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Beaufort Securities Breakfast Alert – Amryt Pharma, Legendary Investments

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Wishing you a Merry Christmas and a Happy New Year! 

Breakfast Today is taking a break for the festive period. Today's issue is the last of 2017. We will be back again on Tuesday, 2nd January 2017. We wish all our readers a very Merry Christmas and a Prosperous New Year!

Markets

Europe
The FTSE-100 finished yesterday's session 0.25% lower at 7,523.22, whilst the FTSE AIM All-Share index was up 0.07% at 1,022.49. In continental Europe, the CAC-40 finished 0.56% lower at 5,352.77 whilst the DAX was down 1.11% at 13,069.17.

Wall Street
Last night in New York, the Dow Jones closed 0.11% lower at 24,726.65, the S&P 500 fell 0.08% to end at 2,679.25 and the Nasdaq eased by 0.04% to 6,960.96.

Asia
In Asian markets this morning, the Nikkei 225 was down 0.12% at 22,864.28, while the Hang Seng was up 0.46% at 29,368.43. 

Oil

In early trade today, WTI crude was 0.1% lower at $58.03 per barrel and Brent was down 0.17% at $64.45 per barrel.

 Latest Video

On Monday, 18th December 2017 Dr Dan Gooding, CEO of Nuformix answered questions posed by private investors at the Beaufort offices. Click here to see the interview.

 

 Company news

Amryt Pharma (LON:AMYT 20.00p) – Speculative Buy
Amryt Pharma yesterday announced that it has appointed Patrick Jordan as Vice-President of Global Distributor Markets. Mr. Jordan will support Amryt's entry into the Kingdom of Saudi Arabia market, alongside its planned expansion into new territories in Central & Eastern Europe, Middle East, North Africa, and beyond. Mr. Jordan has worked in the pharmaceutical industry for the last 18 years including senior roles at Pfizer and Merck & Co (‘MSD’). At MSD, Mr. Jordan was the Managing Director of Saudi operations and Regional Managing Director of Eastern Europe and North Africa business. Amryt’s CEO, Dr. Joe Wiley, commented “[the appointment] reflects the progress we are making as we focus on our expanding opportunities across global markets”.

Our view: Lojuxta is approved for the treatment of Homozygous Familial Hypercholesterolaemia (‘HoFH’) and AP101 is currently in pivotal Phase 3 trials for the treatment for Epidermolysis Bullosa (‘EB’). Amryt has exclusive marketing rights for Lojuxta in the EEA, Middle East, North Africa, Turkey and Israel. Recently, Amryt announced that it signed an exclusive distributorship agreement for Lojuxta and AP101 in the Kingdom of Saudi Arabia with Faisal Musaed El Seif Saudi Pharmaceutical Company. This is a clear demonstration of global interest in Lojuxta along with AP101 as the latter moves closer to approval (interim analysis expected in H1 2018). The global market opportunity for EB is estimated to be over €1.3bn. Amryt’s successful raise of €15m gross in October 2018 along with its €10.9m existing cash (at 30 June 2017) and undrawn EIB debt facility of €10m are together more than sufficient to fund AP101’s Phase 3 clinical trials to completion. Beaufort’s valuation indicates Amryt is presently valued less than Lojuxta’s prudently discounted future cashflow (no value attributed to AP101 nor AP102!). Beaufort reiterates its Speculative Buy rating on the shares with target price of 65p.

Beaufort Securities provides corporate sponsored research to Amryt Pharma Plc

 

Legendary Investments (LON:LEG 0.13p) – Speculative Buy
Legendary this morning announced that it has entered into an agreement to acquire 9.7% of Crowd for Angels (UK) Limited (‘CfA’), an owner-operator of the crowdfunding platform, ‘Crowd for Angels’, at a post money valuation for CfA of £3.7m. The 9.7% stake will be paid for through the issuance to CfA of 248,275,862 Legendary ordinary shares of 0.1 pence nominal value each which equates to 0.145p per Legendary Share (rank pari passu). The closing price on 19 December 2017 was 0.14p per Ordinary Share. Admission of new ordinary shares to AIM is scheduled to occur on or around 29 December 2017. Following admission, the company's enlarged issued share capital will comprise of 3,292,912,755 ordinary shares with one voting right per share (no shares in treasury). Legendary’s Executive Chairman, Zafar Karim, commented “Legendary was the first outside investor in the successful tech company, Virtual Stock Holdings Limited. With its recent investment in IBS Corporation Limited, Legendary has a stake in a banking services platform and now, with the investment in Crowd for Angels, Legendary has a stake in a fintech platform. Technology, finance and its confluence, fintech are exciting sectors that will and are moulding the future”.

Our view: This is an encouraging move for Legendary. CfA was among the first crowdfunding platforms to be authorised by the FCA and approved by HMRC to manage the Innovative Finance ISA (IF-ISA). Since its launch in 2014, CfA has successfully completed 9 fundraisings and helped raise over £3m (both debt and equity) for investee companies. It is also the first crowd funding platform to be launching its own Liquid Crypto Bond with attached crypto tokens through an Initial Coin Offering (‘Liquid Crypto Bond’). With the imminent launch of its £50m Liquid Crypto Bond, CfA is in exciting phase of its development. For the year ended 30 June 2017, CfA had losses of £192,986. Simply valuing Legendary’s 7.2% Virtual Stock participation on the basis of Notion Capital’s recent funding injection, this on its own, provides a 20% or so premium to LEG’s current market capitalisation. In expectation of Legendary’s participation in VS becoming more realistically valued within LEG’s wider portfolio, Beaufort retains its Speculative Buy recommendation on the shares along with its 0.7p price target.

Beaufort Securities acts as corporate broker to Legendary Investments plc

 

To read Beaufort's full research archive click here

 

 

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