MONEY MAIL: Profiting from ImmuPharma

By IAN LYALL FOR MAILONLINE
Updated:

After a phenomenal run, it's time to take profits on ImmuPharma.

A record high of 136p a share was achieved last week ahead of the update on the progress of key drug Lupuzor, which pulled the trailing stop-loss up to 109p.

ImmuPharma has been a stunning investment, delivering a 93% gain since we bought back in January.

There is no reason why the stock shouldn't recapture the ground it has lost in the past week since the slightly disappointing phase II trial data on the Lupus drug, particularly if chief executive Dimitri Dimitriou is correct in his assertion that the market has misinterpreted the information.

ImmuPharma's

Magnified return: ImmuPharma's shares have been a stunning investment


But in the short term at least I expect ImmuPharma to continue to drift lower as uncertainty shrouds the outlook for the company.

Currently we are awaiting a decision from its joint venture partner, Cephalon, which is responsible for late stage clinical trials of the drug.

A decision on when this decisive phase of research will actually start is imminent. But according to KBC Peel Hunt's Paul Cuddon, Cephalon may look to repeat earlier ImmuPharma studies on larger patient groups.

This could delay the launch of Lupuzor by two years to 2015, the analyst says, and gives GlaxoSmithKline's rival drug time to 'establish a more dominant position in the market'.

Cuddon has pegged back his price target to 126p a share from 200p. The stock has fallen 37p, since hitting its peak on November 18 and, as I said, could drift even lower. However if it were to get down to 70p then I it would be tempted to buy it back.

Elsewhere, another of our speculative stocks, the miner Kiwara, received a cash and shares bid from First Quantum Minerals that values the copper miner at £158m or 75p a share. This is a tidy profit based on an entry price of 36p. It was mooted that others were running the slide rule over Zambian-focused Kiwara. My information is that FQ is now the only game in town.

So the only decision now is whether to sell in the market (current price 70p) or accept the mix of cash and FQ shares.

Finally, our drug stocks - Glaxo, AstraZeneca and Shire - have enjoyed an incredible run since we made a decisive play on the sector back in the summer.

Shire in particular has been a stunning success, having advanced 34% in that time.

However since the third quarter results, the performance of our big three pharma firms has been lacklustre to say the least. So I'm going to close off our position and bank a decent profit after a very lucrative foray into drugs.

So far this year the Daily Mail portfolio has registered a 32% gain, almost double the advance of the FTSE 100. Here's hoping we get to the end of December with our winnings intact.

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