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The Woodside Petroleum Limited (ASX: WPL) share price is edging higher today after the company announced it has completed the Sangomar acquisition.

At the time of writing, the energy giant’s shares are up 0.85% at $22.51.

Quick take on the Sangomar project

Woodside’s recently acquired Sangomar project contains both oil and gas, and is located 100km south of Dakar, Senegal. The project covers a combined area of 7,490sq km within the Senegalese portion of the Mauritania-Senegal-Guinea Bissau Basin. It is said to be one of the world’s largest oilfields discovered in the last decade.

While work has already started earlier this year, first oil production is being targeted by 2023. Phase one is expected to be around 100,000 barrels of oil per day. In total, it is estimated that the Sangomar offshore oil project is worth around $6 billion.

What did Woodside announce?

In today’s release, Woodside advised that it has completed the acquisition of the entire participating interest of Capricorn Senegal Limited (Cairn) in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture.

Woodside spent US$300 million plus a working capital adjustment of US$225 million to complete the transaction. In addition, the company is expecting up to US$100 million of further payments depending on the price and timing of first oil production.

With the deal all wrapped up, Woodside’s equity interest lifted to 68.33% in the Sangomar exploitation area and to 75% for the remaining RSSD evaluation area. However, the company’s stake could further increase should the FAR Ltd (ASX: FAR) acquisition also be finalised. This would bring Woodside control of 82% for the Sangomar region and 90% of the RSSD area.

What did management say

Commenting on the acquisition, Woodside CEO Peter Coleman said:

The development of Sangomar is being executed according to schedule. The Senegal team recently achieved another milestone, with the award of the contract for the operations and maintenance of the floating production storage and offloading vessel which is targeted for delivery and first oil production in 2023.

The completion of the transaction with Cairn has simplified the structure of the joint venture ahead of our planned equity sell-down in 2021. The Sangomar development is an attractive, de-risked asset that offers near-term production to potential buyers.

Woodside share price performance

The Woodside share price is down 35% from the past 12 months, which could be seen as an attractive discount for shareholders. While energy companies have been battered from COVID-19, the industry is slowly on the mend. From March lows, the Woodside share price has gained more than 50%.

Woodside has a market capitalisation of $21.4 billion.

More reading

• Here’s how ASX 200 energy shares have performed in 2020 so far
• Why AGL, Mesoblast, WiseTech, & Woodside are dropping lower
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 Weekly Wrap: ASX hits new post-March high
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Aaron Teboneras owns shares of Woodside Petroleum Ltd. 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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The Stockland Corporation Ltd (ASX: SGP) share price is climbing higher this morning after the Aussie real estate investment trust (REIT) announced a new joint venture partnership.

Why is the Stockland share price climbing?

Stockland announced a “strategic capital partnership” with J.P. Morgan Asset Management to help enhance risk-adjusted returns. The new joint venture will focus on growing the group’s logistics investment with a long-term, institutional capital partner.

Stockland Chief Investment Officer Darren Rehn said the initial portfolio will comprise assets valued at $400 million.

Two properties that Stockland has recently exchanged contracts to acquire — 151 Leakes Road, Truganina and 140S Paramount Boulevard, Cranbourne West — will seed the new vehicle. The combined total of the assets is approximately $110 million. 

Stockland requires Foreign Investment Review Board (FIRB) approval for these transactions, with completion expected by mid to late 2021.

Stockland is forecasting $200 million in assets once third-party purchases are included, with a further $200 million of existing assets to be acquired from Stockland’s logistics portfolio.

The joint venture will primarily target the acquisition of established assets with solid, reliable income streams. Assets will be purchased on market and be primarily located along the “high-performing” eastern seaboard.

Stockland managing director and CEO Mark Steinert said:

We have a clear goal to introduce third party capital with trusted, quality partners to help fast track the delivery of our development pipeline and expand our acquisition capability, and we’re delighted to have partnered with such a highly regarded, international group.

Forming relationships with capital partners like this enables us to scale our management and development capabilities, grow assets under management more quickly, and enhance growth to achieve returns in line with or above our investment hurdles.

