MoneyTalks: A few more hot picks out of COVID from Canary Capital
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Money Talks is Stockhead’s regular recap of the ASX stocks and sectors that are hot picks among fund managers and analysts.
Today we hear from Canary Capital executive director Paul Hart.
Hart thinks exosomes are poised to “become a whole new medical frontier with potential to overtake stem cell research”.
Since we last spoke with Hart, Canary led a $10 million capital raising for Exopharm. Hart told Stockhead COVID-19 was making biotech a hot pick for ASX investors.
“I think the whole pandemic has driven an interest in the sector,” he said.
Incannex is Canary’s second corporate client after Exopharm. Hart says his firm got behind Incannex because of “the way they’re running their business”.
“They’re going after drugs already off patent which means they’re already being used in humans and combining them with CBD to develop new drugs and they’re going after conditions or illnesses with big, unmet needs,” he explained.
While Incannex has multiple clinical programs, the one Hart was most excited about was against ARDS. ARDS is an inflammatory illness which is the main cause of COVID-19 deaths.
“What Incannex’s drug IHL-675A does (is) they have combined hydroxychloroquine with CBDs to create an entirely new drug,” Hart told Stockhead.
“They have different methods of action in terms of subduing the immune response so they work synergistically – so they’re going to be complementary together.”
In the current environment it potentially faces quicker regulatory approval and hence a faster path to market.
“In this market you don’t have to be Einstein to work out if someone gets a treatment to stop pneumonia [the cause of ARDS] that’s going to be huge, it’s going to stop the majority of [COVID] deaths we’ve seen around the world,” Hart declared.
Hart is also a fan of stocks benefiting from people working remotely – one of which is Harvest Technology Group.
Working remotely is a difficult challenge for companies with remote operations but Hart says Harvest has the technology to “enable companies to perform operations from over thousands of kilometres away”.
“They can do inspections of pipelines or oil and gas platforms.”
“That technology is booming due to people not being able to travel to [remote] sites – that’s another company doing well out of COVID.”
Hart also thinks cybersecurity stocks are doing well out of COVID in 2020 and picked Tesserent as one company having a particularly hot year.
It has gone from 3.2 cents back in March to 36.5 cents on Friday as demand for its services exploded.
“People are working from home, they’re not in an protected office with their systems are being monitored by an IT department,” Hart said.
“So Tesserent has done particularly well.”
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The views, information, or opinions expressed in the interviews in this article are solely those of the interviewee and do not represent the views of Stockhead.
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