• Some experts say the biotech market is over-saturated, which has led to its downfall in the past 24 months
  • But another expert says smaller, ‘obscure’ biotechs should not be dismissed
  • Stockhead lists the best and worst performing ASX biotech stocks over the past week and month

The healthcare sector has been in a year-long form slump. In the past six months alone, the S&P/ASX 200 Health Care [XHJ] is down by 12%.

In the US, one in five listed biotech companies are trading for less than the value of their cash. In other words, the market is placing zero value on the actual business.

So what’s going on with biotech stocks?

According to head of biotech research at Mizuho Securities, Salim Syed, the sector got too frothy too quickly during the height of the pandemic.

“Biotech was seen as the solution to the pandemic and the problems we were seeing in the market at the time,” Syed told CNBC.

“What happened was that biotech companies essentially ended up getting funded very easily, and they were converting over to public markets too easily.”

“And what we’re seeing right now is a reversal of that,” Syed said.

He added that many of the biotechs which converted from private to public in the past two years have disappointed, and are yet to provide any viable clinical data results.

Too saturated

So is this a knee-jerk reaction, and is there a risk that good biotech stocks are getting dumped as part of  a wider market selloff ?

“Yes we are going through that process of trying to figure out which stocks are of higher quality and deserve investor capital, and which deserve to be weeded out,” Syed said.

“Right now, we probably have about 800 or so biotechs publicly traded (in the US), which if we only go back three years ago, it was only about half of that.”

Asset manager Oppenheimer’s healthcare analyst Jarred Holz agreed, telling CNBC there will be “self corrections” ahead.

“There are 500 or more companies with an enterprise value of $100 million or less, and that’s close to 60 per cent of this entire category,” Holz said.

Many believe that some of these names might get locked out of the capital markets, and sooner or later they will no longer cease to operate.

“You could almost define those companies as either non-investable or non-viable, depending on where their programs are,” said Holz, adding that the sector almost needs to go through this self-cleansing process in order to redefine itself.

“They have to move on from either the program they were starting with, or move on from being a company at all.”

Why biotechs could still be a good investment

Nicolas Rabener of Factor Research, however, argues that partnerships with pharmaceutical giants are making make some of those smaller biotechs look more obscure than they really are.

“The obscurity of biotech companies is partially explained by many of those having distribution agreements with the large pharmaceutical companies, which puts their own brands into the background,” Raebner said.

“Furthermore, the biotech sector acts as an incubator for the pharmaceutical industry where startups with attractive drugs in development are often acquired, thus ceasing to exist as publicly traded stock,” he added.

Raebner believes that over the long run, biotechnology will always play a part and have a large impact on our lives.

“The potential is there and has always been, but it just has not been a great bet for investors so far,” added Rabener.

Best and worst performing ASX biotechs

CODE COMPANY PRICE 1 WEEK RETURN % 1 MONTH RETURN % 1 YEAR RETURN % MARKET CAP
CDX Cardiex Limited 0.44 57% 28% -46% $46,730,322.50
ALT Analytica Limited 0.0015 50% 50% -50% $6,920,701.69
HXL Hexima 0.35 25% 17% 112% $55,908,562.85
LCT Living Cell Tech. 0.0075 25% 25% -35% $10,282,909.78
ATX Amplia Therapeutics 0.135 23% 13% -43% $25,201,020.13
DXB Dimerix Ltd 0.175 21% 35% -29% $51,339,786.56
HCT Holista CollTech Ltd 0.03 20% -9% -51% $7,985,123.52
PTX Prescient Ltd 0.2 18% 60% 21% $143,888,040.78
1ST 1St Group Ltd 0.009 13% 0% -57% $4,987,384.27
RGS Regeneus Ltd 0.048 12% -4% -44% $14,708,971.87
NTI Neurotech Intl 0.065 10% 27% 20% $45,350,443.19
OCC Orthocell Limited 0.395 8% 3% -31% $78,851,165.20
BXN Bioxyne Ltd 0.014 8% -22% -26% $11,522,617.16
ATH Alterity Therap Ltd 0.017 6% -6% -39% $40,916,867.83
VLS Vita Life Sciences.. 1.985 6% -1% 68% $105,478,159.82
RSH Respiri Limited 0.039 5% -13% -56% $28,879,861.15
IMC Immuron Limited 0.105 5% 0% -34% $22,779,834.60
EYE Nova EYE Medical Ltd 0.22 5% -12% -28% $30,571,756.11
CBL Control Bionics 0.23 5% -23% -58% $11,827,762.91
S66 Star Combo 0.165 3% -13% -30% $22,192,991.87
TRU Truscreen 0.051 2% -19% -28% $18,506,178.90
PYC PYC Therapeutics 0.0825 2% 2% -55% $257,655,014.34
M7T Mach7 Tech Limited 0.625 2% 2% -42% $152,848,670.72
AHC Austco Healthcare 0.096 1% -13% -4% $27,560,224.22
AMT Allegra Orthopaedics 0.18 0% 0% -28% $18,802,656.54
TSN The Sust Nutri Grp 0.14 0% -10% -68% $16,884,893.90
SCU Stemcell United Ltd 0.014 0% 0% -18% $14,696,980.89
JTL Jayex Technology Ltd 0.007 0% -39% -77% $1,744,599.77
ICS ICSGlobal Limited 0.575313 0% 0% 1% $6,054,604.94
FFC Farmaforce Ltd 0.035 0% 0% -50% $4,573,834.30
PAA Pharmaust Limited 0.087 0% 0% -11% $27,254,464.94
MX1 Micro-X Limited 0.16 0% -14% -52% $71,525,411.23
MEM Memphasys Ltd 0.043 0% -25% -32% $34,063,668.49
LBT LBT Innovations 0.085 0% 1% 4% $26,231,926.61
TD1 Tali Digital Limited 0.007 0% -13% -79% $8,573,541.66
OIL Optiscan Imaging 0.135 0% -4% -56% $86,716,784.28
GLH Global Health Ltd 0.29 0% 18% -63% $16,428,432.43
NOX Noxopharm Limited 0.28 0% -3% -58% $87,671,385.00
EPN Epsilon Healthcare 0.034 0% 10% -79% $8,172,036.27
DVL Dorsavi Ltd 0.015 0% -25% -50% $5,662,100.56
BPH BPH Energy Ltd 0.018 0% -51% -79% $11,969,068.52
PAL Palla Pharma Ltd 0.295 0% 0% -26% $47,764,383.09
RAP Resapp Health Ltd 0.11 0% -4% 116% $94,511,678.47
OSP Osprey Med Inc 0.2 0% 0% -88% $5,131,708.40
PXS Pharmaxis Ltd 0.082 -1% -9% 3% $44,470,714.20
SDI SDI Limited 0.77 -1% -6% -15% $95,092,424.00
CTE Cryosite Limited 0.68 -1% 11% 89% $33,190,502.84
HGV Hygrovest Limited 0.064 -2% 5% -25% $14,717,055.04
CU6 Clarity Pharma 0.48 -2% 7% 0% $82,735,262.36
PAB Patrys Limited 0.022 -2% 0% -26% $43,196,994.90
CAN Cann Group Ltd 0.3125 -2% -5% -25% $109,973,910.38
RHT Resonance Health 0.081 -2% -23% -57% $35,946,454.52
AT1 Atomo Diagnostics 0.077 -3% -27% -55% $42,816,824.33
PIQ Proteomics Int Lab 0.96 -3% -5% -9% $101,477,640.00
NEU Neuren Pharmaceut. 3.78 -3% 1% 191% $486,227,509.36
CGS Cogstate Ltd 1.675 -3% -13% 81% $286,002,746.70
1AD Adalta Limited 0.0515 -3% -18% -65% $16,337,606.79
PBP Probiotec Limited 2.27 -3% 2% 14% $184,604,131.62
NYR Nyrada Inc. 0.16 -3% -9% -50% $22,621,261.50
BDX Bcaldiagnostics 0.093 -3% 3% 0% $12,681,092.16
IDT IDT Australia Ltd 0.15 -3% 7% -50% $34,948,160.57
SOM SomnoMed Limited 1.45 -3% -15% -42% $118,345,820.45
TRP Tissue Repair 0.27 -4% -16% 0% $12,396,794.08
ALC Alcidion Group Ltd 0.135 -4% -16% -68% $171,189,322.16
RHY Rhythm Biosciences 1.205 -4% -6% 23% $250,475,252.04
NSB Neuroscientific 0.225 -4% -2% -26% $34,433,194.32
ARX Aroa Biosurgery 0.75 -4% -12% -34% $250,188,671.84
CPH Creso Pharma Ltd 0.0505 -5% -10% -68% $64,814,625.10
PGC Paragon Care Limited 0.3 -5% -21% 3% $193,280,481.30
