Trade Idea: Fusion Antibodies – 40 bags back to highs and reasons why it just could do that!

Often market dynamics alone can see a share bounce back and return multiples but Fusion Antibodies (FAB) has a few more catalysts than that, as I explain in my latest blog !

Fusion Antibodies is a company I have covered before. Post my original research note which you can go back and read here the share price enjoyed a rise of over 100% giving anyone who followed the opportunity to de-risk, return initial capital and enjoy a free ride as I did myself.

The rise was largely due to the hype around pharma during COVID with the race on to find treatments, that and Fusion were growing revenues and developing their MAL (Mammalian Antibody Library)

As with many other hyped pharma stocks, Fusion quickly embarked on a downward trajectory. This coupled with some fairly stagnant revenue generation, delayed release of MAL, dire market conditions (any my God they’ve been dire!) and questionable management at the time, the share price continued to drop until recently culminating in an incredible 85% discounted placing!

Doesn’t sound great right? no, but do we write off shares that are potential ‘come back kings’? We probably shouldn’t, so in this blog I’ll provide my reasoning as to why I think the shares could bounce back taking a measured risk view.

Market Dynamics

I’ve lost count of the times I have seen huge share-price declines in AIM and main market listed stocks with pretty much all holders throwing in the towel and the share price with nowhere left to go (assuming its not insolvent!) but up. And I can list many that don’t just bounce back, but before you know it, a few months later you revisit the watch-list to see they are trading 100% up and in many cases a few more 100%. On a punt basis that would have allowed you to make an investment, take the capital back and either take profits or sit on a free ride!

So this is what I mean by market dynamics, the share price has bottomed (or close to it) where the RvR becomes acceptable or even shall I say compelling!

Fully Funded

The company through the recent fundraise and retail offer now have c£1.7m cash (about half the current £3.4M Market Cap) and this should cover all costs for at least a year and excludes revenue, based on previous cash burn.

New Management

After a tricky period, Fusion last year appointed Adrian Kinkaid as CEO and you will see from his BIO he has a wealth of experience in the sector. The point here is Fusion have fresh blood at the top (which was clearly needed) and a product to go with it OptiMAL.

Revenue Generating

Despite now just being a mere £3.4M Market Cap, Fusion are a revenue generating company with most of their revenue coming from bespoke client projects based upon their anti-body discovery technologies. The company predicts 2023 revenues to be no less than £2.7M and this factors in some delayed projects that would have seen revenue higher. Should some of those projects kick off, then revenues could well be higher. But a new revenue stream exists which is the key point here…

Commercialisation of OptiMAL

OptiMAL is Fusion’s Mammalian Antibody Library and as recently announced is now ready for commercial roll-out. This is a pivotal moment as the library has been a decade in development and the company finally have the full DNA library to support OptiMAL

OptiMAL will be rolled out as a suite of services with the first being commercially rolled out now ‘Mammalian Display’ RNS here

So in addition to existing revenue streams this is a key development for revenue growth and the company have also recently announced MOU’s with US Pharma – so we could see some partnerships and contracts that would be a re-rater for the share-price by themselves. There is even an interesting angle on AI here also.

Partnerships & Patents in Progress

As touched upon above, Fusion really now are at the stage where we could see some significant strategic partnerships whereby Fusion license out the OptiMAL services and patents they have and have applied for, the most recent mentioned here, a patent for antibodies that bind to an important target for cancer therapeutics.

So, in conclusion, with the share-price at an all time low (like many other companies!), a Market Cap of just £3.4M, with funding concerns out of the way for at least a year and cash covering half the Cap, revenue generation of £2.7M minimum expected in 2023 and the commercial roll-out of services years in development along with patents and partnerships along the way , Fusion could be a real turnaround play from here and perhaps one day soon re-visit the dizzy highs of 200p c.40 bags!

As always, I welcome feedback and you can follow me and message on twitter.


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.


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