The biotechnology sector in Australia raised a collective $739.1 million in 2013 and some ASX-listed companies saw many-fold surges in share prices. The sector has a combined market capitalisation of around $50 billion.
The biotech sector in the US has outperformed the market over the past year. Some see signs of yet another biotech bubble. But as The Economist notes this week, although biotechs have undergone cycles of boom and bust for four decades, there are some signs – as smaller companies feed R&D to bigger ones, and as scientists start to reap the benefits from the mapping of the human genome – that this cycle may be different.
Business Insider Australia asked Mark Pachacz, Research Principal at Bioshares, Scott Power, Senior Analyst at Morgans and Matthijs Smith, Senior Analyst, Canaccord Genuity, to name the biotech companies to watch in 2014.
Innate Immunotherapeutics and Impedimed were picked by all three analysts. Tissue Therapies, Viralytics and Cogstate were included in top ten lists by two of the three analysts.
These were picked by all three analysts:
Impedimed (IPD): (Bioshares, Morgans, Canaccord) L-Dex is a non-invasive tool for assessing lymphedema. Patients covered in the US by Medicare should largely have insurance cover for lymphedema assessment from 2015. Coverage from private payers is dependent in part from progress Impedimed makes with a trial of the L-Dex system.
Innate Immunotherapeutics (IIL): (Bioshares, Morgans, Canaccord) Has a drug candidate to treat a form of MS. Already in use under a compassionate program of 17 people in New Zealand delivering significant results. There is an untapped market worth more than USD 3 billion to treat secondary progressive MS. About to start a Phase IIb study in Australia.
And these by two analysts:
Tissue Therapies (TIS): (Bioshares and Morgans) No additional clinical trials are required in Europe for the Tissue Therapies wound healing product, VitroGro. The company is ready to start selling the product into five countries across Europe once approval is received.
Viralytics (VLA): (Bioshares, Canaccord) Using a virus to kill cancer. Very good Phase II data emerging. Just raised $27 million. A comparable company, Biovex, was acquired by Amgen in a deal worth close to USD 1 billion. Viralytics’ data is as good as Biovex/Amgen, but about 2 years behind.
And in no particular order, here are some of the other picks:
Somnomed (SOM): (Bioshares) The sleep apnea treatment company sold 35,841 devices in FY2013, an increase of 16%. In November it announced more than 150,000 people had been fitted with a Somnodent. The company has reinvested earnings into market development and marketing.
GRXPHARMA (QRX): (Bioshares) Working with the FDA (Food and Drug Administration) to have MoxDuo IR approved as a pain drug. QRxPharma recently raised $11.6 million and is signing up partners in Australia, New Zealand, USA, Canada, Israel and South Africa to sell its product upon approval.
Oncosil Medical (OSL): (Bioshares) Beta-radiation therapy for the treatment of pancreatic cancer. The company expects to start a pivotal study in the second quarter of 2014. The company estimates the potential market to be over US$400 million a year.
Analytica (ALT): (Bioshares) The Pericoach system was approved by the TGA (Therapeutic Goods Administration) in November. The system integrates a device with a smartphone and clinician portal so that women can better manage and improve their pelvic muscles. An estimated 30% of child-bearing women experience weakness in the pelvic area and this impacts on continence control.
Universal Biosensors (UBI): (Bioshares) Getting $3.4 million a year in royalties from glucose strip sales by Johnson & Johnson that UBI developed. This should double in next 12-24 months. Also four new tests to be launched globally by Siemens in next 12-18 months which use the UBI technology.
Alchemia (ACL) – (Morgans) It has an FDA approved drug (Fondaparinux sodium) and a late stage oncology product pipeline. It’s Phase 3 results for a bowel cancer drug are due in the second quarter of calendar 2014.
Neuren (NEU) – (Morgans) Clinical trials running in niche central nervous system disorders. Drugs target acute indications of brain injury such as traumatic brain injury, as well as chronic conditions such as Rett Syndrome and Fragile X Syndrome.
QRX Pharma – (Morgans) Acute pain relief seeking US approval. A pharmaceutical company focused on the development and commercialisation of new treatments for pain management and abuse prevention products.
Osprey (OSP): (Canaccord) Marketing a delivery system that reduces the amount of kidney-damaging X-ray dye that needs to be used in medical procedures.
DorsaVi (DVL): (Canaccord) Marketing a device that provides simple and easy access to accurate data on movement and posture which helps physiotherapists, elite sports people and OH&S assessmen.
Nanosonics (NAN): (Canaccord) Marketing a device that allows rapid and simple high-level disinfection of intra-cavity ultrasound probes between patients to reduce the risk of infection
Sirtex (SRX): (Canaccord) Marketing special radioactive beads that provide highly localised radiotherapy and are used to treat liver cancers that cannot be surgically removed
Starpharma (SPL): (Canaccord) Using drug delivery technology to significantly improve the therapeutic benefit and safety of some of the most commonly used anticancer drugs
GI Dynamics (GID): (Canaccord) Developing and marketing an implantable device that significantly reduces the symptoms of type-2 diabetes and leads to significant weight reduction in obese patients
* The above is not intended as investment advice. Consult your broker about your investment decisions.