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Director Deals - Abcam directors show their faith

Published: 19:00 12 Apr 2014 AEST

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The directors of the research group Abcam (LON:ABC) are backing the company for success after a rather lacklustre start to 2014.

In the last week directors have acquired more than £1mln-worth of stock in the company, which sells research-grade antibodies.

That buying was led by chief executive Jonathan Milner, who on Thursday followed a £67,000 purchase at 373p per share with one for £989,000 at 381.95p a share.

His holding stands at 13.9%, worth £106mln.

Tory peer and former Marks & Spencer non-exec, Lady Louise Patten, announced her elevation to the Abcam board by splashing out just £50,000 for a modest stake in the Cambridge-based group.

The share purchases have come after more than a quarter has been wiped from the value of the business.

This followed a trading update in January in which it gave a less than enthusiastic assessment of prospects for the US market.

However, the tide may be turning. Earlier this week, City broker Canaccord upgraded its recommendation.

Analyst Julie Simmonds said: “We believe the long-term opportunity for Abcam remains significant, as the research use of antibodies will continue to grow (we estimate a growth rate of 8-10% annually) and Abcam remains a leader in this market.”

These high-value materials are crucial in research tackling diseases such as cancer and neurological disorders and the group plays a central role in sourcing and producing them.

Consistency supply is key, so researchers who trust Abcam’s brand will often make repeat orders over the lifetime of a project, keeping a steady stream of cash flows rolling in.

Canaccord’s Simmonds said: “The historic competitive advantage driven by its sophisticated website and antibody data sheets has declined in recent years as competitors have also developed an on-line presence.

“However, Abcam-branded antibodies are now well integrated into the scientific community, as illustrated by the continuing increase in citations…This gives Abcam a long-term repeat revenue opportunity which underpins its sales expansion.”

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