Covid-19 trial firm Synairgen is up 955%. Here’s what I’d do now

first_img Tom Rodgers has no position in the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Tom Rodgers | Monday, 27th April, 2020 | More on: SNG Covid-19 trial firm Synairgen is up 955%. Here’s what I’d do now I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Enter Your Email Address I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images center_img AIM-listed biotech firm Synairgen (LSE:SNG) has been on a rocket ride since markets crashed in March 2020. In fact, the share price is nearly 1,000% higher than it was at the beginning of January.The real kicker came on 18 March. On this day, the FTSE 100, S&P 500, Dow Jones and practically every other world stock market index plummeted. But SNG shot up because of a release that detailed how the company’s wholly-owned SNG001 treatment would be trialled on coronavirus patients.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…SNG001 is an inhaled version of the antiviral protein interferon-beta-1a. In its injectable form, under the brand name Avonex, the drug is produced by NASDAQ-listed Biogen and used to treat symptoms of multiple sclerosis. The Synairgen formulation is converted into a fine spray and delivered to the lungs in much the same way as asthma medication.Covid-19 in 2020Looking at a short-term chart of the Synairgen share price I can see very many peaks and troughs. This says to me that the market is unsure of its true fair value.It’s only natural in the middle of a global pandemic for investors to consider buying companies with potential Covid-19 treatments.The medical world is racing to find treatments and vaccines for the disease caused by the SARS-CoV-2 virus. Clearly there is a newly-urgent need to assess new treatments for the respiratory illness that can occur as a result.But I would warn that such investments come with significant strings attached.At a market cap of £75m Synairgen is about the smallest-sized company I’d be happy to trade shares in. At this level, liquidity is likely to be poor. This means there might not always be sellers available when you want to buy, or buyers when you want to sell.The good, the bad, the uglyThe Synairgen board of directors is stacked full of pharma heavyweights. These include non-exec director Dr Bruce Campbell, a visiting professor in pharmacology at King’s College London, and chief scientific officer Dr Phillip Monk, a respiratory disease specialist.I’ve written on other Covid-19 related companies recently, like Novacyt and Omega Diagnostics. The first of these has seen its share price grow by 2,750% since the start of January.But investing in unproven firms is a dangerous game for long-term investors. For every success there are many more companies that cannot follow through on their promises. And the smaller the firm, the more issues it will have with scale. If governments suddenly want 10m of their treatments, there would be huge manufacturing and supply chain challenges.The process of bringing drugs to market is also long, slow and expensive. Costs are high for medical research companies as they have to invest significant sums in clinical trials and stringent regulatory requirements.So when we look back through the balance sheets for Synairgen over the last five years we can see uneven revenue and profits. For example, 2017’s annual revenue was £5.03m, with £1.63m in pre-tax profit. In 2018 revenues were £100,000 with a pre-tax loss of £4.1m.I’d say an investment would be fine for seasoned traders and those who know their biotech inside and out.For retirees and novices, I would urge more caution. If you intend to sit on an investment for 10 years, you could be left holding shares at a loss when everyone else has scarpered. Simply click below to discover how you can take advantage of this. “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Our 6 ‘Best Buys Now’ Shares See all posts by Tom Rodgerslast_img

Leave a Reply

Your email address will not be published. Required fields are marked *