Biotech Alchemia (ACL) hit its highest level this year as investors buy into hopes that the current financial year would mark an important milestone for the company.
Alchemia is expected to post a maiden profit in 2013-14 thanks to growing royalty payments from its distribution partner Dr Reddy, which has licenced Alchemia’s technology to manufacture a generic anti-coagulant drug, fondaparinux.
The stock surged 9.3% to 47 cents this afternoon but the increasing royalty payments aren’t the only reason to warm to the stock, according to RBS Morgans.
The broker notes that the result for its phase 3 trial on a colon cancer drug treatment is expected in the June quarter next year and that the biotech’s fondaparinux could secure European regulatory approval.
RBS Morgans is urging investors to buy the stock and has a share price target of 71 cents a share.
Alchemia is the best performer on the Uncapped 100 this afternoon.