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par Tissue Regenix Group PLC (NASDAQ:TRX )

Hardman & Co Insight: Survival of the UK life sciences sector

Hardman & Co Research
Hardman & Co Insight: Survival of the UK life sciences sector

25-Jun-2024 / 09:43 GMT/BST
The issuer is solely responsible for the content of this announcement.


Hardman & Co Insight: Survival of the UK life sciences sector

 

For two years running, the Hardman & Co Healthcare index has declined, underperforming both the FTSE 100 and the FTSE All-Share indices. This is quite unusual for healthcare stocks. Apart from the general economic influences, which have made institutions more risk-averse, there was a common knowledge that several companies were in need of additional working capital; so, share prices were marked down in anticipation of equity raises.

 

However, the small- and mid-cap life sciences sector has always been capital intensive, so has anything changed? Consolidation within investing institutions and pension funds has created a much smaller number of groups with enormous funds under management that are much less interested in small, capital-intensive companies. Consequently, the pool of institutions interested in such investments has diminished significantly.

 

Because valuations commanded by several large London-listed companies are well below their international peers, rumours are circulating constantly about an exodus to overseas markets, particularly the US. It is no different for the life sciences sector. Among the small caps, three have already delisted from London this year over poor valuations, with at least one of them expecting to relist in the US when the time is right.

 

Things need to change. Institutional investors in the London market must be more supportive of its life sciences industry, which, historically, has offered them very good returns, otherwise, we fear that the sector could disappear within a few years.

 

But low valuations do throw up opportunities. We highlight Tissue Regenix, which has two regulatory approved tissue technologies that are in much demand; barriers to entry are enormous because of the regulation and controls involved in the processing of human tissue, with customers preferring to leave these technicalities in the hands of a specialist. Following investment in manufacturing capacity expansion, TRX is showing consistent, above-average sales growth, is cash generative and profitable. Yet the market values it at only $57m compared with the $150m spent to get it where it is today.

 

Please click on the link below for the full report: https://hardmanandco.com/research/corporate-research/11260/

 

To contact us:

Hardman & Co

9 Bonhill Street

London

EC2A 4DJ
www.hardmanandco.com

Follow us on Twitter @HardmanandCo

Contact:

Martin Hall


 

 

mh@hardmanandco.com

 

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About Hardman & Co: Hardman Research Ltd, trading as Hardman & Co, is an appointed representative of Capital Markets Strategy Ltd and is authorised and regulated by the Financial Conduct Authority; our FCA registration number is 600843. Hardman Research Ltd is registered at Companies House with number 8256259. Attention is drawn to the important disclaimers at the end of the report.



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The issuer is solely responsible for the content of this announcement.


End of Announcement - EQS News Service

1932481  25-Jun-2024 

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