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“The FTSE 100 index trades slightly lower despite a strong close overnight on Wall Street. The blue chip index has been held back by a stronger pound,” says AJ Bell investment director Russ Mould.
Majestic Wine
“Shares in wine retailer Majestic Wine are lower as the company signals plans to invest an additional £9m to £13m in its business in its next financial year.
“Some adjustment in the share price is to be expected given the increased spending, targeted at customer acquisition, will reduce earnings in the same financial year by up to £3m. However, willingness to invest for future growth is typically a positive sign.
“Management now need to demonstrate they can execute on the opportunity they have identified, and the market is likely to put to the test its pledge that it can ‘measure success in months while delivering returns over years’.”
Immupharma
“An 85% plunge in the share price of small cap biotechnology business ImmuPharma to a little over 20p reflects the high risks associated with investing in this space.
“The massive sell-off follows the results of a Phase III trial of its treatment for Lupus, an autoimmune disease that affects millions of people including pop star and actress Selena Gomez.
“Immupharma’s Lupuzor compound failed to show a statistically significant benefit for patients using the drug against those receiving a placebo treatment.
“Early stage drug companies, like oil explorers chasing a big discovery, often face this type of binary outcome.
“A familiar pattern is typically followed with the shares rising in anticipation of the result. Today’s news will be painful for investors who participated in a £10m fundraise in January at 144p per share.”
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