A quarter of its share price has been swiped with the news margins are under pressure.
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Not good news for Midatech Pharma (LON: MTPH) shareholders this morning, with shares down 25% in early trading as a result of bad news in the Group's interims out today.
The pharmaceutical group announced today that:
"Recent challenges have temporarily slowed the Company's development programme progression, including commercial organisation costs and margins being under pressure, clinical study designing taking longer than expected, and reduced its ability to invest in key programmes."
Management now plans to raise funds up to £6m via a proposed Placing with up to a further £2m by way of an Open Offer to shareholders.
The pricing of the placing and the total number of shareholders to be placed will be announced following the close of the bookbuild, Management said.
Shares were trading at 54p this morning compared to yesterday's closing price of 72p.
Total Net Revenue for H1 17 was £3.45m, an increase of 17% from H1 16, whilst a loss before tax of £9.7m was also reported.
N+1 Singer released a note as a result of the Interims, reiterating their Buy stance on the stock despite the situation, and a 12-month target price of 140p.
Midatech currently has a market cap of £35m, and while Revenues for the five years to 2016 grew nicely, net losses ballooned from £5m in 2011 to £20m in 2016.