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On Tuesday morning, the Telstra Corporation Ltd (ASX: TLS) share price hasn’t been able to build on yesterday’s solid gain.

At the time of writing, the telco giant’s shares are down slightly to $3.48.

Why did the Telstra share price rise on Monday?

Investors were buying Telstra’s shares on Monday in response to some positive industry news.

That news was that arch-rival Optus has raised the pricing on all its mobile plans by $6 per month. This represents an 8% to 15% increase and is meaningfully larger and earlier than experts were expecting.

According to a note out of Goldman Sachs, its analysts note that this means its entry level price point has lifted to $45 per month, which will be accretive to Optus’ reported average revenue per user (ARPU).

What does this mean for Telstra?

While Goldman doesn’t expect the changes to impact Telstra’s pricing, it believes the overall impact to the Australian mobile market will be positive and support industry ARPU growth.

The broker does, however, see this as an opportunity for TPG Telecom Ltd (ASX: TPG) to lift prices.

Goldman said: “We believe these changes provide a clear opportunity for Vodafone (TPG) to follow, and remove the $5/m discounts it currently has across its plans. However we do not expect Telstra to change its pricing, as Optus’ increase follows the 5G price increases implemented by Telstra in July-20. Instead, we believe Telstra will continue to focus on up-selling customers to higher tiers.”

“Overall these changes support our positive view on the Australian Mobile market, which we believe is set for an extended period of ARPU growth as the industry looks to generate adequate returns on 5G investment and recovers from intense competition/lost mobile roaming revenue.”

Is the Telstra share price in the buy zone?

Goldman remains very bullish on Telstra and has retained its buy rating and $4.00 price target.

It said: “We stay Buy on Telstra ahead of the earnings’ inflection, believing that it will re-rate as it becomes a ‘simpler’ telco post NBN completion, along with further upside from possible asset monetisations.”

And although its sees positives from Optus’ price increases for TPG Telecom, it isn’t enough for a buy recommendation. It has held firm with its neutral rating and $7.10 price target.

It explained: “We stay Neutral on TPG as despite favorable mobile market trends and valuation support emerging, we remain cautious given: (1) Vodafone’s 5G network meaningfully lags TLS/Optus, while in-market mobile pricing is lower yoy; (2) TPG trading multiples are still in-line with TLS; and (3) The unexpected departure of the Chair and upcoming escrow completions (i.e., escrows on over 64% of TPG equity finish Jul-22) are likely to remain an overhang on the share price.”

More reading

• 2 quality ASX dividend shares that will help you beat low interest rates
• Why is the Telstra (ASX:TLS) share price rising today?
• ASX 200 Weekly Wrap: Shares have average week but a great month
• Should you always reinvest your ASX dividends with a DRIP?
• What happened to the Telstra (ASX:TLS) share price in April?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Telstra (ASX:TLS) share price could be heading higher from here appeared first on The Motley Fool Australia.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) were climbing higher last month after the Google parent gained early in the month amid bullishness over the economic reopening and a rise in the broad market. The stock jumped again at the end of April after it delivered a better-than-expected first-quarter earnings report, and it got a number of bullish analyst notes and upgrades along the way.

According to data from S&P Global Market Intelligence, the stock finished the month up 14%. The chart below shows its gains.

GOOGL data by YCharts.

So what

Alphabet shares jumped out to a strong start in April amid a broader bullishness in the market as President Joe Biden unveiled a $2.3 trillion infrastructure bill, and the March jobs report was better than expected, showing the economy added nearly 1 million jobs. Both items, along with an accelerating vaccine rollout, helped drive Alphabet shares higher since the company’s performance, as an advertising business, is highly correlated with the overall health of the economy. 

Several analysts raised their price targets on the stock over the course of the month, including Wedbush, which added the stock to its best ideas list, seeing its opportunity being accelerated in the reopening.

