MoneyTalks: Why Peak Asset Management is betting on these biotech and lithium plays
MoneyTalks is Stockhead’s regular drill down into what stocks investors are looking at right now. We’ll tap our extensive list of experts to hear what’s hot, their top picks, and what they’re looking out for.
Today we hear from Peak Asset Management executive director Niv Dagan.
Dagan says right night now, he’s seeing investor flows into hard rock lithium as well as the biotech sector.
“Lithium brines, clays and other commodities are largely under-performing, relative to hard rock due to the large CAPEX requirements and ongoing demand profiles,” he says.
He says the biotech sector, while down ~4% in 2023 as a whole, is still optimistic on the back of 2023 market darling for the sector Neuren Pharmaceuticals (ASX:NEU).
In March, NEU announced that its North American partner Acadia Pharma received a historic US FDA approval of trofinetide, marketed as DAYBUE, making the drug the first and only approved treatment for Rett syndrome in the world.
He says the FDA instituting its Accelerated Approval Program to allow for earlier approval of drugs that treat serious conditions is also a boost to the healthcare sector.
The explorer is focused on ventures in Brazil and Papua New Guinea (PNG) with assets showing significant potential for various valuable metals, including lithium, copper and gold.
In June GMN announced it had secured a 75% interest in a cluster of favourable lithium licences located within the new lithium hotspot of eastern Brazil.
“GMN has amassed an extensive large footprint in the lithium Valley of Brazil,” Dagan says.
In July GMN provided an update on its Brazil lithium projects with highlights including more than 250 pegmatites now known on the Logradouro tenements.
GMN says the Logradouro tenements were up to 16m of continuous outcrop and in two instances, the pegmatites may have been up to 55m and 60m wide with discontinuous outcrops.
Among its neighbours in Brazil is Latin Resources (ASX:LRS) which has seen its market cap soar more than 250% this year with the company upgrading its mineral resource and identifying a new lithium corridor.
“PEAK recently raised $2.25 million at $0.0075/share to fast track the company’s exploration activities and we are expecting results of 62+ assays over coming weeks from their recent field program,” Dagan says.
Dagan says he was very excited to hear that DXB has achieved a key milestone in its global Phase 3 Focal Segmental Glomerulosclerosis (FSGS) trial with the last patient of the first 72 patient cohort now randomised with a March 2024 date for interim outcome results.
DXB’s Phase 3 trial is titled Angiotensin II Type 1 Receptor (AT1R) & Chemokine Receptor 2 (CCR2) Targets for Inflammatory Nephrosis – or ACTION3 for short.
The pivotal multi-centre, randomised, double-blind, placebo-controlled trial is establishing the efficacy and safety of DXB’s lead drug DMX-200 in patients with FSGS who are receiving a stable dose of an angiotensin II receptor blocker (ARB).
Total FSGS market size across the seven major markets is estimated to be more than US$3 billion by 2032, driven by ~220,000 FSGS sufferers in those areas and premium orphan drug pricing.
DMX-200 has Orphan Drug Designation from the FDA, EMA, and UK, enabling potential fast-track of commercialisation upon successful results.
“We are extremely excited by the company’s final dosage of its 72nd patient, giving us a firm date for their PHASE 3 Interim Analysis results expected in Q1 CY24,” Dagan says.
“PEAK is the fourth largest shareholder and at ~$25m Enterprise Value, sees tremendous upside leading into trial results for its DMX-200.”
SBR is focused on exploration and development of a highly prospective portfolio of nickel sulphide, lithium and gold assets in Western Australia along with uranium and base metal prospects in the Northern Territory.
Its flagship Sherlock Bay nickel-copper-cobalt project is down the road from the Mark Creasy-backed Azure Minerals (ASX:AZS) Andover discoveries in WA’s Pilbara.
On August 4, AZS stunned the market with a massive spodumene intersection of 209m grading 1.42% Li20 at Andover.
The news stood as one of the best lithium drilling results in the world and sent the ~$1 billion capped explorer above 20% in its early morning trade.
AZS has already seen multiple +100m (and high-grade) lithium intersections at the project.
“SBR has a large footprint in Andover, only ~30km away from AZS’s recent hits,” Dagan says.
“We are eagerly awaiting further results coming from their recent Sherlock lithium exploration program.”
He says SBR is well funded with more than $4.5 million in cash and an enterprise value of ~$4M.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
At Stockhead, we tell it like it is. While Dimerix is a Stockhead advertiser, it did not sponsor this article.