Pharma/biotech sector in vogue on Covid-19 trial updates, and Future is delivering the goods

“The world is desperate for a coronavirus vaccine and it seems that investors were only happy to put their money in one place on Monday – healthcare,” says Russ Mould, Investment Director at AJ Bell.

“Markets had a shaky start to the new week with mixed progress in Asia and declines across Europe including a 1% decline in the FTSE 100 to 6,224.

“One of the select few stocks to rise on the FTSE 100 was AstraZeneca, extending a rally that’s been in motion since mid-June.

“Investors have warmed to AstraZeneca both on hopes that it will successfully develop a treatment for Covid-19 and the fact the company is making progress with other drug developments. Early stage trial data is set to be published today on its coronavirus vaccine so the shares could be in even more demand if the news is encouraging.

“On a similar theme, shares in Synairgen shot up by 188% on positive results from its clinical trial of a new treatment for Covid-19.

“Many small cap biotech stocks have this year gone from being unloved to the star of the show as far as investors are concerned, despite the considerable risks to their money if drug developments are unsuccessful.

“Synairgen’s share price has gone from 5.88p at the beginning of January to 103.98p, adding up to a 1,668% rise.”

Future

“There seems to have been an outbreak of real corporate responsibility among some of London’s listed companies in 2020, with publisher Future joining the list of businesses voluntarily handing back Government cash.

“It helps that the business is performing well through this unprecedented period. Its model has been built on buying specialist magazine titles cheaply and then migrating them to a digital platform which allows the group to make money through avenues like e-commerce and online advertising.

“This offer has arguably been well suited to lockdown, with people stuck at home with little to do, craving content on their chosen hobby or pursuit and, for those with the funds, potentially more liable to treat themselves by clicking on the link to that fancy new lens for their camera or premium makeup set.

“Clearly sales of traditional magazines will have suffered but Future has also managed to keep tight control of costs thus underpinning its ability to guide for results at the top end of expectations – a headline-grabbing achievement in the circumstances.

“Importantly the recent acquisition of TI Media is progressing well, and it will be interesting to see if this encourages the company to pursue further deals, particularly at a time when much of the publishing sector is on its knees.

“Any opportunities need to be balanced against the requirement for financial prudence amid continuing uncertainty over the economy.”

These articles are for information purposes only and are not a personal recommendation or advice.