And the stock rose 3% on April 28 after the company beat estimates by a wide margin in its first-quarter earnings report. Revenue jumped 34% to $55.3 billion, lapping the beginning of the lockdowns a year ago and beating estimates at $51.7 billion. On the bottom line, operating income doubled, and the company finished with earnings per share of $26.29, which was well ahead of estimates at $15.82. Growth in its advertising business, especially YouTube, was strong, and cloud revenue jumped 46% to $4 billion.

Now what

Alphabet shares are now up 33% as the tech giant is well positioned to benefit from the economic reopening, which is already driving a surge in advertising demand. Additionally, shares of the Google parent offer great value, trading at a price-to-earnings ratio of just 27. Don’t be surprised to see the tech stock continue to march higher this year.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

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• Retail just changed. Forever…
• ACCC sends a warning shot at Apple and Google app stores
• Alphabet topped Wall Street’s earnings targets by 66%

Jeremy Bowman has no position in any of the stocks mentioned. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The De Grey Mining Limited (ASX: DEG) share price is surging today. At the time of writing, shares in the gold miner are trading for $1.55 – up 11.5%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.31% higher.

The company comes into focus this morning as it announces “significant” drilling results at one of its sites in the Pilbara region of Western Australia.

Let’s take a closer look at today’s news and what it means for the De Grey share price.

What’s affecting the De Grey share price?

In a statement to the ASX, De Grey Mining says initial drill results at the Diucon-Eagle mining sites in the Hemi prospect have confirmed a large mineralised system.

The company highlighted the following results:

• a 14m wide ore with 21.2g of gold per tonne.
• a 19m wide ore with 4.4g of gold per tonne.
• a 17m wide ore with 5.7g of gold per tonne, and
• a 61m wide ore with 2.g of gold per tonne.

De Grey says the results “demonstrate the potential to rapidly and cost-effectively” add to its site gold endowment.

Investors are reacting well to today’s news, judging by the De Grey share price climb.

Management commentary

De Grey managing director Glenn Jardine said:

These recent results at Diucon and Eagle confirm the presence of a large mineralised system in the west of Hemi. Both zones remain open to the west toward Antwerp. Diucon and Eagle represent another step change to the gold endowment at Hemi.

RC drilling to determine the overall scale along strike continues and diamond drilling of potential down dip extensions is expected to commence during the quarter.

Gold commodity price

Gold is currently trading on the commodity market for around US $1,790 per troy ounce. It’s down 5.54% since the beginning of the year and 13.4% lower compared to its record of US $2,069 per troy ounce. Gold hit that record in August last year. However, it is 3.6% higher over the last month.

The website Trading Economics attributes the precious metals recent rise to “a weaker dollar and lower treasury yields” as well as fears over rising COVID cases in parts of the world. Gold is seen as a safe investment by some investors, according to the website.

De Grey share price snapshot

Over the past 12 months, the De Grey share price has increased 308.2%. Its share price shot up 16% on 23 April, as the miner announced preliminary results at other sites in the Hemi prospect.

De Grey has a market capitalisation of $1.9 billion.

More reading

• ASX 200 up 0.5%: Coles Q3 update, Westpac settles class action, JB Hi-Fi loses its CEO
• Why the De Grey Mining (ASX:DEG) share price is surging 16% higher
• Why Accent, AMP, De Grey, & Nuix shares are charging higher
• Why the De Grey Mining (ASX:DEG) share price is dropping today
• Why the De Grey Mining (ASX:DEG) share price is on watch today

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Infomedia Limited (ASX: IFM) shares are heading higher today after the company provided an acquisition update. At the time of writing, the Infomedia share price is trading at $1.64, up by 4.13% for the day so far.   

Infomedia provides software and data insights solutions to the global automotive industry. Below we take a look at the company’s acquisition announcement.

What acquisition did Infomedia announce?

The Infomedia share price is in the green today after the company reported its wholly owned subsidiary, IFM Americas Inc, has entered into an agreement to acquire SimplePart.

SimplePart is an e-commerce platform based in the United States. It designs and manages e-commerce programs for some of the world’s leading car manufacturers, enabling them to sell directly to consumers.

Infomedia has agreed to pay an upfront consideration of US$24.5 million (AU$31.4 million), plus an earn-out of up to US$20.5 million over 3 years.

