Beaufort Securities Breakfast Alert: Motif Bio Tekcapital SSE
Date
3/15/2016 6:39:50 AM
(MENAFN- ProactiveInvestors - UK) Proactive Investors 09:03
The Markets
Market opening: The FTSE-100 is expected to start this morning's session around 23-points lower.
New York: Wall Street ended slightly lower as low oil prices weighed on energy stocks. Investors remained cautious ahead of the Federal Reserve's meeting this week. The S&P 500 fell 0.1% with the materials sector losing the most.
Asia: Equities are trading lower as the yen strengthened against the dollar after the Bank of Japan maintained its monetary stimulus target. Furthermore a drop in commodity prices dampened investor sentiment. The Nikkei 225 shed 0.7% while the Hang Seng was trading 0.7% lower at 7:00 am.
Continental Europe: Markets ended in the green as a rebound in mining stocks shrugged off a fall in oil prices. Investors are reassessing the European Central Bank's stimulus measures and awaiting updates from the central banks of the US and Japan. Germany's DAX and France's CAC 40 surged 1.6% and 0.3% respectively.
Crude Oil: Yesterday WTI and Brent oil prices decreased 3.4% and 2.1% respectively. The spread between the two varieties stood at US$2.4 per barrel.
UK small caps: The FTSE AIM All-Share index closed 1.50% higher yesterday at 713.00.
Today's news
Eurozone industrial production rises most since 2009
As per data from Eurostat industrial production in the Eurozone increased 2.1% m-o-m in January 2016 the highest rate since September 2009 after declining 0.5% in December 2015. Industrial output received a boost from a 7.3% rise in the production of non-durable consumer goods. Capital goods and durable consumer goods grew 4.6% and 3.2% respectively. On a y-o-y basis industrial output expanded 2.8% after a 0.1% drop in the previous month.
Company News
Motif Bio (LON:MTFB 44.62p) - Speculative Buy
Motif Bio plc the clinical stage biopharmaceutical company specialising in developing novel antibiotics yesterday announced the appointment of specialist adviser The Fulford Group Ltd to assist Motif in developing and implementing strategies to commercialise iclaprim. Iclaprim is the Company's lead antibiotic which is currently in pivotal Phase 3 trials for the treatment of acute bacterial skin and skin structure infections (ABSSSIs) in territories outside of the USA. The Company expects that such partnerships could provide the Company with additional development capital in the form of upfront payments milestone payments and ongoing royalty fees.
Our view: The appointment of The Fulford Group a specialist strategic adviser in the healthcare sector is an important step towards the commercialisation of iclaprim. Motif intends to commercialise iclaprim directly in the US the largest pharmaceutical market in the World while out-licensing other territories to strategic partners in view of generating additional development capital. With trials expected to complete in the second half of 2017 Management is keen to begin engaging with strategic partners to commercialise its lead product candidate whilst retaining the all-important rights for iclaprim in the US the largest pharmaceutical market in the World. The Fulford Group will be instrumental in the delivery of such partnerships. Beaufort retains its Speculative Buy recommendation on Motif Bio plc.
Tekcapital (LON:TEK 48.0p) - Speculative Buy
Yesterday Tekcapital announced the acquisition of an exclusive licence to a patent application used to measure glucose in saliva. Arizona State University granted this licence to the company.
Our view: The receipt of the aforementioned licence presents Tekcapital with a range of opportunities. The patent is another addition to the company's portfolio of patents for the non-invasive measurement of glucose. The biosensor device allows traces of saliva fluid to be obtained from a biological surface for electrochemical analysis and the subsequent detection of analytes using disposable biosensor strips. This would reduce the discomfort experienced with the current detection method and encourage patients and pet owners to measure blood sugar levels more often. As per the World Health Organization around 350 million people worldwide have diabetes. Additionally recent research has forecast the diabetes diagnostics market to reach US$14.2bn in 2019 driven by an increase in incidences of diabetes and an ageing population. These numbers clearly reflect the market's enormous potential. Recently the company also acquired the exclusive licence to an additional energy harvesting technology from the University of Michigan. In light of the above arguments we maintain a Speculative Buy rating on the stock.
SSE (LON:SSE 1470.0p) - Hold
Yesterday SSE signed an agreement to sell 49.9% stake in the 349.6 megawatt (MW) Clyde Wind Farm business to Greencoat UK Wind (UKW) and GMPF & LPFA Infrastructure LLP (GLIL) for a consideration of 355m. SSE expects to expand the farm's capacity by 172.8MW by June 2017 which would reduce the buyers' stake to 30% with SSE retaining 70%. Furthermore SSE is expected to provide long-term management services for day-to-day operations for all 522.4MW in addition to offering a long-term route to the market's PPAs.
Our view: The sale of stake in Clyde Wind Farm is in line with SSE's disposal programme declared in March 2014 to sell non-core assets and onshore wind farms. The company's proceeds have surpassed the targets set at the time of announcement. SSE plans to use the funds to support future investments in a variety of energy assets. However SSE's exposure to commodity prices which have continuously been on the lower side for the past two years cannot be denied. Additionally the retail energy supply market is becoming increasingly competitive. Ambiguity surrounding the impact of the Competition and Markets Authority's investigation of the energy market also remains a concern for SSE. Therefore given the uncertainty around the company's future prospects we maintain a Hold rating on the stock.
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