Foolish takeaway

Investors have reacted positively to the news, with the Stockland share price climbing 2.9% higher to $4.28 per share. The Stockland share price has slumped 10.5% this year but is up 131.1% since the bottom of the March bear market.

The Aussie REIT has a market capitalisation of more than $10 billion, with a 5.3% dividend yield.

More reading

• 3 ASX REITs with notable ESG scores
• Which ASX 200 sectors performed the best in November? 
• Why Harvey Norman, Northern Star, Stockland, & TechnologyOne shares are charging higher
• Stockland (ASX:SGP) share price up 3% after new chief announced

Motley Fool contributor Ken Hall 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to bounce back from yesterday’s drop. At the time of writing the benchmark index is up 0.9% to 6,658.2 points.

Four shares that are climbing more than most today are listed below. Here’s why they are storming higher:

A2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price is up a further 3.5% to $11.15. Investors have been buying the infant formula company’s shares this week after a horror showing a week earlier. It appears as though some investors believe the sell off on Friday has dragged its shares down to an attractive level. The a2 Milk share price was sold off after it downgraded its guidance for FY 2021.

Air New Zealand Limited (ASX: AIZ)

The Air New Zealand share price is up 3.5% to $1.64. This follows the release of an update on its operations this morning. Air New Zealand revealed that it carried a total of 690,000 passengers in November. While this is roughly half what it carried a year earlier, it is an improvement from earlier in the financial year.

Mesoblast limited (ASX: MSB)

The Mesoblast share price is up 6% to $2.30 despite there being no news out of the biotech company. However, with its shares halving in value over the last few trading days, some investors may believe they have been oversold. Alternatively, as Mesoblast is one of the most shorted shares on the ASX, the buying could be from short sellers closing positions.

Recce Pharmaceuticals Ltd (ASX: RCE)

The Recce share price has pushed 4% higher to $1.12. The catalyst for this was the release of results from its international SARS-CoV-2 (COVID-19) in-vivo studies. The results demonstrate positive activity of RECCE 327 (R327) and RECCE 529 (R529) against COVID-19 in Syrian golden hamsters. Management believes this hamster study is the first indication of the potential for nasal administration of its anti-infective compounds, specifically when used against viruses.

More reading

• Air New Zealand (ASX:AIZ) share price rises despite falling air traffic
• Recce (ASX:RCE) share price charges higher on COVID-19 update
• Why a2 Milk and these ASX shares have been smashed in 2020
• 7 top ASX biomedical shares in 2020
• Leading brokers name 3 ASX shares to sell today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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 Primero Group Ltd (ASX: PGX) share price has slipped today on news the company directors have accepted a takeover bid.

The company announced this morning that its directors, who own 30.42% of the company’s shares, have accepted NRW Holdings Limited (ASX: NWH)’s conditional off-market takeover bid.

The Primero share price has fallen almost 2% to 55 cents on the news , while the NRW share price dipped by 0.35% to $2.86 at the time of writing.

What else did today’s announcement say

Primaero advised that, as a result of today’s acceptances, NRW now has built up a stake of just over 48% of Primero shares.

The Primero directors continue to unanimously recommend that its shareholders accept NRW’s offer, which will expire on 22 January 2022.

In the announcement, NRW told Primero shareholders that by accepting the offer, they would be investing a financially stronger company with an attractive dividend policy. It also warned shareholders that the Primero share price may fall if the takeover was unsuccessful.

Details of the takeover offer

The takeover by NRW values Primero at an equivalent of 55 cents per share, or a total equity value of approximately $100 million.

Primero’s directors collectively own approximately 30.42% of Primero shares. Each of those directors had already confirmed in November of their intention to accept the offer in respect of all Primero shares they own. Primero also said that its management team would remain with the business under NRW ownership.

NRW meanwhile said that it will fund the acquisition through a combination of cash on its balance sheet, and a $50 million bank loan facility. 

Both companies believe there are synergies to be achieved through this merger, which will allow the combined entity to expand to other pipelines businesses and opportunities. 

A quick take on Primero and NRW

Primero provides engineering design, construction and operational services to the minerals, energy and infrastructure sectors. The Primero share price has risen by more than 60% in 2020, and it commands a market capitalisation of around $96 million.

