The Starpharma Holdings Limited (ASX: SPL) share price fell 1% to $1.12 after the company published its annual results to the market this morning. Revenue rose 34% to $4.8 million and the net loss after tax decreased to $10.3 million.
Starpharma did not declare a dividend and reported a net loss after tax of 3 cents per share. The company ended the year with $51 million in cash and no debt.
During the year, Starpharma made progress on several of its clinical trials, completing a Phase 1 trial for its treatment DEP docetaxel, and commencing a Phase 2 trial in the UK.
The company also demonstrated the efficacy of its VivaGel BV in phase 3 trials, progressed towards regulatory approval in the USA, and achieved marketing approval for VivaGel in Australia. There are several other treatments in varying stages of research and development.
In 2019, Starpharma expects to begin commercialising its VivaGel product and delivering its first revenues. This will likely require heavy investment in sales staff and support infrastructure, however Starpharma is well funded and likely able to continue operating for up to 3 years or more before requiring any additional cash. With its losses in prior years, Starpharma may also be able to call on a substantial tax benefit (from unused tax losses) if it becomes profitable in time, although no deferred tax asset appears to be recognised currently.
While Starpharma is well funded, it is still a highly risky and unprofitable company and suitable only for risk-tolerant investors who are cautious in their position sizing.
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