ScoPo’s Health Powerplays: The money keeps flowing for the ASX biotechs
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Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 24 years, explains what the movers and shakers have been doing in health and gives his ASX powerplays.
Scott Power was bullish last week and remains so in the last full week of the third quarter.
“It looks like governments are going to perform further stimulus and interest rates will remain lower for longer, so that presents us with a reasonably sound basis for equities, he said.
“Money is going to keep flowing into the equity market. It feels like any dips are going to be bought up.”
Amplia, which earlier this month received ethics clearance to begin a phase-one trial of its idiopathic pulmonary fibrosis drug AMP945, gained after director Robert Peach bought another $35,000 worth of shares.
“He’s a guy with a very good track record,” Power said of Peach, the founder of Receptos, a US biotech company that was acquired by Celgene in 2015 for $US7.2bn ($3.8bn).
Immutep gained after its cancer-fighting drug candidate efti showed early promise in a clinical trial, while Antisense gained despite Platinum Investment Management selling off $76,000 in shares.
Also this week, Telix Pharmaceuticals (ASX:TLX) asked the US Food and Drug Administration to approve its prostate cancer imaging agent TLX591-CDx.
“That’s a very positive step for them,” Power said. “Telix is a company that we think is doing some very interesting things. We’re keeping a close eye on them.”
Telix, which is developing therapeutic and diagnostic products using low-dose radiation, also this week began dosing the first patients in a phase-one study of its potential cancer imaging therapy, Apomab.
Over the week antimicrobial company Recce Pharmaceuticals (ASX:RCE) raised $28m; microscopic imaging company Optiscan Imaging (ASX:OIL) raised $10m and Throney Investment Group took a 5.2 per cent stake in clinical cannabis company Zelira Therapeutics (ASX:ZLD).
“That’s an interesting strategic stake,” Power said of Thorney’s $2m investment.
The three capital raisings show that for “companies that are looking to raise money, there’s a good appetite out there,” Power said.
Power reiterated his bullish call on mammography software company Volpara Health Technologies (ASX:VPT) given the likelihood the FDA will soon require that US women be told if they have dense breasts when receiving mammograms.
“It will really focus the importance on breast density in breast cancer screenings around the world,” he said. “That’s something we are really highlighting to our investors.”
October is breast cancer awareness month, and with in-person events cancelled there’ll likely be a digital push that could boost the Kiwi company, Power said.
He’s also keeping an eye on Mesoblast (ASX:MSB), which Power called “pregnant with news”.
The company is waiting on an FDA ruling, due by September 30, on its graft-versus-host disease treatment, but Power said the readouts of its phase-three clinical trials for stem cell treatments for heart failure and lower back pain treatments were actually more important for the biotech company.
Lastly, Power highlighted the €380m ($635m) purchase of Irish biotech company Inflazome by Swiss pharmaceutical giant Roche.
Inflazome was founded in 2016 by Professor Matt Cooper of the University of Queensland in Australia and Professor Luke O’Neill at Trinity College in Dublin, Ireland.
The company focuses on developing oral drugs to address a range of inflammatory diseases from Parkinson’s and Alzheimer’s to asthma and inflammatory bowel disease.
The “extraordinary” deal highlights how multinationals are looking around the world for assets dealing with inflammatory diseases, Power said.
“It’s been a solid week,” he said.
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