Here’s why UK shares Sareum and Biome Technologies are soaring and sinking today! – The Motley Fool UK

UK share prices have got Thursday off to a confident start. And the Sareum Holdings (LSE: SAR) share price is performing particularly strongly as it announced strong testing results from its Covid-19 research programme.

Sareum develops specialist drugs which are used to treat cancer and autoimmune diseases. And it said today it had recorded “encouraging results” from the testing of SDC-1801 on coronavirus-related inflammation. Shares of the company have subsequently leapt 9% today to 6.3p per share.

SDC-1801 “reduced the levels of cytokines associated with Acute Respiratory Distress Syndrome (ARDS) in human lung cells” following infection with Covid-19, results showed. The inhibitor “[also] demonstrated a profile that was superior to the anti-inflammatory steroid dexamethasone and similar to baricitinib, a JAK1/JAK2 inhibitor,” Sareum said.

Subsequent in-vivo studies supported these results and showed that SDC-1801 cut the number of Type 1 interferons that can cause an over-active inflammatory response. The UK healthcare share added that viral loads didn’t increase following the inhibitor’s use. This can be a concern when anti-inflammatory agents are used to reduce an over-active immune response.

Next steps

Sareum’s chief strategy officer John Reader commented that “we are keen to progress this project to the next stage and will now explore our options to find the best way to fund these next steps.”

This could include taking part in the UK government’s AGILE clinical development platform, Reader said. The programme is designed to fund Phase 1 trials and fast-track the production of Covid-19 treatments. The AIM-quoted company is looking to kick off Phase 1 testing in early 2022.

A falling UK share

The Biome Technologies (LSE: BIO) share price hasn’t fared nearly as well as Sareum’s. The UK engineering share has, in fact, plummeted 23% on Thursday to 370p, following a profit warning.

Biome manufactures naturally-produced plastics that are biodegradable and compostable. And it’s slumped today after announcing that factory problems at a key customer would have a “significant impact” on profits growth in the near term.

The AIM business inked a contract with a US customer to accelerate the commercialisation of its proprietary compostable coffee-pod filtration material back in March. Biome said it expected the deal “would support a significant portion of the group’s expected revenue growth in 2021 and beyond.”

However, the client has experienced problems in deploying equipment Biome supplied on a significant portion of its production capacity. And while an engineering solution has been discovered, “it will now take some months for the customer to design and install the necessary modifications.”

In other news, Biome said it has also been affected by delays and cancellations caused by the impact of Covid-19 on the global shipping industry. It said “there is no sign that the current severe level of disruption with shipping and ports will be resolved soon.

These problems, along with the adverse effect of exchange rate movements, mean Biome is now predicting that revenues “will be materially below current market expectations.”

It also reckons that losses before interest, tax, depreciation, amortisation and share option charges will exceed market predictions in 2021, and that the business will record losses next year too.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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