ANP Antisense Therapeut. 0.1 -5% -9% -53% $73,567,337.58
NC6 Nanollose Limited 0.0865 -5% -7% -7% $12,953,114.02
CYP Cynata Therapeutics 0.38 -5% 0% -34% $54,445,105.72
VBS Vectus Biosystems 1.09 -5% -15% 18% $39,350,237.15
MDC Medlab Clinical Ltd 0.072 -5% -28% -63% $24,636,648.31
AVE Avecho Biotech Ltd 0.016 -6% -27% -11% $29,405,000.42
PSQ Pacific Smiles Grp 1.46 -6% -28% -46% $227,404,261.65
NXS Next Science Limited 0.73 -6% -18% -61% $158,944,699.16
SHG Singular Health 0.14 -7% -22% -57% $9,140,469.66
PNV Polynovo Limited 1.1525 -7% 28% -56% $737,782,169.06
MVP Medical Developments 2.45 -7% -25% -48% $181,827,895.35
MVF Monash IVF Group Ltd 1.02 -7% -16% 17% $405,220,233.60
GSS Genetic Signatures 1.155 -7% -13% -5% $166,327,755.36
PAR Paradigm Bio. 1.15 -7% 3% -46% $259,459,206.30
IRX Inhalerx Limited 0.075 -7% -13% -21% $12,635,021.78
OSL Oncosil Medical 0.049 -8% -6% -20% $42,744,821.41
CMP Compumedics Limited 0.18 -8% -25% -51% $31,889,330.64
IPD Impedimed Limited 0.078 -8% -29% -35% $142,230,378.80
RNO Rhinomed Ltd 0.16 -9% -11% 7% $45,715,151.04
AN1 Anagenics Limited 0.032 -9% -14% -52% $7,293,703.00
CHM Chimeric Therapeutic 0.105 -9% -13% -64% $32,025,223.55
KZA Kazia Therapeutics 0.73 -9% -8% -42% $101,773,550.16
IVX Invion Ltd 0.01 -9% -23% -38% $64,165,136.44
IIQ Inoviq Ltd 0.5 -9% -13% -74% $46,009,351.00
BNO Bionomics Limited 0.058 -9% -11% -69% $83,907,746.13
ZLD Zelira Therapeutics 1.13 -10% -12% -87% $10,534,827.60
IBX Imagion Biosys Ltd 0.037 -10% -16% -68% $40,363,867.22
BWX BWX Limited 1.245 -10% -8% -76% $199,318,998.97
IHL Incannex Healthcare 0.365 -10% -4% 33% $460,440,835.56
ADR Adherium Ltd 0.009 -10% 0% -50% $17,666,008.74
MXC Mgc Pharmaceuticals 0.018 -10% -22% -62% $54,565,877.04
ACW Actinogen Medical 0.063 -10% -10% -59% $118,512,491.92
RAD Radiopharm 0.175 -10% -15% 0% $20,784,168.13
RAD Radiopharm 0.175 -10% -15% 0% $20,784,168.13
ADO Anteotech Ltd 0.094 -10% -10% -65% $184,839,806.59
PCK Painchek Ltd 0.033 -11% -15% -51% $39,613,167.97
UBI Universal Biosensors 0.41 -11% -23% -38% $85,796,996.18
CYC Cyclopharm Limited 1.15 -12% -16% -59% $107,381,046.45
4DX 4Dmedical Limited 0.57 -12% -8% -55% $114,925,669.65
ILA Island Pharma 0.15 -12% -12% -58% $6,486,949.20
VTI Vision Tech Inc 0.3 -12% -29% -77% $7,209,168.00
TLX Telix Pharmaceutical 4.11 -12% -3% -11% $1,289,573,502.00
BIT Biotron Limited 0.074 -12% -23% 45% $51,943,020.76
OPT Opthea Limited 1.2 -12% 18% -18% $427,865,338.53
MDR Medadvisor Limited 0.18 -12% -14% -40% $66,638,239.33
BOT Botanix Pharma Ltd 0.068 -13% -16% 0% $68,119,945.18
ZNO Zoono Group Ltd 0.17 -13% -17% -77% $29,122,048.38
OVN Oventus Medical Ltd 0.02 -13% 0% -83% $4,834,530.70
IMM Immutep Ltd 0.365 -13% 4% -44% $311,846,333.40
ACR Acrux Limited 0.063 -14% -26% -55% $19,360,046.01
EZZ EZZ Life Science 0.31 -14% -11% -29% $3,955,600.00
AC8 Auscann Grp Hlgs Ltd 0.049 -14% -22% -57% $19,824,619.95
MEB Medibio Limited 0.003 -14% -14% -60% $7,190,970.37
GTG Genetic Technologies 0.003 -14% -25% -63% $27,701,895.43
ALA Arovella Therapeutic 0.03 -14% -21% -29% $20,095,056.78
CAJ Capitol Health 0.29 -15% -8% -18% $312,665,253.60
OSX Osteopore Limited 0.145 -15% -19% -67% $16,417,553.32
ONE Oneview Healthcare 0.18 -16% -31% -55% $95,931,658.06
IMU Imugene Limited 0.1625 -17% -10% -56% $965,051,625.12
DOC Doctor Care Anywhere 0.175 -17% -20% -81% $39,763,519.25
AGH Althea Group 0.095 -17% -30% -72% $31,284,483.02
RAC Race Oncology Ltd 1.7 -20% -17% -55% $261,612,442.48
ICR Intelicare Holdings 0.05 -21% -44% -78% $6,264,247.96
RCE Recce Pharmaceutical 0.615 -21% -24% -44% $110,208,679.56
AHK Ark Mines Limited 0.235 -22% -40% 591% $7,827,874.21
VHT Volpara Health Tech 0.59 -22% -27% -52% $156,199,750.22
EXL Elixinol Wellness 0.031 -30% -28% -78% $10,120,498.27
LDX Lumos Diagnostics 0.15 -35% -50% 0% $36,018,207.61

