Brain cancer fighter Patrys is a 10-bagger – which of these noggin-focused stocks will be next?
Brain cancer fighter Patrys has been one of the best performing small caps over the past year, rising from 0.5c to more than 5c since September.
Which will be the next noggin-focused ASX stock to take off? Here are a few to consider.
There are more than 160 biotech and health-focused stocks on the ASX including at least 14 that are working on improving or fixing our grey matter (see below).
That includes everything from fighting brain cancer to slowing and solving dementia and Parkinson’s and diseases of the central nervous system and traumatic brain injury.
Over the past year, the ASX’s top performing brainiac has been Patrys (ASX:PAB) — up 1060 per cent. Its drug candidate PAT‐DX1 is being tested to target and kill tumour cells in range of cancers, including brain cancer.
>> Scroll down for a list of ASX stocks fighting brain diseases — and their 12-month performance
Brain injury fighter Neuren Pharmaceuticals (ASX:NEU) is working on a treatment for traumatic brain injuries and the rare nervous system disorder Rett syndrome.
Its treatment involves a synthetic peptide which mimics a naturally occurring molecule in the brain to help correct cognitive functioning.
Neuren’s share price is up by more than 90 per cent over the past 12 months to $2.88.
In mid-June, the company told shareholders at its annual meeting that phase 3 of its treatment trial for Rett syndrome would commence shortly, using the same product the company intends to take to market once approved.
(Clinical trials are generally divided into three phases. Phase 1 focuses on safety, Phase 2 tests for effectiveness and Phase 3 examines whether the new drug is an improvement on existing treatment.)
Cannabis play Zelda Pharmaceuticals (ASX:ZLD) is up by more than 20 per cent over the past year. This month Zelda said it was testing the effects of its cannabinoid-based treatment on paediatric brain cancer.
On the disease management side, app solution PainChek (ASX:PCK) has gained close to 140 per cent over the past year as it rolls out its pain monitoring software for patients with moderate dementia.
In the March quarter, the company still hadn’t received revenue from customers, but the business confirmed it was rolling out its technology nationally with users in a pilot project with Dementia Support Australia.
Those working on drug therapies to treat diseases like Parkinson’s and Alzheimer’s tned to be in the early stages of testing.
Alzheimer’s drug developer Actinogen (ASX:ACW) is recently raised $15 million to advance testing of its lead drug Xanamem to treat dementia due to Alzheimer’s disease. Its Phase 2 study recently got the all-clear from the Data Safety and Monitoring Board to continue without modification.
Meanwhile Prana Biotechnology (ASX:PBT) this month begun recruiting for Phase 1 clinical trials for its lead drug candidate PBT434 to treat neurodegenerative diseases such as Parkinson’s.
One perhaps unexpected player with an interest in multiple sclerosis treatments is Queensland Bauxite (ASX:QBL), whose subsidiary Medical Cannabis Ltd entered an agreement in February to research medical cannabis treatment of MS. Queensland Bauxite’s share price is up 233 per cent, to 4c, over the past year.
Meanwhile, Living Cell Technologies (ASX:LCT) updated the market on its testing of its NTCell for Parkinson’s disease. Its treatment, which includes cells sourced from a unique herd of pigs in the Auckland Islands, promotes healthy cell growth and functioning in sites where the brain is damaged.
After one year of collecting data, the company says its treatment has reduced trial patient’s ranking on the Parkinson’s Disease Rating Scale and has been found to have no safety concerns.
However, the Living Cell share price has slid 81 per cent over the past six months, to 2c.
Emotional connection drives innovation
There was plenty of hype around the biotech sector in February and March, says Canary Capital’s Martin Duriska, but some of the top performers have since come off the boil.
“Quite a lot were running up and peaked around that April time, and a cool-off is what we’ve been seeing in the past few months,” Mr Duriska told Stockhead.
However, there are still buying opportunities out there, with Mr Duriska saying the key to any biotech opportunity is to “get in early”, because most are long-term plays.
Emotion has a role to play in the interest in many of these stocks, particularly in the Alzheimer’s and cancer-fighting spaces, he says.
“Everyone knows someone who is elderly — there is always an emotional attachment to these drugs.”
When it comes to reading up on biotechs, Mr Duriska says investors should think about the big picture: including the market for a treatment once it gets approved, whether the business has money to get through clinical trials, and how much management are getting paid.
“You absolutely want management to be at the forefront, and you don’t want a company where they’re basically giving themselves a luxury holiday. Salaries need to be reflective of the position of the company,” he said.
When it comes to Australia’s place among the world’s biotech producers, experts have recently placed Australia among the top — in large part because of the government’s commitment to the space.
In 2018 Australia took out fifth spot in the Scientific American Worldview global biotech rankings, with the nation’s scorecard lifting into one of the top spots in part because of the federal government’s support of the biotech sector.
One of the reasons for this was Prime Minister Malcolm Turnbull’s 2016 announcement of a $250 million biomedical translation fund.
Here is the share price performance of 10 ASX-listed companies fighting brain and central nervous system diseases:
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
Patrys and Actinogen are Stockhead advertisers.