Friday, 22 February 2013

Sareum Holdings


Sareum's small molecule drug discovery expertise is building value by developing drug candidates, focused on cancer and auto-immune disease, for licencing to pharmaceutical and biotechnology companies.

Sareum Holdings (LSE:SAR) Speculative BUY

Marketcap Approx: £20m
Shares In Issue: 1,492.18m

As we are all aware the Bio sector is about as high octane as it gets, As with the tech sector when these companies get it right they get it very right and when its wrong it can go very wrong.

Sareum Holdings spiked in 2011 with rumours being banded about that they have a cure for cancer causing a 18 fold rise over 3-4 trading sessions to excess of 4.5p, The company announced: 


Feb 7th 2011

A recent study for Sareum’s Aurora+FLT3 Kinase programme showed that the leukaemia regressed to such an extent that no detectable cancer could be found in any of the cases treated (ten in total)


March 4th 2011

A recent colon cancer pre-clinical model study carried out by The ICR demonstrates that the combination of a collaboration Chk1 inhibitor, dosed via the oral route, in combination with a chemotherapeutic, gemcitabine, demonstrates a greater than two-fold reduction in cancer growth rate compared to treatment with the same dose of gemcitabine without the Chk1 inhibitor.

Since then the company came back down to earth setteling in a trading range at 1.2p-2p throughout 2011 then eroding  from March 2012 through August 2012 to 0.62p.

By the end of the first week in August the shareprice movement reminded the market how lively Sar could be on the 7th August leaping like a salmon from 0.64p to a 2p high with the company announcing advanced stage in negotiations.

August 7th 2012

''The Company can confirm that advanced stages of negotiations are taking place with a potential licencing partner which may or may not lead to a licencing agreement regarding one of the Company’s research programmes.''
By late November the company were denying claims it was in discussions with Astra Zeneca however confirming they believed a deal would be done by the end of the calender year something Dr Mitchell had conveyed throughout 2012 in both press/media releases on multiple fronts.

Fast forward a few months and Sareum had agreed a seda line which offers a financial support whilst continuing in there negotiations, To date Sareum has not announced a deal Nor has it announced  failing to secure a deal. The facts of the matter are as stated above SAR have multiple compounds and scientific data indicating both Aurora+flt3 and Chk1 are showing ambitious progress.

With a rather normal stance so far I now want to concentrate on Tyk2 and the SKIL® Platform Not only are SAR armed with Aurora+flt3 and Chk1 they have progressed other pipelines and some quite significantly with there own inhouse platform to interpret and understand the development which is compiling a noticeable portfolio.   

I'm not a scientist but then you don't have to be to analyse the company briefly and identify that at 1.2p the company is starting to present speculative value.
From a technical view the stock has a historical support at 1.2p level and is showing oversold with signs of exhaustion and the bears retreating (For now!!!), The company is not in a downward trend nor has it been eroding therefore I suspect there will be some buoyancy emerging after the company drops 40% from the 2.18p high.

When Sareum announced the Seda facility Sept 2012 it opens 2 school of thought
1.) The company are likely to be in negotiations longer than suggested
2.) The company are giving themselves the leverage to negotiate the best deal for its shareholders

18th Feb 2013

Sareum’s CEO, Dr. Tim Mitchell, commented:
Our ongoing progress in our research programmes is very encouraging and we continue to discuss the commercialisation of these programmes with a number of interested parties. We are also now in a strong position to develop our programmes to later stages, should we so choose, which should mean a greater share of the end rewards and we will continue to consider this aspect alongside our various discussions with potential partners.

Hybridan have Sareum at 3.18p with only minimal consideration to the Skil® Platform

Before we head em' up and move em' out lets take a layman look at Sareum holdings and the current market conditions:
Sar are simply high risk high rewards stock that has a huge engulfing positive in there continuing progress of its compounds/Pipelines with speculative upside value since the recent pullback. It is my opinion that Sareum's Tim Mitchell works at his own pace and on his terms, However the company appears on the brink of a ambigious program.

The market is fraught with fear as ironically the Ftse achieves unbelievable highs yet the Bio sector  has yet to release the '' This is our year performance '' I would suggest we remain grounded whilst navigating our way into profitable positions.

All the best Doc

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