Synairgen Share Price Forecast December 2021 – Time to Buy SNG?
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Shares of biotechnology company Synairgen (LSE: SNG) are in the green today after closing at 212.6p as of December 15th (17:58 GMT). Back in October, SNG shares performed well after the company published an update on the trials of its coronavirus treatment. The company has been testing SNG001 over the past two years. This product is a formulation containing the antiviral protein interferon beta, to treat the virus.
Synairgen – Technical Analysis
Synairgen’s financial statement indicates a market cap of £ 41.275 billion with total assets worth £5.736 billion.
Moving averages for Synairgen such as Exponential Moving Average (10)(196.9), Simple Moving Average (10)(192.9), Exponential Moving Average (20)(191.7), Simple Moving Average (20)(189.3) and Exponential Moving Average (30)(188.1) are indicating a buy action. On the other hand, oscillators such as Relative Strength Index (14)(62.0), Stochastic %K (14, 3, 3)( 88.4), Commodity Channel Index (20)(99.4), Average Directional Index (14)(18.4) and Awesome Oscillator(11.5) are neutral.
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Recent Developments
This year, Synairgenhas achieved some milestones most notably, its flagship drug SNG001 is currently undergoing phase three trials. At the 8th European Scientific Working Group in Influenza (ESWI) Conference held between 4th to 7th December, the company presented in vitro and clinical data demonstrating antiviral activity for SNG001 in a poster and an oral presentation. The company is also testing the effectiveness of their product against the Delta and Omicron variants of SARS-CoV-2 and will make data available as soon as possible.
Their treatment has already made it through Phase 1 and Phase 2 trials and has been recommended SNG001 advances into Phase 3 trials in mild-to-moderate Covid-19 patients. The above progression has been possible due to the ACTIV-2 study which is sponsored by the US National Institute of Allergy and Infectious Diseases.
The company bases its product on the principle of delivering SNG001 directly into the lungs with the aim of restoring or boosting natural antiviral defences to prevent the virus from causing severe lower respiratory tract illness. If successful, it will not only help in the treatment of the coronavirus but also help in fighting other viruses as well such as MS.
Should You Buy SNG Shares?
Investors interested in SNG shares should look at the risk with SNG001, especially since it can prove ineffective in a larger trial group. Even if the trial is successful, it could take a while to be present in the market. Synairgen will have to try to keep the company open as it could run out of money if it takes longer than expected to get SNG001 to market, or if complications arise in the current set of trials.
Seeing costs swell when entering phase three trials is not uncommon for drugmakers. This is primarily due to the number of patients involved (610 patients in 99 different hospitals) and the associated hospital fees. The company reported a loss of £38.9 million which is more than 600% larger than a year ago.
Investors shouldn’t be concerned with the spike in costs as much as they should be with the market. It has a decent liquidity level (£ 46.2 million of cash) on its balance sheet. But SNG’s share price is exposed to a single-asset risk given the amount of capital being sunk into this single product. Thus everything rests on the success of its single drug product, which can concern a lot of investors. This can put off many investors who would rather add these shares to their watchlist rather than buy them.
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