NRW is a much bigger company than Primero, and provides contract services to the resources and infrastructure sectors across most states of Australia. The NRW share price has fallen 10% in 2020, and it commands a market cap of $1.2 billion.

More reading

• Primero (ASX:PGX) share price surges 10% on takeover news

Motley Fool contributor Eddy Sunarto 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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The Air New Zealand Limited (ASX: AIZ) share price is on the move today, after the airline announced its latest monthly traffic update where it reported a 50.8% drop in passenger traffic in November 2020 compared to November 2019.

The Air New Zealand share price has, however, risen by 2.5% to $1.62 in morning trading, amid a broader rise in the ASX.

Dismal air passenger figures

Air New Zealand reported that it carried a total of 690,00 passengers in November 2020. This compares with 1.4 million passengers it carried in November 2019.

For the financial year to date, which ends on 30 June 2021, Air New Zealand says that it carried 58.2% less passengers than the same period last year.

Its revenue passenger kilometres (RPK) figures also took a big hit, down 85.2% in November versus the corresponding period in 2019, and 87.1% lower in the financial year to date.

RPK is a standard measure of traffic for an airline flight, bus, or train calculated by multiplying the number of revenue-paying passengers aboard the vehicle by the distance travelled.

The airline’s long haul flights naturally took the biggest hit, down by 95.9% in November as international flights are still effectively banned.

Its Tasman flights however, were only down by 28%. This is because since October, New Zealanders have been able to travel to Australia without going into quarantine (except for arrivals in Western Australia), but not the other way around.

About the Air New Zealand share price

The Air New Zealand share price has lost more than 40% this year, as carriers around the word took the full brunt of the coronavirus pandemic travel ban.

As a comparison, the share price of Australia’s own Qantas Airways Limited (ASX: QAN) has dropped 32% in 2020.

The dull performance of the Air New Zealand share price is reflective of its FY20 results, where it reported its first loss in 18 years, The airline reported a loss of $87 million for the full year.

The Air New Zealand share price has a long way to go to reach its 52-week high of $2.94. At today’s price level, the airline commands a market cap of $1.9 billion.

More reading

• Why this fund manager prefers Transurban over Sydney Airport, Flight Centre and Qantas
• 3 best and worst performing ASX transport shares of 2020
• ASX 200 ends slightly down
• ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
• ASX 200 Weekly Wrap: ASX hits new post-March high

Motley Fool contributor Eddy Sunarto 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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The Transurban Group (ASX: TCL) share price is pushing higher on Wednesday following the release of an update on its distribution plans.

In morning trade the toll road giant’s shares are up 0.5% to $13.95.

What did Transurban announce?

This morning the company revealed that a distribution totalling 15 cents per share will be paid to shareholders for the six months ending 31 December 2020 from the Transurban Holding Trust.

In addition, the company revealed that on this occasion, Transurban Holdings Limited will not be paying a dividend for the period, nor will there be any franking credits attached to its distributions.

This interim distribution is less than half of what the company paid in the same period last year. That distribution was 31 cents per share and included a 2 cent fully franked dividend from Transurban Holdings Limited.

What about the full year?

Traditionally Transurban provides its guidance for the full year with the announcement.

However, on this occasion, the COVID-19 pandemic means management cannot be specific with its plans.

It commented: “Transurban advises that it continues to anticipate that the FY21 distribution will be in line with Free Cash, excluding Capital Releases. This includes the distribution of 15.0 cents per security for the six months ending 31 December 2020.”

However, if a recent broker note out of UBS is to be believed, investors should expect a fully year distribution of 44 cents per share.

Which based on the current Transurban share price, implies a forward 3.1% dividend yield.

Distribution Reinvestment Plan.

The company also revealed that its Distribution Reinvestment Plan (DRP) will operate for the interim distribution.

However, no discount will be applied when determining the price at which stapled securities will be issued under the DRP for this distribution.

The directors have determined that the DRP pricing period in relation to this distribution will be the period of 10 trading days, commencing 7 January 2021.