Infomedia will pay the US$24.5 million upfront consideration from its existing cash reserves. It said it will pay the earn-out in cash while maintaining the right to pay up to 20% of earn-out payments in its shares.

SimplePart revenue came in at approximately US$10 million over the 12 months to 31 March. According to the release, SimplePart is forecast to achieve low double-digit growth rates in 2021 and 2022 “before synergies”.

The Infomedia share price opened almost 5% higher following the company’s update but has since partially retreated to its current level.

Commenting on the acquisition, Infomedia CEO Jonathan Rubinsztein said:

This is a very exciting acquisition as auto e-commerce is a strategic extension of our core global offering. SimplePart enables Infomedia to further penetrate the automaker parts ecosystem and transforms our presence in the Americas.

SimplePart founder Cole Getzler added:

This transaction is a unique opportunity for SimplePart to partner with a global leader in parts and service software that shares our philosophy of developing and delivering innovative, industry-leading fixed operation solutions. We are looking forward to sharing our solutions globally.

The transaction is expected to be completed by 30 June, subject to the customary conditions being met. 

Infomedia share price snapshot

It’s been a bit of a rollercoaster for shareholders this year, with the Infomedia share price now up 4.5% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is up 35% over that same time.

Year to date, Infomedia shares are down by around 14%.

More reading

• These oversold ASX tech shares are ripe for the picking

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Infomedia. The Motley Fool Australia has recommended Infomedia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Ramsay Health Care Ltd (ASX: RHC) share price is falling this morning. This comes after the company announced key new information and updates within its presentation at the Macquarie Australia Investment Conference. 

At the time of writing, the Ramsay Health Care share price is trading for $66.62. down 0.7%.

What might drive the Ramsay share price 

Credit rating update

Credit rating agency Fitch has accredited Ramsay with an investment-grade credit rating of BBB (stable). 

Ramsay CFO Martyn Roberts said in response to the company’s first international credit rating: 

Achieving this credit rating is a positive first step in our program to diversify Ramsay’s sources of debt and extend and stagger the tenure.

Ramsay Australia update 

Ramsay Australia is the largest private hospital operator in Australia with 72 hospitals and an estimated market share of 27%. Additionally, Ramsay Australia contributed approximately 46% of the Group’s revenue in 1H21. 

Ramsay’s Australia division reported a 4.6% increase in total patient revenue for 3Q21. This was driven by a broad increase in services. In particular, this growth included surgical and non-surgical admissions, psych and rehab admissions, maternity volumes, and activity levels.

The update also noted that average costs per month associated with operating in a COVID environment are gradually reducing. However, the company is working through the higher cost of inventory acquired at the height of COVID. Furthermore, it will continue to be impacted by inflated costs for some items in the current environment. 

Ramsay UK update 

Ramsay UK experienced an 82% decline in revenues in 1H21 to $86 million from $493 million in 1H20. This decrease was due to capacity restrictions. From 1 January 2021 to 31 March, Ramsay has operated under a new volume-based agreement with the National Health Service England (NHS). This agreement utilised the capacity of 14 Ramsay hospitals during 3Q21. 

Ramsay continued to treat non-COVID NHS priority cases. However, continued strict lockdown conditions resulted in a 6.2% decline in admissions on the prior corresponding period. 

From a year-to-date perspective to 31 March 2021, admissions are tracking at approximately 83% of the prior corresponding period (pcp). The relaxation of lockdown restrictions in recent weeks has seen a recovery in the pipeline of private and self-funded patients. 

Ramsay Europe update 

Ramsay Europe is the second-largest private care provider in Europe. The company operates specialist clinics and primary care units in approximately 350 locations across five countries. Ramsay Europe contributed approximately 52.5% of the Group’s revenue in 1H21. 

In mid-March, the French Government started to restrict elective surgery capacity. The company reveals that the average capacity across all French facilities during March/April was 40%. As a result of elective surgery restrictions and COVID lockdowns, admissions for 3Q21 was announced to be “materially below” the pcp. 

