Yesterday's trading: Phytopharm shares take off
Every dog has its day. Biotech company Phytopharm certainly shook the small-cap area of the market to its foundations with a spectacular gain of 21.37p, or 348%, to 27.5p.
Geoff Foster: Buyers were back in town helping the Footsie close 101.95 points up.
The shares were blasted into their orbital trajectory after the firm reported promising early test results with its Parkinson's disease drug, Cogane. KBC Peel Hunt immediately prescribed the stock to clients and doubled its target price to 50p.
Phytopharm said the drug 'significantly reduced' Parkinsonian disability by 43% in macaque monkeys over 18 weeks. A 28-day Phase 1b clinical trial also found it to be safe and generally well tolerated in both healthy volunteers and Parkinson disease patients.
KBC's analyst Paul Cuddon said that the investment case for Phytopharm centres on Cogane. Today's impressive clinical and preclinical data demonstrate the potential for Cogane to become the first disease modifying therapy in the fast-growing £7bn Parkinson's disease market.
Cogane still remains a long way away from reaching the market and Phytopharm's shareholders have had their hopes dashed before. They still remember when the shares crashed 43% last November after Unilever said that Phytopharm's drug based on the hoodia plant was unsuitable for further development with its Slimfast range.
This dashed hopes for any commercialisation of one of the group's pivotal experimental products.
Buyers were back in town helping the Footsie close 101.95 points up at a year's peak of 5,256.10 and the FTSE 250 was 152 points better at 9,541.33. Forecast-beating quarterly results from computer chip giant Intel, showing the biggest second to third-quarter jump in revenues for more than 30 years, got proceedings in London off to a good start.
JP Morgan Chase then piped up with a much-better-than-expected third-quarter net income figure and the mood remained bullish right up until the close. Wall Street had the magic 10,000 level well in its sights with an opening gain of 81 points.
The latest Bank of America Merrill Lynch Fund Managers Survey for October says that investors' risk appetite has reached its highest point in more than three years amid continued optimism about the prospects for a global economic recovery and rising corporate profits.
Michael Hartnett, chief global equity strategist, said: 'Equities remain in a sweet spot, fears of a double-dip have receded, while worries about inflation and monetary tightening are not imminent enough to prevent a surge in risk appetite.'
Miners featured again as the dollar plummeted to a 14-month low, helping the price of gold rise to yet another record of $1,070, or £685, an ounce. Copper miner Kazakhmys led the way with a gain of 111p at 1,289p, additionally helped by favourable Goldman Sachs comment on its recent sale of a 25% stake in its Ekibastuz power plant to Samruk-Kazyna for £217m. Its 12-month target price is 1740p.
International Power blew a fuse at 276.2p, down 8.1p, after Morgan Stanley downgraded to equalweight from overweight. It reckons the utility has no growth and earnings momentum is turning negative.
DS Smith, the UK's largest producer of recycled paper and corrugated packaging, rustled up a gain of 11.2p to 130p after forecasting better-than-expected first-half profits.
News of further contract wins in the UK education sector and industrial work in Dubai helped Interserve put on 17.2p to 255p. Panmure Gordon's target price is 280p.
Punters' favourite Gulf Keystone Petroleum jumped 10.25p to 108.25p on rumours of an imminent announcement. The shares were recently 'roofed' by news of a 'value transforming' discovery in Northern Iraq, which could yield twice as much oil as had been estimated.
Dana Petroleum put on 20p to 1,450p and Faroe Petroleum 2.25p to 143.25p after reporting that the Tornado exploration well offshore West of Shetland has discovered oil and gas. Dana has a 30% and Faroe 7.5% working interest in the well.
Only days after wheeling out a profits warning, money transfer company Earthport revealed that takeover discussions with interested parties have been terminated. The shares slumped 2.5p to 39 as long-suffering investors ran for the exit ahead of Tuesday's results.
Coal of Africa responded to revived Mittal takeover gossip with a gain of 4.25p at 130p.
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