Synairgen shares: here’s why I think the stock could DOUBLE in 2021

Synairgen shares have had a phenomenal run in 2020. Nadia Yaqub looks at the latest news and gives her opinion on the stock.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young woman with face mask using mobile phone and buying groceries in the supermarket during virus pandemic.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

It seems the beast that is the coronavirus will not go away. In the UK, there is a new Covid-19 strain that has led to the government placing London and the South-East into a Tier 4 lockdown. Although Pfizer has released its vaccine for distribution, it is clear is that other drug firms need to follow.

Synairgen (LSE: SNG) shares have recently come onto my radar. The stock started 2020 at 6p and, as I write, is trading at 148p. That is a return of 2360%.

With these stellar gains, I think Synairgen shares could double from current levels in 2021. Let’s consider the investment case.

What does Synairgen do?

Synairgen is an AIM-listed drug discovery and development company. It is a university spin-off firm that was founded in 2003 by three University of Southampton professors.

Synairgen develops drugs for respiratory diseases including asthma and more recently, Covid-19. While the company is much smaller that the likes of GlaxoSmithKline, its treatment for the coronavirus, I believe, is likely to be game changing.

SNG001 – Covid-19 treatment

The reason why Synairgen shares are now on the radar for many investors is due to its SNG001 drug, which has been proven effective in treating Covid-19.

It is still early days for SNG001 to be rolled out to the masses. The treatment is undergoing Phase II trails, which involves using the drug on a sample of patients and assessing the results. While there is no guarantee of SNG001 being successful in the subsequent phases, I am optimistic of the results generated by Synairgen so far.

Synairgen shares have potential

In July 2020, Synairgen shares shot up by 420% in one day. This was after it released positive results from a trial of SNG001 in hospitalised Covid-19 patients.

This study involved 101 patients from nine specialist hospital sites in the UK. It showed that those who received SNG001 were twice as likely to recover to the point where their daily activities were not compromised through having been infected by Covid-19. In addition, the treatment significantly reduced breathlessness, one of the main symptoms of the disease.

Latest developments

In December, Synairgen announced that its application to the US regulator, FDA, to evaluate SNG001 as a treatment for Covid-19 had been approved. This means that the company can conduct further trials in the US.

The breaking news from the statement was that the FDA had also awarded SNG001 a fast track status, which means that the review timelines with the regulator will be shortened. Synairgen shares rallied on the back of this and I believe this is a milestone for the firm.  

Acquisition target

In recent months, Synairgen has successfully raised money to develop its SNG001 drug. Despite the capital boosts, it is still a small, loss-making company. I think Synairgen could get snapped up by a large pharmaceutical competitor.

While the focus is currently on Covid-19, Synairgen’s research could also lead to developing drugs for other respiratory diseases.

My view

So would I buy Synairgen shares? Yes. I think the company has bags of potential and the fact that the FDA has fast tracked SNG001 speaks volumes. While Synairgen is still a risky prospect, I think the shares could double if its Covid-19 treatment continues to deliver positive results.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

After it crashed 25%, should I buy this former stock market darling in my Stocks and Shares ISA?

Harvey Jones has a big hole in his Stocks and Shares ISA that he is keen to fill. Should he…

Read more »

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

How’s the dividend forecast looking for Legal & General shares in 2025 and beyond?

As a shareholder, I like to keep track of the potential dividend returns I could make from my Legal &…

Read more »

artificial intelligence investing algorithms
Investing Articles

Could buying this stock with a $7bn market cap be like investing in Nvidia in 2010?

Where might the next Nvidia-type stock be lurking in today's market? Our writer takes a look at one candidate with…

Read more »

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »