Metabolic caught off guard by share spike
Tuesday, 06 July, 2004
Metabolic Pharmaceuticals was caught off guard yesterday when news of a favourable research report from US analysts Cohen Independent Research Group sent the company's shares up 65 per cent to close at AUD$1.65 after heavy trading.
The report suggested a worse case intermediate term share price scenario of $2.29, a best-case scenario of $4.67 and a buy recommendation. Before yesterday's run, Metabolic was trading at $1.00.
The company had expected the report to be released after the US 4th of July holiday weekend, and was taken by surprise when the report was made available on the Cohen group's website yesterday.
Metabolic CEO Chris Belyea said the report was part of Metabolic's strategy to raise the profile of the company prior to an anticipated listing on the US Nasdaq exchange next year. The company has allied itself with a number of consultants in the US to increase awareness in the lucrative US market -- a process paid for in part by the issuance earlier this year of MBPAU options with an exercise price of $1.25, and in part by cost reimbursement.
"This is about gaining awareness in the US -- we want US investor interest in the company," Belyea said. "We are also expecting another research report in the near future."
Belyea said the proposed Nasdaq listing would be contingent on success in the ongoing Phase IIb trial for the company's lead product, obesity drug AOD9604. It is anticipated that results from the double-blinded, randomised trial will be released in November.
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