More reading

• Why this fund manager prefers Transurban over Sydney Airport, Flight Centre and Qantas
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps
• Transurban (ASX:TCL) share price wobbles on new CFO announcement
• ASX 200 Weekly Wrap: ASX hits new post-March high
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. 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 Smartgroup Corporation Ltd (ASX: SIQ) share price has rocketed 7.6% higher in early trade this morning after the company released its latest earnings guidance.

Why is the Smartgroup share price on the move?

Smartgroup has provided an update on its earnings expectations for the full year ending 31 December 2020. The Aussie salary packaging and novated leasing company is reporting a strong second half of the year.

The Smartgroup share price rocketed more than 7% at the open following the update. Smartgroup shares are up 19.8% to $6.30 since 3 November, despite falling 6.9% in 2020.

In today’s release, Smartgroup advised it is expecting an adjusted net profit after tax of $65 million for the full calendar year. An improved operating earnings before interest, tax, depreciation and amortisation (EBITDA) margin has also benefitted Smartgroup’s earnings. The company is expecting an operating EBITDA margin of 44% for the second half, which is up just slightly from 43% in the first half of the year.

The company’s forecast operating EBITDA of $47 million for the second half is attributed to improved cost controls offsetting decreased novated leasing volumes from the first half.

Smartgroup is also forecasting a number of salary packages and novated leases under management in line with the first half of 2020.

Smartgroup Managing Director and CEO, Tim Looi, said Smartgroup remains “cautious”, but highlighted the company’s “encouraging” full year profit result and a “positive trend” in novated lease enquiries.

However, Mr Looi said the current environment is fragile, with potential further economic disruption. The coronavirus pandemic and public health responses continue to challenge consumer confidence and the Smartgroup business.

Foolish takeaway

The Smartgroup share price has been up and down throughout the year. At the time of writing, shares in the salary packaging group are trading at a price to earnings (P/E) ratio of 16.9 with an $836.8 million market capitalisation.

More reading

• Here’s how ASX 200 energy shares have performed in 2020 so far
• Here’s why the Bigtincan (ASX:BTH) share price is dropping lower
• Recce (ASX:RCE) share price charges higher on COVID-19 update
• ASX miners put on alert as the iron ore price crashes overnight
• 2 small cap ASX healthcare shares to watch

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SMARTGROUP DEF SET. 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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Of all the sectors on the S&P/ASX 200 Index (ASX: XJO), few have disappointed investors more in 2020 than ASX energy shares.

2020 has delivered its fair share of challenges to be sure (as we all know), but the energy sector has not been well-placed to deal with them.

You only need to compare the performance of this sector against, say, tech shares, or consumer staples, to see this. In fact, out of all the companies in this sector, only one is actually above where it started the year, as you can see below:

ASX energy share	YTD share price gain (as of 22 December)	Market capitalisation
Oil Search Ltd (ASX: OSH)	(50.78%)	$7.23 billion
Origin Energy Ltd (ASX: ORG)	(44.33%)	$8.3 billion
Whitehaven Coal Ltd  (ASX: WHC)	(37.16%)	$1.67 billion
Woodside Petroleum Ltd (ASX: WPL)	(35.25%)	$21.48 billion
New Hope Corporation Limited (ASX: NHC)	(33.09%)	$1.15 billion
Beach Energy Ltd (ASX: BPT)	(28.97%)	$4.08 billion
Worley Ltd (ASX: WOR)	(26.99%)	$5.85 billion
Santos Ltd (ASX: STO)	(25.67%)	$12.73 billion
Ampol Ltd (ASX: ALD)	(18.14%)	$6.95 billion
Viva Energy Group Ltd (ASX: VEA)	(15.13%)	$3.11 billion
Washington H. Soul Pattinson & Co Ltd (ASX: SOL)	42.33%	$7.26 billion

All of these shares are in the ASX 200 Index, save for New Hope.

But why such a terrible year? We all need energy at the end of the day. It is an essential input into all other forms of economic activity. Even futuristic tech companies need energy to function.

Well, it comes down to how this sector functions. See, ‘energy’ usually means oil, crude oil to be specific. Also included is gas and coal of course, but gas, coal and oil are very closely interrelated when it comes to pricing dynamics and profitability. So let’s see what’s happened in the oil space this year.

