Circassia Pharmaceuticals (CIRCI) shot to the top of the UK stock market today as the Neil Woodford-backed biotech jumped 15% at one point after announcing a tie-up with drugs giant AstraZeneca (AZN).
Shares in Circassia leaped 15p to 112p before settling back at 94p, up nearly 8%, after chief executive Steve Harris hailed the deal as a ‘transformational opportunity’ that could turn it into a world-class respiratory business.
Circassia, which suffered a big setback last summer when it halted trials of a cat-allergy treatment, has bought the US commercial rights of two Astra products, Tudorza and Duaklir, used to treat chronic obstructive pulmonary disease, a lung condition affecting millions of people.
It will split the royalties 50-50 with AstraZeneca, up a penny to £48.67, which will take a $50 million stake in new shares issued by Circassia.
Star fund manager Woodford holds a 21% stake in Circassia, some of it held by Woodford Patient Capital (WPCT) investment trust, where Harris serves as a non-executive director. Its shares dipped 0.7% to 93.3p. Invesco, Woodford's former employer, is the biggest shareholder with a 35% position.
Last June Circassia shares lost two thirds of their value after the flop of the cat allergy trials. At the time, Woodford came out in support of the company and said that investors had over-reacted to the disappointment. At the end of January Circassia was Patient Capital's 23rd biggest holding, accounting for 1.42% of its assets.
Elsewhere markets were flat, with gains in energy, technology and telecoms stocks neutralised by falls in financials, utilities and industrial stocks. Having hit al-time highs yesterday the FTSE 100 was broadly unchanged at 7,415, while the FTSE 250 shed three points to 19,023 and the FTSE Small Cap index added nine points to 5,401.
Tullow (TLW) was the other big mover, shares in the oil explorer dropping 14% to 202.5p after announcing a £607 million rights issue to cut its $4.8 billion (£3.9 billion) debt pile.
Berkeley Group (BKGH) advanced 5.7% to £31.31 after the house builder said full-year profits would be at the top end of analyst forecasts despite falling demand in the capital.