Amplia Therapeutics (ASX:ATX)

New data shows that Amplia’s lead asset, AMP945, demonstrates similar efficacy to a current standard of care, OFEV, in a model of idiopathic pulmonary fibrosis (IPF).

AMP945 is an investigational focal adhesion kinase (FAK) inhibitor currently being developed by Amplia.

Current pharmaceutical standards of care for IPF are either OFEV or Esbriet, but these drugs have significant side effect profiles which limit their utility. There is considerable effort underway in the market to find more tolerable and effective treatments for IPF, which is a debilitating and deadly disease.

Amplia’s preclinical studies show that in the bleomycin mouse model of IPF, AMP945 had comparable activity to OFEV, the current market leader.

Dimerix (ASX:DXB) 

Dimerix  has entered into an agreement with The Australian Centre for Accelerating Diabetes Innovations (ACADI).

The key agreement will progress its lead drug asset DMX-200 into a new clinical trial in patients with diabetic kidney disease.

The trial will provide another potential market opportunity for Dimerix in addition to its other Phase 3 trials into inflammatory diseases.

Prescient Therapeutics (ASX:PTX)

Prescient has this week unveiled its high-performance cell therapy manufacturing enhancement technology, named CellPryme-M.

CellPryme-M is a platform technology that produces superior cells during the cell manufacturing process.

These cells are less prone to exhaustion, enabling longer duration of cancer killing activity, and are capable of improved tumour trafficking and penetrance compared to the current generation of CAR-T cells.

Prescient says it plans to use CellPryme-M to enhance the cells used in its OmniCAR programs.

Additionally, Prescient will seek to license CellPryme-M to other cell therapy companies to enhance conventional CAR-T programs, and enter into collaborations with external parties.

Orthocell (ASX:OCC)

Orthocell reported that the final data read-out of patients in its nerve reconstruction trial using Remplir was encouraging.

The regenerative medicine company said results demonstrated early recovery of muscle function in paralysed upper limbs, with continued improvement seen at the 12-month and 24-month checkpoints.

Follow-up data at 12 months showed that 76% (25 of 33) of nerve reconstructions resulted in functional recovery of muscles controlled by the reconstructed nerve.

And data at 24-month post treatment showed that 85% (23 of 27) of nerve reconstructions resulted in functional recovery of target muscles closest to the reconstruction site.

Alterity Therapeutics (ASX:ATH)

Neurodegenerative diseases specialist Alterity is set to launch a Phase 2 clinical trial of its lead drug, ATH43.

ATH43 treats patients with Multiple System Atrophy (MSA), a rare neurodegenerative disease similar to Parkinson’s disease.

Patients with MSA show symptoms of uncoordinated or clumsy movements that contribute to falling.

ATH43 is designed to reduce the toxic accumulation of α-synuclein, a pathological hallmark of MSA, and to preserve nerve cells by restoring normal iron balance in the brain.

The Phase 2 clinical trial is a randomised, double-blind, placebo-controlled investigation of ATH434 in patients with early-stage MSA.

The study is expected to enrol approximately 60 adult patients to receive one of two doses of ATH434 or placebo, which they will receive for the next 12 months.

 

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