More reading

• 2 high quality ASX 50 shares for your retirement portfolio
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• Ramsay (ASX:RHC) share price rises on acquisition speculation
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The SEEK Limited (ASX: SEK) share price has been on form on Tuesday.

In morning trade, the job listings giant’s shares jumped 7% to a record high of $32.91.

At the time of writing, the SEEK share price has eased back, but remains 3% higher at $31.62.

Why is the SEEK share price charging higher?

The catalyst for the strong rise by the SEEK share price today was the release of a market update this morning.

That update provided investors with details relating to its Zhaopin divestment, its dividend, and its guidance for FY 2021.

In respect to the former, SEEK announced that all conditions precedent to completion of the Zhaopin transaction have been satisfied. As a result, it will now reduce its holding in Zhaopin from 61.1% to 23.5%.

Approximately A$500 million of the total anticipated gross proceeds of A$697 million were received in April.

Dividend update

The SEEK board has decided to return some of the funds raised from the Zhaopin transaction to shareholders.

According to the release, it has determined to pay a dividend of 20 cents per share with a record date of 11 May and a payment date of 24 May.

Post receipt of funds from the transaction and including payment of the dividend, SEEK notes that it is operating well within its original pre-existing borrower group covenant limits. This has enabled it to end its temporary arrangement which allowed an increase in key covenant limits through to 30 June 2021.

FY 2021 guidance

Management notes that its results for the nine months ended 31 March and its outlook for the remainder of the year are ahead of previous expectations.

This has been driven by the outperformance of its SEEK ANZ (primarily SMEs) and SEEK Asia businesses.

As a result, it now expects FY 2021 revenue to be in the order of $1,740 million and EBITDA to be ~$510 million. This compares to previous guidance of $1,700 million and $510 million, respectively.

On the bottom line, reported net profit after tax is expected to be in the order of $150 million, up from $100 million previously.

SEEK’s Founder and CEO, Andrew Bassat, said: “Completion of the Zhaopin transaction and receipt of funds is an important milestone. A portion of the Zhaopin proceeds will be returned to shareholders as a dividend, which reflects our confidence in SEEK’s outlook and ongoing cash generation. Post the dividend, SEEK will still have significant balance sheet flexibility for ongoing re-investment and future dividends.”

“We are pleased to upgrade our FY21 guidance. Our willingness to invest through the cycle has meant our key businesses, in particular SEEK ANZ and SEEK Asia are now capitalising on improving macro conditions. Of note, SEEK ANZ continues to benefit from record high levels of SME hiring activity and increasing usage of our depth products. We look forward to providing another update at SEEK’s full year results in August,” he concluded.

More reading

• These ASX 200 shares are tracking the Aussie economy higher in 2021
• Why Zip (ASX:Z1P) and these ASX shares are rated as buys
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• Is the SEEK (ASX:SEK) share price in the buy zone?
• Where to invest your Rio Tinto (ASX:RIO) dividends

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Andromeda Metals Ltd (ASX: ADN) shares are edging higher in early trade after the company heralded news regarding its crown jewel – the Great White deposit. At the time of writing, the Andromeda share price is trading 2.38% higher at 21.5 cents.

Shareholders will be grateful for the positive update, with Andromeda shares down by around 26% over the last month. For comparison, the All Ordinaries Index (ASX: XAO) is up by around 2.6% over the same period.

Let’s take a closer look at today’s news from the mineral exploration company.

Halloysite-kaolin

Andromeda shares are in the green following news that the company’s aircore drilling program has begun at its Great White deposit.

The drilling program will allow Andromeda to continue testing and defining the product of its ultra-bright halloysite-kaolin resource. It will also potentially help to extend the zone of mineralisation at the project.

The Great White Deposit is a high-quality, halloysite-kaolin resource located in South Australia. Andromeda has a 75% stake in the project, with its joint venture partner Minotaur Exploration Ltd (ASX: MEP) holding the other 25%.

