likely buy way of a prophylactic injection treatment for someone with the illness.
It’s a bit complicated but that means using the proteins to generate the antibody producing cells as the next step. Note also the proteins have been made available to other diagnostic companies for commercial development (I’d suggest with a kick-back for Fusion although no commercial terms were mentioned – shame!)
As I explained in my recent note, validating the library such that it can develop a successful antibody (for any application CV19 or Oncology) is a game-changer given a successful antibody development could theoretically yield hundreds of millions to Fusion in the right scenario.
I struggled deciphering the RNS myself and the RNS was hardly inspiring or clear on what milestones remain to achieve the end goal either for a successful antibody as a therapeutic for CV19 or determining the MAL has been validated i.e. you need to complete A, B and C and we have completed A.
This in my view is what caused the hot money to leave and a drop in share price but that could be a premature mistake. Had for example the RNS given a timeframe on remaining milestones and what they would deliver, investors would have had something to chew on, especially given the company are targeting an end solution for CV19 this summer!
Personally I look forward to the next update given the company have achieved the first milestone and the prospect of the company casually dropping an RNS to say they have developed a successful antibody to treat COVID-19 would be an interesting 7AM wake up call!
Aside of this the company are growing revenues and are clear experts in their field with blue-chip clients so one I’ll happily sit on longer-term with the prospect of an all game-changing RNS that could drop anytime!
But please keep us updated Fusion on any further milestones !
Research materials prepared based upon my own analysis and research. Accuracy cannot be guaranteed and research notes should not be taken as investment advice. Please always do your own research.