• Biotech is making a comeback in 2023
  • There’s been a couple of breakthroughs on the ASX this year
  • We take a look at the ASX biotech winners in May

 

There are clear signs the biotech sector is springing back to life after a disappointing 2022.

The benchmark US Biotech ETF index, also known as the XBI, has quietly risen by 3% over the past six months.

In Australia, the S&P/ASX 200 Health Care [XHJ] index has also climbed by 10% this year, outpacing the benchmark ASX200 gain of 2%.

This comes as the big institutional funds have begun to re-enter the picture.

US-based ARK fund manager Cathie Wood loaded up on biotech names as she went on a shopping spree in April and May.

Wood bought shares such as Crispr Therapeutics AG (NASDAQ:CRSP), Intellia Therapeutics (NASDAQ:NTLA), Verve Therapeutics Inc (NASDAQ:VERV), Beam Therapeutics Inc (NASDAQ:BEAM) and Ginkgo Bioworks Holdings Inc (NYSE:DNA).

“We are dedicated completely to disruptive innovation. Innovation solves problems,” she said.

 

You snooze, you lose

Like mining stocks, biotechs are in the ‘you snooze, you lose’ category. These stocks can double or triple in the blink of an eye.

Some say that biotech stocks trade on binary events, such as an announcement of a clinical breakthrough or an FDA approval.

It’s similar to how small mining explorers trade where share prices can jump X times on one discovery announcement.

But there are multiple ways to limit your risk when investing in biotechs stocks.

One way is to look for undervalued companies that have already produced positive early clinical trial data.

Another way is to look for those that are working on treatments for diseases that are prevalent, rather than one with a small addressable market.

One of the biggest biotech breakthroughs on the ASX in 2023 was that of of market darling, Neuren Pharma (ASX:NEU).

In March, Neuren announced that its North American partner Acadia Pharma has received a “historic” US FDA approval of DAYBUE (trofinetide) for the treatment of Rett syndrome. Neuren’s share price has more than tripled this year.

A more recent breakthrough came from  Zelira Therapeutics (ASX:ZLD), which nearly doubled this week after saying that its diabetic nerve pain drug works better than Pfizer’s drug.

 

ASX biotech winners in May

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Zelira Therapeutics (ASX:ZLD)
The best mover by far was Zelira, which almost tripled after announcing that its diabetic nerve pain drug outperforms multi-billion dollar Big Pharma drug, Lyrica – achieving a significant reduction in NRS pain scores, indicating a decrease in symptom severity.

ZLT-L-007 was found to be safe and well-tolerated, meeting the primary endpoint for safety with no Serious Adverse Events (SAE). The study also met its secondary endpoints, including significant decreases in Visual Analog Scale (VAS) and Short-form McGill scores, among others.

The company plans to evaluate the further progression of ZLT-L-007 into formal FDA clinical trials.

“The results align perfectly with our strategy of generating scientifically rigorous and clinically validated data for our patent-protected proprietary cannabinoid-based drugs,” CEO Dr Oludare Odumosu said.

Oneview Healthcare (ASX:ONE)

Oneview’s share price more than doubled in May.

Although the company said it had no idea why its share price has surged, the Australian Budget that was delivered on May 9 probably had a lot to do with it.

Of the $3.5 billion budget increase, $951.2 million will be allocated for digital health including telehealth, which positively impacts on Oneview as it has a platform that helps healthcare workers conduct tele-consulting.

Tissue Repair (ASX:TRP)

Wound healing specialist Tissue Repair announced that the US FDA has cleared the company to progress to a Phase 3 trial for its lead drug candidate, TR-987.

This comes after a meeting with the FDA, which was held following the conclusion of the Phase 2 trial.

During the meeting, the company reached broad agreement with the FDA on the core components of the proposed Phase 3 trial protocol.

TRP will now submit this protocol for final review by FDA and clearance for patient enrolment, with plans to commence enrolment before end of year. US and Australian sites have already been canvassed with some 15 sites approached.

Nova Eye Medical (ASX:EYE)

Nova Eye nabbed US FDA clearance in March for its updated iTrack surgical device to treat glaucoma, and now the company has officially launched the treatment in the USA.

Used by eye surgeons in globally, iTrack is a minimally invasive glaucoma surgery (MIGS), a consumable surgical device that restores the eye’s natural outflow pathway to lower pressure inside the eye and to eliminate patient reliance on anti-glaucoma medications for mild-moderate glaucoma.

The iTrack Advance is the new generation canaloplasty device for canal-based glaucoma surgery.

The first successful surgery was completed with iTrack Advance on 11 April and since then first surgeries have been conducted by several key opinion leaders.

 

At Stockhead we tell it like it is. While Nova Eye Medical is a Stockhead advertiser, it did not sponsor this article.

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