The antibody specialist's shares were hammered after a steep revenue decline and a thinning cash pile forced a review of working capital.
Fusion Antibodies (AIM: FAB) saw its shares crash more than 40% in early trading on Thursday after the antibody discovery specialist revealed a sharp fall in first-half revenue and confirmed it is reviewing its working capital position.
The group told shareholders at its annual meeting that revenue for the six months to 30 September had fallen to roughly £457,000 from £838,000 a year earlier, while gross margin collapsed to 10% from 30%, as difficult market conditions continued to bite.
Fusion ended the period with just £135,000 in cash, though it said it expects to receive more than £100,000 in grant funding shortly. Management has already moved to cut costs, including freezing recruitment, but the scale of the cash shortfall and the board's working capital review have fuelled investor fears that a fundraise, likely a discounted placing, may be needed to shore up the balance sheet.
Amid the trading setback, the Belfast-based company pointed to progress on the science side of the business. Its DR5 cancer antibody programme delivered encouraging results in an initial mouse study, with two of four antibody formats significantly slowing tumour growth, and a second study is now being prepared. Its OptiMAL discovery platform has also attracted interest from the US National Cancer Institute, with which Fusion is negotiating a further agreement, alongside new patents secured in Japan, Canada and other territories.
Fusion said its priorities for the second half are to convert its commercial pipeline into revenue and to broaden adoption of its technology, but with cash reserves thin and no confirmed funding solution in place, investors will be watching closely for an announcement on how the working capital gap will be bridged.
This report is based on Fusion Antibodies’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Julia Koblitz on Unsplash.
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