Energy has a shocker of a year

According to Business Insider, Brent crude started the year at an approximate price of US$66.25 a barrel. But the onset of the coronavirus pandemic saw this change very abruptly.

Such a sudden, massive economic change played havoc with oil prices. That’s what happens when all of a sudden, people around the world stop flying on aeroplanes, going on cruises and driving to work.

By April, Brent crude prices had crashed to multi-year lows of under US$20 a barrel. At the same time, futures contracts for another type of crude oil, West Texas Intermediate (WTI) actually went negative for the first time in history. That means that back in April, investors were actually paying people to buy and store oil.

We saw this trend play out across all energy commodities, not just crude oil. At the start of the year, natural gas was priced at approximately US$2.19 per MMBtu. That had fallen to US$1.55 by April. Similarly, thermal coal was asking around US$45 a tonne at the start of the year. That was down to US$34 by April.

All of these wild price fluctuations would not have been welcome by the companies in the ASX energy sector. Most of these companies are price takers, meaning they have to accept the international market price for the commodities they extract. The only thing they can really control is their own cost of production. So an oil company that had a cost of extracting one barrel of crude of US$40 would have been comfortably profitable in January, only to be bleeding money by April.

What recovery?

At the time of writing, commodity prices have recovered and stabilised somewhat. But even today, Brent crude is still only trading at US$50.91 (at the time of writing). That’s a long way from the US$66 it was asking at the start of the year. And those margins make a big difference to the profitability of ASX energy shares for the reasons we’ve just discussed.

Another headwind ASX energy shares have been facing in 2020 is a rising Australian dollar. Since almost all commodities are priced in US dollars, a rising Aussie hurts these companies’ profitability. It means that they have to swap more Aussie dollars for each US dollar when they sell their commodities on international markets.

And right now, the Aussie is pretty close to a 3-year high against the greenback right now. That would have offset much of the recent gains in oil, coal and gas prices – another headache these companies have had to deal with.

It’s not all bad for ASX energy shares

Saying all of this, it’s important to note that, while these ASX energy shares are mostly still down year to date, many have had spectacular recoveries since finding their bottom. An occurrence that might have been taken advantage of by a few savvy investors.

For example, whilst Oil Search remains down more than 50% year to date, it is also up more than 90% since 23 March. Likewise, Beach shares are up more than 88% over the same period.

It is worth mentioning the elephant in the room before we go. Washington H. Soul Pattinson & Co (‘Soul Patts’ for short) has had a sector-defying 44% gain year to date and is currently trading pretty close to its all-time high.

But before you get carried away with this ‘energy wunderkind’, note that that Soul Patts is barely an energy company. It does hold a stake in New Hope Corporation. But in reality, Soul Patts is a massive conglomerate, with large stakes in a range of ASX shares. These include Brickworks Ltd (ASX: BKW), TPG Telecom Ltd (ASX: TPG) and Australian Pharmaceutical Industries Ltd (ASX: API).

So if you’re wondering why this company is an outlier, it’s likely because Soul Patts has little relative exposure to the energy sector compared to its peers.

More reading

• ASX miners put on alert as the iron ore price crashes overnight
• Why the Challenger (ASX:CGF) share price is one to watch today
• Experts pick the best ASX IPO of 2020
• 7 top ASX biomedical shares in 2020
• 3 ASX 200 shares that keep growing the dividend

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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 Bigtincan Holdings Ltd (ASX: BTH) share price is on the move on Wednesday following the release of an announcement.

In early trade the sales enablement automation platform provider’s shares are down 1.5% to $1.09.

What did Bigtincan announce?

This morning Bigtincan announced that it has entered into a binding agreement to acquire unified sales enablement platform provider, ClearSlide.

According to the release, the company has agreed a purchase price of US$16.25 million (A$22.6 million) in cash with ClearSlide’s sole shareholder, Corel Inc.

This purchase price represents ~3.1x ClearSlide’s estimated calendar year 2021 sustainable annualised recurring revenue (ARR) of ~US$5.2 million.

Why ClearSide?

ClearSlide is a leading sales engagement company whose offerings help full cycle sales and service teams that want to smooth the friction between their buyers and sellers.

