Cancer drug development company, Sareum holdings (SAR) soared to 3.25p first thing this morning on hype about its new cancer development drug. The shares have risen almost three fold in the last few few days on a stampede into the shares. But unfortunately beyond the hype a few pieces of important information seem to have been.forgotten. The chk1 inhibitor for bowel cancer is in a preclinical phase and although at this very early stage, results have been.encouraging, ultimately 90% of new drugs don't make it to market because of safety or efficacy issues.
Also it will take 5 years at least for the drug to hit the market as they are years away from a regulatory submission. They have around a £1 million left in the bank, so a placing is likely as big drug companies will not pay a big upfront payment to Sareum until certain milestones have been met. Also the company will want to expoit its RNS to the full, and fill its coffers whilst it can. I can tell you that if a placing happens it won't be at 3p.
I see that sense has prevailed and the shares are now down 10%, after being up over 30% earlier. The smart money bolted when it hit 3p, and the poor private investors who believed the hype can now get 2.1p. A great "pump and dump" if i ever saw one! I hope too many new investors in AIM stocks haven't lost too much! Be careful out there, its a jungle!!
Oh I don't think this is the last we've heard of SAR. I think this will bobble up and down all year. They seem quite proficient in their work and good with the RNSs. But agreed that the actual realities of this share ever hitting any decent, steady double figure could be months or years away, given the stages it has to go through. But now the newsflow has started who knows, there may be even more surprises to come.
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