4D Pharma (LON:DDDD) says it is planning to move beyond its original AIM listing following its announced merger last month with Longevity, a NASDAQ-listed SPAC (Special Purpose Acquisition Company). The deal is still to be approved by the shareholders of 4D Pharma, so US investors are unlikely to see the stock until Q1 2021 at the earliest. 4D Pharma shares will continue to be available on AIM of course.
“It is a big step for 4D Pharma; it is a big step for any European biotech business to step across the Atlantic and become a US-listed business,” 4D Pharma CEO Duncan Peyton said in a call with Biopharma Reporter. “It is something we have worked on for a while.”
It is obviously a positive move for the company and reflects confidence on the part of management and investors. The NASDAQ listing would provide it with the capital needed to expand its research in the area of live biotherapeutic products (LBPs). These are orally-delivered single strains of bacteria naturally found in the human gut. 4D Pharma works on solutions for diseases like cancer using proprietary technology that helps to identify live biotherapeutics.
4D Pharma: fast evolving area of medicine
We think this is a fast-evolving area of medicine with some very exciting implications for the treatment of auto-immune diseases and Parkinson’s, both of which continue to elude ready solutions.
4D Pharma is also collaborating with Merck on vaccine research. LBPs could even provide breakthroughs for the treatment of asthma and other respiratory diseases. The company is keen to emphasise that its work is not just about gut-related diseases, and that its work also covers oncology and immune system problems.
It is well-positioned in the market for next generation research in an area of medicine that larger pharmaceutical companies are starting to take more seriously. For starters, 4D Pharma has been working with Merck for over two years, including on Keytruda, one of the biggest selling drugs in the world.
We also like biotech companies with a big library of patents and 4D has these in spades.
Investor interest has been intense
Investor interest in 4D has been intense – we saw 4D share bid up from 36.25 on 15 July, to peak at 174 on 6 October. The price has since fallen again and at the time of writing is trading at around the 110 level. This a stock which has the potential to trade at much more expensive levels – back in 2015-16 it was trading at over 1000. The key for investors is whether it can go back there?
Biotech stocks are not for everyone, and the way 4D Pharma has given up so much value over the last three years is illustrative of this. It is, however, in a pioneering area of medicine that is starting to make inroads in the treatment of diseases that are persistent in ageing developed world populations, and it is being taken seriously by big companies like Merck.
The move to a NASDAQ listing is an interesting one: we reckon this reflects interest from multiple US investors who would not be happy taking an AIM stake, and possibly buyers in the pharmaceutical space. One to watch if you don’t own it already.
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4D produces all natural products. Not drugs. A large number of Americans want to avoid taking drugs. Biotherapeutics fit nicely into this American culture.
The FDA has a binary categorization of anything which enters the body. It’s either a food or a drug. Such categorisation is silly. Which is kefir? More food than drug. The biotherapeutics from 4D are just like a single strain kefir which targets your ailment. That’s wholesome. That’s American.
In Europe even our treats like Tiramisu have a naughty edge.
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