Biotech company Bergenbio has experienced a turbulent development on the stock exchange. Inventory It made a big splash last spring Following news that one of their drugs was to be tested in a British study, an overall rise of 30 percent over the past year.
For major shareholder in biotechnology company Trond Mohn (79), this initially paid off very good results. But in 2022, things changed completely for the company, which is developing drugs and technology for use in treating cancer and treating corona.
So far this year, the share has seen an almost continuous decline. And after the brokerage firm DNB Markets revised its target price downward from NOK 22 to NOK 9 and switched from a buy recommendation to a hold on Monday, the stock continued to decline on the exchange.
Mohn wrote in a text message to DN that he still has good faith in the company and points to the 100,000 shares he bought in the company last week.
In an uncertain market, only companies with future income are severely penalized, Mohn adds.
Upon opening, the stake is down a full 10 percent, and so far this year Bergenbio’s share is down more than 60 percent. The drop means that Mohn and his company, Meteva, lost more than a quarter of a billion in their stock in the past year. Bergenbio has a market capitalization of about NOK 730 million.
Paper loss 24 million
Despite the angry price, major shareholder Mohn and his company bought another 100,000 shares at NOK 10.19 on Wednesday last week. After the purchase, Mohn owned 24.1 million shares in Bergenbio.
The crash in Bergenbio stock on Monday morning corresponds to a stock loss of about NOK 24 million for Mohn. And that in just 17 minutes.
When Bergenbio presented its quarterly report for the second quarter of 2022, it showed that the company had operating profit minus NOK 88 million from sales of NOK 0 million. In the lower quarter of last year, operating profit was minus 92 million NOK.
Ahead of the summer, it also became clear that Bergenbough is making a change of strategy which means they are finishing two studies. Furthermore, there will be research into technology related to lung cancer and corona disease that will be the focus of attention.
First, we don’t see any value in the Corona race. It’s too late on the ball, there’s a lot of competition and we don’t believe there’s a huge market for this in the future. For the Lung Cancer Project, we think this could be very interesting in the long run. But in the short term, we don’t see any major “catalysts,” non-DNB analyst Heller Hollum tells DN.
It also notes that the company has stated that it will not prioritize sharing data from the two completed studies with the market.
– I am not saying that this means that the data is bad, but if there was good data it would be very useful information for the market. Whereas, bad data would be very negative news for the entire technology. So, it’s a little troubling that the company chooses not to prioritize getting this information out, says Hollum.
He will face challenges
Despite the fact that the company has reduced its investment to two major races, Hollum does not believe that the company’s costs will fall significantly.
We anticipate that Bergenbio will have to raise capital over the next 12 months, and unfortunately we think they will face challenges now that the market is completely different. Besides the fact that we don’t see any short-term triggers, this isn’t a share we’re currently recommending our customers buy, he says.
The company had a cash balance at the end of the second quarter of NOK 292 million from NOK 368 million at the end of the previous quarter.
This year, the company will conduct a study on lung cancer, the Phase 1b/2a study, which will focus primarily on testing and research into the safety of the technology, and the results of this study are expected to come in the second half of 2023.
How important is it for these results to be good?
– It will be very important. They’ve demonstrated that technology has an effect on people before, but more clinical data and statistical evidence about the effect is still needed, says Hollum and adds:
Since the two studies that were canceled should give us more answers about the impact, we are very interested in this data because in our opinion it is important to convince the market that the reason for the other two studies being canceled was because of strategic path choices and not because of questions about the lack of impact of technology.(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using the links that lead directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
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