Speculating on success

Angle PLC is one of the more speculative holdings in my portfolio, and I bought shares in the company at the back end of 2012 at around 27p.

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At the time I mentioned that the share price would be volatile, and this has certainly proved to be the case as the story has developed. In general, the progress has been encouraging and I have maintained my position and holding in the company.

This morning they released details of a discounted placing, subscription and offer of 65p per share to the prevailing share price of 85p on Friday . This should see the company through to delivering its first clinical application to address the ovarian cancer market which they estimate to be worth in the region of £300m per annum. Since the placing is substantially above my purchase price, and will raise a net amount of £8.2m for the company, I am more than happy to continue to hold my shares in Angle and await developments.

Whilst I continue to emphasise that Angle PLC is a highly speculative investment, and the share price movements will continue to be volatile in the short term, there is also the potential for substantial rewards. The key to unlocking the multi-million pound market for their Parsortix device is essentially in the hands of Key Opinion Leaders who are currently evaluating it's clinical potential. Whilst research sales may appear later this year, it is the clinical utility of the Parsortix device that will realise Angle's and investor's future return.

Alongside, the placing announcement today, Angle also detailed a collaboration with MD Anderson to "investigate the clinical use of ANGLE's Parsortix system as a companion diagnostic in colorectal cancer." An encouraging collaboration since, "United States News & World Report's "Best Hospitals" survey has ranked MD Anderson as one of the nation's top two cancer centres every year since the survey began in 1990. MD Anderson's Clinical Center for Targeted Therapy is the largest programme in the world expediting the development of new cancer drugs.". This increases the number of highly respected KOLs to nine.

If all goes well then I would expect a raft of good news stories emanating over the next two years with the key drivers being positive patient data from the KOLs and sales of the Parsortix device for research purposes. The company also awaits FDA approval which is critical for US sales, although effectively meaningless without validation of Parsortix's clinical utility.

For me, the single biggest indicator that my speculation in this stock could prove to be hugely lucrative in the long term was the news release on 27 January that The Medical University of Vienna will lead, in collaboration with ANGLE, a clinical study of the use of the Parsortix system as a clinical application in the routine detection and treatment of ovarian cancer patients after patient data showed "unprecedented sensitivity and specificity" for Parsortix ovarian cancer clinical application. In my experience, medical staff are not renowned for hyperbole, and hence the most striking quote was from Dr Eva Obermayr, Principal Investigator at the Medical University of Vienna, who described the results with ANGLE's Parsortix system as "sensational".

In conclusion, whilst accepting that an investment in Angle PLC is still speculative, with funding now in place and KOL data highly positive so far, I am hopeful that this could turn out to be an exceedingly rewarding long term hold.