Circassia Pharmaceuticals PLC (LON:CIR) shares jumped higher on Friday afternoon after news private equity firm CIP Merchant Capital Ltd (LON:CIP) has bought over a 3% stake in the company.

In a statement, the investment firm said it has acquired 12.8mln shares in Circassia, a specialty biopharmaceutical company focused on allergy and respiratory diseases, for £2.8mln. That represents 3.4% of Circassia’s issued share capital, Circassia now constitutes the CIP’s seventh portfolio company.

READ: Circassia to hit sales target as cash position improves

CIP pointed out that its board “believes Circassia has a clear route to profitability, having recently announced that the revenues for the 2019 year are expected to fall in the mid-range of its previously issued guidance of £60-£65 million.” 

It also noted out In April 2019, Circassia announced the US Food and Drug Administration approval of Duaklir, a drug for maintenance treatment of chronic obstructive pulmonary disease, which was later launched in October 2019.

The investment group added: “Circassia has also recently made what the Board believes to be positive changes to its leadership team, hiring executives with a proven track record.”

On Thursday, Circassia announced the appointment of Michael Roller, previously finance director at Corin Group and Bioquell, where he worked with Circassia’s executive chairman Ian Johnson, who was appointed last month.

Circassia shares rose 10.8% to 23.60p.