Halloysite is a rare derivative of kaolin. According to Andromeda, the high purity of halloysite-kaolin from Great White makes it a premium feedstock for the production of high purity alumina (HPA). HPA is used to make electronics, watch faces, smartphone components, and it’s a key ingredient for lithium batteries.

Andromeda has also advised the ultra-bright kaolinite at its Great White deposit works well to create coatings and polymers.

The company reported that testing of ultra-bright kaolinite from Great White found, after processing, its brightness was beyond the scale used to measure kaolinite’s purity.

The aircore drilling program will be targeting areas to the north of the known deposit and to the south of a proposed mining pit.

Andromeda Metals share price snapshot

Today’s news comes at a good time for the Andromeda share price, which has had a challenging year so far on the ASX.

Currently, the Andromeda share price is down 31% year to date. Though, it’s still around 330% higher than it was this time last year.

The mineral explorer has a market capitalisation of around $453 million, with approximately 2 billion shares outstanding.

More reading

• Andromeda Metals (ASX:ADN) share price falls despite project update
• Why is the Andromeda (ASX:ADN) share price on a rollercoaster today?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Amazon (NASDAQ: AMZN) were climbing last month after the tech giant posted strong first-quarter earnings at the end of the month and benefited from a broader rally in early April.

According to data from S&P Global Market Intelligence, Amazon shares finished the month up 12%. As you can see from the chart below, the stock gained steadily over much of April.

AMZN data by YCharts

So what

Amazon shares surged early in the month, riding higher on news about Biden’s $2.3 trillion infrastructure plan, a strong March jobs report, and the defeat of a unionization drive at an Alabama warehouse. (Votes against unionizing outnumbered votes for by more than 2-for-1.)

As the leader in e-commerce and cloud infrastructure, Amazon is in a great position to benefit from the passage of an infrastructure bill that would improve roads, helping make deliveries faster, and expand internet access. As a retailer, the company should also benefit from the economic reopening, which is already driving consumer spending higher.

Towards the end of the month, the stock gained in tandem with blowout results from other tech stocks, pointing to strong growth at the company in digital advertising and cloud computing.

Amazon itself posted smashing results in its Q1 report with revenue up 44% to $108.5 billion, outpacing expectations at $104.6 billion, and saw earnings per share more than triple to $15.79, easily beating estimates at $9.54. The company’s profit margins continue to expand rapidly due to growth in businesses like advertising, third-party seller services, and cloud computing.

Now what

Looking ahead, the company expects another round of strong growth in the second quarter, calling for $110 billion to $116 billion, or 27% revenue growth at the midpoint. Though Amazon may face some headwinds from the reopening as shopping habits trend away from e-commerce, the company now has more than 200 million Prime members. Over the last year, it has invested more than $45 billion back into its business in areas like logistics, which will only reinforce its competitive advantage. 

Expect its profit margins to continue to expand as its high-margin businesses keep growing.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Amazon just posted a record profit margin: 3 reasons it will get even better
• ASX 200 Weekly Wrap: Shares have average week but a great month
• Retail just changed. Forever…
• Disney says it’s using Amazon’s infrastructure for its worldwide Disney+ expansion
• Amazon on track to beat Walmart as biggest U.S. retailer by 2025

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The NIB Holdings Limited (ASX: NHF) share price is continuing to ascend on the back of another positive update.

At the time of writing, the private health insurer’s shares are swapping hands for $6.31, up 1%.

What did NIB announce?

Investors appear pleased with the company’s strategic direction, pushing NIB shares higher in early morning trade.

In a statement to the ASX, NIB advised it has sold its digital healthcare directory platform, Whitecoat to Commonwealth Bank of Australia (ASX: CBA).

Along with other shareholders, NIB approved the terms of the sale yesterday.

As a result, the company expects to receive roughly $9 million in profit before tax on the sale of its shareholding in Whitecoat.

In the 8 years of operation, Whitecoat has grown to become Australia’s largest digital healthcare services directory. Currently, the online platform features more than 300,000 healthcare providers for consumers to find, book, and pay for treatment. In 2018, Whitecoat expanded its market presence by offering its services to New Zealand.

