finnCap has reiterated its 110p target price on ANGLE PLC (LON:AGL) in the wake of the £12.7mln fundraising which the Parsortix liquid biopsy company completed yesterday.
The AIM-listed firm placed 8,400,000 EIS/VCT placing shares, 15,443,282 general placing shares and 1,556,718 subscription shares with new and existing investors all at a price of 50p each raising more than the £12mln initial target following an accelerated bookbuild.
The issue price represents a discount of approximately 8.76% to ANGLE’s closing mid-market price of 54.8p on Friday, 22 June 2018.
In late afternoon trade on Tuesday, ANGLE shares were changing hands at 54.5p, up 0.9% on Monday’s close.
In a note to clients, finnCap analyst Mark Brewer noted that ANGLE has raised the cash “to advance the development of Parsortix clinical applications in breast cancer and ovarian cancer triage pre-surgery as well as prepare for growth ahead of FDA clearance for Parsortix, which we expect in CY 2019.”
The analyst for the ‘house broker’ pointed out that in a trading update for the period to April 2018, ANGLE indicated revenues of £0.7mln, together with better than expected year-end cash of £7.6mln and a £1.1mln tax credit received post period-end.
He added; “Given the later than expected start to the breast cancer study following final IRB approvals and the ongoing optimisation of the ovarian cancer gene panel, forecasts are essentially pushed out by one year.”
Brewer said: “Despite this and the dilution afforded by the placing, our target price rises to 110p, reflecting the clearer path to commercialisation as evidenced by agreements with Abbott and QIAGEN, and knowledge that the FDA trial is well into enrolment.
“We apply a 17.5% discount rate to cashflows and roll forward DCF to FY 2019. The target price implies an enterprise value of c.£157m.”