Henderson Morley - The 2006/2007 thread.

Novembers GECR update is with us

Henderson Morley*

Key Data
EPIC HML
Share price 1.58p
Spread 1.50 - 1.65p
NMS 10,000
Market cap. 6.9 million pounds
12 month range 0.67p - 5.78p
Market AIM
Website www.henderson-morley.com
Sector Biotech
Contact Andrew Knight.
0121 442 4600

Henderson Morley* has had a quiet month on the news front after the flurry of licensing activity over the autumn. Notably, the chairman and another director have since transferred 3.3 million shares to their SIPPs at a price of 1.64p. The two board members retain an interest in 26% of the company.

In September, Henderson announced a licensing agreement with US pharmaceuticals firm, Cutanea Life Sciences, for new applications of ICVT for the treatment of dermatalogical conditions. The agreement and takes the form of an exclusive American, Mexican and Canadian wide licence to bring products to market through a programme of pre-clinical and clinical development of treatments either by Cutanea or through a sub-licence.

Under the terms of the agreement, Henderson Morley will receive up to 6.675 million dollars in development and commercialisation milestone payments up to the point at which the application receives regulatory approval, and will receive royalties on net sales thereafter.

The group will now focus on working towards commercialisation of its patent portfolio in terms of both human and animal health, along with the development of ICVT. To this end it has secured funding of 1.2 million pounds through the issue of 60 million new shares.

Following clinical development and regulatory licence approval, sales in excess of 1.5 billion dollars of the ICVT product could be achieved over ten years. This would generate potential royalty revenues in excess of 115 million dollars for Henderson.

The shares have eased back further this month to 1.55p. With so much development going on at this drug discovery stock, further newsflow in the near term is far from unlikely. Buy.