NIB managing director, Mark Fitzgibbon commented on the sale:

The sale to CBA will lift critical mass and the “network effect” these kinds of platforms rely upon. It will also bring the level of investment required to further develop Whitecoat’s technology.

Just as Elon Musk doesn’t manufacture every component of a Tesla nor will we see single companies build monolithic end to end solutions in the world of digital healthcare. Like for Tesla, our job at nib is to assemble the best tech functionality into a seamless and integrated experience for our members and providers. There remains so much more to do.

Mr Fitzgibbon highlighted that NIB never considered Whitecoat as part of its core strategy. This is because the online platform leans towards healthcare provider payments as opposed to health insurance plans. Furthermore, he assured that the sold-off business represents just one of many components of its total digital ecosystem for consumers and healthcare providers.

About the NIB share price

NIB shares have been on fire lately, storming close to 20% since releasing its trading update and outlook for FY21. It’s worth noting, the company’s shares reached a fresh 52-week high of $6.28 yesterday, before some slight profit-taking occurred.

NIB has a market capitalisation of roughly $2.8 billion, with approximately 457.7 million shares on issue.

More reading

• ASX 200 Weekly Wrap: Shares have average week but a great month
• Top brokers name 3 ASX shares to sell next week
• These were the best performing ASX 200 shares last week
• How the Commonwealth Bank (ASX:CBA) share price moved this week
• Why ASX bank shares may be facing a big sell-off in the next few weeks

Motley Fool contributor Aaron Teboneras owns shares of NIB Holdings Limited. The Motley Fool Australia has recommended NIB Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Recce Pharmaceuticals Ltd (ASX: RCE) share price has been a positive performer on Tuesday.

In morning trade, the pharmaceutical company’s shares are up 3.5% to $1.17.

This latest gain means the Recce Pharmaceuticals share price has now almost tripled in value over the last 12 months.

Why is the Recce Pharmaceuticals share price storming higher?

Investors have been buying Recce Pharmaceuticals shares this morning following the release of an update on its Recce 327 (R327) product.

According to the release, R327 has demonstrated bactericidal activity against all six antibiotic resistant ESKAPE pathogens. This includes drug resistant mutations (superbugs), as well as two additional World Health Organisation (WHO) priority pathogens list. The study was conducted by an independent Contract Research Organisation.

Management advised that the bactericidal activity of R327 demonstrated a three-log or 99.9% reduction in the number of colony forming units (CFUs) over 24 hours against all six strains at various concentrations and times.

What are ESKAPE pathogens?

These antibiotic resistant bacteria have been named ‘ESKAPE’ due to their propensity of escaping the biocidal action of antibiotics. They are collectively responsible for over 720,000 hospital acquired infections in the United States alone each year.

The ESKAPE pathogens include both Gram-positive and Gram-negative bacteria; Enterococcus faecium, Staphylococcus aureus, Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas aeruginosa, and Enterobacter species.

The release explains that ESKAPE pathogens are also responsible for 42.2% of blood infections, around 50 million infections each year, resulting in one in five deaths in the community or one in three deaths in hospitals and are associated with higher lengths of stay, cost of care, and mortality compared with non-ESKAPE pathogens.

In light of this, there is a large market opportunity for a successful anti-infective product.

Recce Pharmaceuticals’ CEO, James Graham, said: “We are encouraged by the data from this study and will continue to explore the potential of RECCE 327 to treat hospital-acquired infections. Antimicrobial resistance is one of the most urgent threats to global public health with the suite of ESKAPE pathogens posing a significant threat due to their virulence and rapid development of drug resistance.”

“Additionally, with R327 effective against two more priority pathogens listed by the WHO, we believe reinforces the potential of R327 to treat some of the greatest threats to human health,” he concluded.

More reading

• Why is the Recce (ASX:RCE) share price falling today?
• Recce (ASX:RCE) share price surges 6% on clinical trial registration
• The Recce (ASX:RCE) share price is up 7% after its drug saved a human
• Why EML, NextDC, Qantas, & Recce shares are racing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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