Aptamer Group reports 27% revenue growth on pharma contracts By Investing.com

Revenue rose 27% YoY in H1, with gross profit of £460,000 and adjusted EBITDA loss narrowed to £1.0m; first-half EBIT was -£1.24m and basic EPS was 0.04 pence. Aptamer received initial licensing payments from Twist Bioscience and Alphazyme and launched an Accelerated Book Build to raise at least £3.75m, which it expects will extend its cash runway through 2028. Management aims to convert assets into recurring royalty/licensing revenue, target in vivo data for its radiopharmaceutical pipeline by end-2026, and expand manufacturing capacity to support licensed assets and improve margins.

Analysis

The strategic pivot from one-off fee-for-service to licensed/royalty-bearing assets is the key value inflection here: if management can convert even a few partnerships into mid-single-digit royalty streams, the company’s revenue multiple should re-rate from a services multiple to a higher-growth IP multiple. That re-rating is conditional on predictable supply and quality — the decision to expand manufacturing and run quality audits is less about capacity today and more about derisking the ‘fulfilment cliff’ that kills royalty credibility for pharma partners.

Twist and other oligo-platform partners being early licensees is a form of third-party validation that shortens pharma diligence cycles for future deals, so expect deal flow to be front-loaded from firms that already use those platforms. Conversely, this creates concentration risk: a small set of licensees and a small number of programs (radiopharma) mean binary clinical readouts will dominate near-term share moves, amplifying volatility.

Operationally, the margin path is a function of scale and batch-cost leverage; successful quality audits can compress COGS by 200–400bps over 12–24 months if capacity is well-utilized. The largest tail risk is execution—failed in-vivo data or a licensing counterparty pulling back would not just hit revenue but also reset the multiple to services, causing a >50% downside in a small-cap valuation scenario.

Key Decisions for Investors

• Buy TWST (Twist Bioscience) 9–12 month call spread (buy ATM, sell 20–30% OTM) sized 1–2% NAV: asymmetric upside if oligo demand for radiopharma/aptamer assets accelerates; max loss = premium paid, target 50–100% return if licensing cadence continues.
• Pair trade: go long TWST vs short IBB (iShares Nasdaq Biotechnology ETF) equal notional for 6–12 months to express tools/platforms outperforming drug developers as biotech funding remains volatile; expected relative upside 30–60%, tail risk is broad biotech risk-on where both leg prices rise.
• Opportunistic buy of Aptamer equity on any >10% post-placement weakness (allocate <0.5% NAV): high-risk/high-reward swing trade targeting re-rating on first recurring royalty; set strict stop at 45% drawdown and size for milestone-driven upside rather than core holding.