•  S&P/ASX 200 Health Care closed flat in May
  • 2024 brings challenges, but hopes are high for biotech stocks
  • We take a look at the ASX biotech winners for the month

 

The  S&P/ASX 200 Health Care [XHJ] closed flattish for the month of May.

With half the year almost over, 2024 is so far shaping up to be a year of both challenges and exciting opportunities.

As investors and industry experts chart their course through this dynamic landscape, one thing is clear: science remains at the forefront of it all.

Stephanie Sirota, chief business officer of RTW Investments, shares her perspective on what lies ahead for biotech stocks.

For Sirota and her team, the journey in discovering biotech stocks with potential begins with a deep dive into the science behind each company.

First and foremost, Sirota says that she aims to seek out medical innovations with the potential to make a real difference, focusing on long-term value rather than short-lived gains.

“I would say that our favourite investment is where we identify an asset that we believe is going to have a meaningful transformational effect, not just a short-term momentum-driven step up,” said Sirota.

“We’re looking for stocks where we can get multiples of return, because we’re identifying value before the rest of the market has identified that.

“We really look for drugs that we think are going to be placing and disrupting that current standard of care or bringing a new standard of care,” she added.

But navigating the market isn’t without its hurdles.

Funding can be hard to come by, especially during market downturns.

“..When you have a market downturn, the competition for capital is fierce,” Sirota said.

Her strategy? Steering clear of crowded areas and backing ventures poised to disrupt the status quo.

Yet, amidst the challenges, there’s reason for optimism.

Mergers and acquisitions in the biotech space are on the rise, signalling a new era of collaboration between biotech firms and industry giants.

“…At some point, the large companies, whether it’s big pharma or large biotech, they have the ability to sell a drug and to properly commercialise it and to take those approved therapies and bring them to global markets.

“A biotech company, particularly a small or even a mid-sized biotech company, doesn’t always have the capability of doing it on its own,” Sirota noted.

Meanwhile, the IPO market has seen a flurry of activity this year, albeit with a cautious approach from investors.

Companies are treading carefully, opting to go public only when they’re confident in their ability to deliver results.

But perhaps the most exciting development of all is the wave of positive clinical data sweeping through the industry.

Breakthroughs in research are fuelling optimism, and with the US FDA adopting a more favourable stance towards innovation, the path to regulatory approval has never looked more promising.

“Hopefully, with a wave of positive clinical data from biotech companies, and then also a stable or hopefully a lower interest rate environment, all that capital is going to come crashing back,” Sirota said.

 

Here are the ASX Biotech Winners and Losers for May 2024

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LTR Pharma (ASX:LTP)

LTR Pharma rose in May on no specific news.

However the company’s shares have been rising after announcing in late March that all patients recruited for its pivotal bio-equivalence clinical study of SPONTAN nasal spray received their second and final dose, completing the recruitment and dosing stage of the clinical study.

SPONTAN is a unique nasal delivery technology that bypasses the digestive system and is designed to overcome the issues of oral tablets for ED (erectile dysfunction).
The spray works by having a significantly faster onset of action of just 10 minutes.

The study is a critical milestone in LTR’s path to commercialisation. Data collected from the study will used to support the pre-submission meetings with the FDA and prescriptions of SPONTAN via the early access scheme in Australia.

 

BCAL Diagnostics (ASX:BDX)

BCAL recently announced some exciting news regarding its commercialisation efforts.

The company is gearing up to launch its new tests, and to make sure everything goes smoothly, it has brought on board a new CEO, Shane Ryan.

Ryan’s appointment comes at a pivotal time as the company prepares to launch its new tests and accelerate its commercialisation efforts.

With his prior experience as the COO and a strong track record in biotechnology product commercialisation, gained from his tenure at GenesisCare, BCAL believes that Ryan is well-positioned to lead BCAL through this critical phase.

 

Clarity Pharma (ASX:CU6)

Clarity has signed a Supply Agreement with SpectronRx for Cu-64 production.

This adds a new Cu-64 manufacturer to Clarity’s network, addressing supply constraints and benefiting patients, especially in the US oncology market.

Cu-64’s longer half-life overcomes limitations of other isotopes, providing broader access to PET imaging for cancer diagnosis.

 

Cynata Therapeutics(ASX: CYP)

Cynata has published new data in a top medical journal about its treatment, CYP-001, for a serious condition called steroid-resistant acute graft versus host disease (SR-aGvHD).

Graft versus host disease (GvHD) is a dangerous complication that can happen after bone marrow transplants, where the transplanted immune cells attack the recipient’s body. SR-aGvHD is even more challenging because it doesn’t respond to standard steroid treatment.

The published study followed patients for two years after receiving CYP-001 treatment.

The results are promising: 60% of patients survived, with no serious side effects related to the treatment. This survival rate is much better than what’s been seen before in similar cases.

For comparison, other treatments like ruxolitinib only had survival rates of around 38% after 18 months.

This is significant progress in treating a condition that has historically had very poor outcomes.

 

Dimerix (ASX:DXB) 

Dimerix says Taiba has acquired the exclusive rights to register and commercialise DMX-200 for the treatment of focal segmental glomerulosclerosis (FSGS) kidney disease in the United Arab Emirates (UAE), Saudi Arabia, Oman,  Kuwait,  Qatar,  Bahrain  and  Iraq.

Under the deal DXB will receive up to US$80.4m (~$120.5m) from Taiba in upfront and milestone payments on certain development and sales milestones being achieved.

The company will also receive tiered royalties starting at 30% on net sales.

Taiba also has a right to negotiate a licence to develop and commercialise DMX-200 in any additional indications in the licensed territories that DXB may achieve for DMX-200. The minimum term for the deal is 15 years, or until the last valid patent claim covering the product expires.

DXB retains all rights to commercialise DMX-200 in all other unlicensed territories, including the US and China.

 

At Stockhead we tell it like it is. While Dimerix and LTR Pharma are Stockhead advertisers, they did not sponsor this article.