Shares in drug discovery company ImmuPharma (IMM:AIM)  collapsed on Tuesday demonstrating just how risking early stage drug development really is. 

The company's lead drug Lupuzor failed to show meaningful statistical benefits over placebo in Phase III trials. Lupus is an autoimmune disease that affects millions, famously including American singer and actress Selena Gomez.

This massive blow has wiped million of pounds off the company's market value as investors dump the stock. The share price has crashed 85% to 22.7p leaving the firm's market value at just £32m.

The stunning scale of the sell-off is perhaps no surprise considering the £10m of fresh funding raised from investors as recently as January. That cash call was struck at 144p per share.

In April 2017, we wrote about the blockbuster potential that had started to build among investors for Lupuzor. Those hopes look largely dashed now. 

ImmuPharma is far from alone at falling at clinical testing hurdles. Last year, Circassia (CIR) was forced to abandon its anti-allergy programme after its dust mite allergy study failed to show the treatment had a ‘significant effect’ compared to placebo.


ImmuPharma will undertake a review of the data and work with regulatory advisers to determine their next move. Talks are also ongoing with several large pharma companies.

‘Our initial reaction is to assume Lupuzor is no longer a meaningful candidate for marketing authorisation for the treatment of lupus and we now look to what would be a reasonable value for the business,’ comments Panmure Gordon’s Mike Mitchell.

He argues for a £31m enterprise value, which strips out the anticipated £11m of net cash he estimates that the company will hold come year end on 31 December 2018.

That implies a 22p share price.

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Issue Date: 17 Apr 2018