This is Business Day's editorial on 4 July 2024

Wild rush for new-age pharmaceutical shares show that expectations are, well, high!

No doubt a few older investors had flashbacks last week to the heady new listings boom of the late 1990s.

New listings have been few and far between on the JSE in recent years and most have been low-key. But new-age pharmaceutical business Cilo Cybin Holdings had a mind-altering market debut last week.

The shares — some of which were placed privately at 100c each — touched 950c in dizzy trading reminiscent of 25 years ago, when excitable investors went on a mad chase for any new internet and specialist financial services counters on the JSE.

Cilo Cybin is certainly a colourful counter. The company focuses on the “production and processing of personalised, precise and preventative medicine” — including patented drugs within the medicinal cannabis and psychedelic products sectors. A couple of smaller JSE counters have taken this trip in recent years but floundered as they struggled to convince the market around sustainable viability and operational scale.

Of course, it’s not Cilo Cybin’s first rodeo. The company pitched for a listing in late 2022 and raised R20.5m. That was unfortunately not enough to meet JSE requirements for a special purpose acquisition vehicle, and the listing was canned.

The second tilt at a JSE listing came with more formidable strategic backing as well as a pipeline of potential acquisitions — other than current negotiations to acquire Cilo Cybin Pharmaceutical.

At the time of writing, the company carried a market value of more than R600m, meaning a “paper” ten-bagger for the prelisting participants. Too far out, we wonder?

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