Management notes that it brings significant new technology that complements Bigtincan’s existing technology and supports Bigtincan’s long-term strategy to lead in optimising buyer seller engagements. It also brings hundreds of customers to Bigtincan, including NBC Universal, The Economist, Aflac, web.com, and Comcast Spotlight.

It advised that these customers use ClearSlide’s technology to connect with their customers using the built in remote connectivity platform and advanced engagement tools including sales campaign management. They also use its sophisticated analytics to better understand and connect with their customers.

Bigtincan’s Co-Founder and CEO, David Keane, commented: “As part of meeting our mission and vision of empowering every customer facing worker to be successful in the new digital and remote economy adding ClearSlide sales engagement technology and the customer base brings new opportunities for Bigtincan to extend our market space and continue our leadership position.”

Bigtincan also quoted Jim Lundy in its release. He is the founder and CEO of technology research firm, Aragon Research.

Mr Lundy said: “The Sales Enablement market continues to grow, and with market growth comes consolidation. The Bigtincan acquisition of ClearSlide brings together two market leaders in Sales Enablement that combined will make Bigtincan one of the largest providers in the market.”

Institutional Placement.

In order to fund the deal, the company launched and successfully completed a $35 million institutional placement.

These funds were raised at an issue price of $1.05 per new share, which represents a 5.8% discount to its last close price.

Management advised that the placement was well supported by new and existing institutional investors.

FY 2021 guidance.

In addition to the acquisition, management revealed that the company remains on track to achieve its guidance in FY 2021.

It continues to forecast ARR of $49 million to $53 million, revenue of $41 million to $44 million, and stable retention. It also revealed that both organic growth and acquisition-related growth is on track.

This compares to Bigtincan’s FY 2020 ARR of $35.8 million.

More reading

• 2 rapidly growing ASX tech shares to buy
• 2 rapidly-growing small cap ASX shares to buy
• Why the Bigtincan (ASX:BTH) share price charged 4% higher today
• 3 small cap ASX tech shares growing at a rapid rate

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO. The Motley Fool Australia has recommended BIGTINCAN FPO. 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 is pushing higher on Wednesday after the release of an announcement.

In morning trade the pharmaceutical company’s shares are up 4% to $1.12.

Why is the Recce share price pushing higher?

Investors have been buying the company’s shares this morning after it announced results from its international SARS-CoV-2 (COVID-19) in-vivo studies.

According to the release, the results demonstrate positive activity of RECCE 327 (R327) and RECCE 529 (R529) against the SARS-CoV-2 virus in Syrian golden hamsters.

The release explains that the study consisted of five groups of eight hamsters, each receiving a different treatment. These were a placebo control of saline nasal wash, a low dose of R327, a high dose of R327, a low dose of R529, and a high dose of R529.

All animals were infected with SARS CoV-2 on day zero, with treatments administered twice daily on days one to five.

The results, in both R327 and R529, demonstrated a positive reduction in COVID-19 viral load compared to the placebo group. On day four the low R529 dose achieved a log reduction in the order of 1.5 logs and the high dose of R327 achieved a log reduction of 1.25 logs.

However, two of the five hamsters with COVID-19 infection on day six indicated adverse clinical symptoms in the high dose R529 group and were excluded from the study. Though, management believes this is a study specific anomaly, because R529 was routinely well tolerated at considerably higher intravascularly infused doses in-vivo.

What now?

Management believes this hamster study is the first indication of the potential for nasal administration of its anti-infective compounds, specifically when used against viruses.

A gold-standard ferret COVID-19 study is underway in the United States seeking to build upon this method of administration. This includes higher dose concentrations and two other forms of administration, only possible in larger species. The data from this study is expected in early 2021.

Though, management has warned investors to not get too excited just yet. It commented: “Whilst Recce is delighted by the results, further testing must be completed before R327 or R529 are confirmed as being safe or effective against the SARS-CoV-2 virus.”

More reading

• Here’s why the Bigtincan (ASX:BTH) share price is dropping lower
• ASX miners put on alert as the iron ore price crashes overnight
• 2 small cap ASX healthcare shares to watch
• Why the Althea (ASX:AGH) share price will be on watch today
• Why a2 Milk and these ASX shares have been smashed in 2020

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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