I agree that 8c in the short term is a reasonable...

I agree that 8c in the short term is a reasonable target.

Ed

Metabolic suffers withdrawal
Anthony Hughes

Metabolic Pharmaceutical's implosion yesterday is not a good sign for the biotech sector, which has been slowly returning to market favour given recent progress by companies such as Avexa, Progen Industries and Pharmaxis.

The worst part about Metabolic's 70 per cent share price collapse is that investors, led by Acorn Capital, subscribed for $10.5 million of capital at 72c a share in December, versus yesterday's humble close of 22.5c.

In hindsight it is probably not a good sign if a biotech is raising money ahead of critical trial results, because it tends to suggest confidence in the outcome of those results is not high.

Suffice to say, there is already talk of legal action from angry shareholders, who must have been horrified to read the announcement yesterday that phase 2B trials for its anti-obesity drug, AOD9604, do not support its commercial viability.

Perhaps it is early days for that, but the immediate future doesn't look bright given Metabolic is now sitting on around $24 million in cash or 8c a share and arguably it should be now trading closer to cash backing.