Check Up: These biotech themes got billions in VC funding. These ASX stocks could benefit
Health & Biotech
Health & Biotech
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Research by McKinsey showed that from 2019 to 2021, venture capitalists (VC) ploughed US$35 billion into biotech companies.
Funding peaked in the first quarter of 2021, before the gradual decline that we’ve seen until today.
The exuberance of these VCs gives a signal that they see potential breakthroughs from the current crop of biotechs.
So what potential discoveries are the VCs investing in?
According to McKinsey, VCs appear to focus on emerging technologies that can tailor treatments to individual patients, and deliver them to the target site with great accuracy.
The following platforms in particular are generating significant investor excitement:
Cell therapy focuses on diseased tissues or cells that could in turn address a wider range of diseases.
Since the first chimeric antigen receptor (CAR) T-cell therapy was approved in 2017, they have revolutionised the treatment of hematologic malignancies, achieving unprecedented efficacy.
New cell therapy techniques have the potential to address diseases with significant unmet needs such as solid tumours, which represent more than 90 per cent of adult cancers, as well as non-oncological conditions.
Some significant challenges however still remain in CAR T-cell therapy that could hinder broader use.
This includes the inflammatory cytokine release syndrome that sometimes produces side effects from flu-like symptoms to organ failure, and sometimes death.
On the ASX, biotechs that have CAR T-cell programs include:
Gene therapies have recently transformed patient treatment, offering positive outcomes for genetic disorders.
According to the McKinsey analysis, gene therapies could comprise around 20% of new product launches by 2025.
The field continues to evolve, with several biotech start-ups developing new RNA-editing tools.
Obstacles to gene therapy remain, including safety concerns of inflicting permanent DNA damage, mutagenic effects, and even cell death.
On the ASX, biotechs that have gene therapy programs include:
Precision medicine is an approach to maximise therapeutics’ effectiveness by using diagnostics devices and technology.
Advances in the ability to process enormous amounts of data combined with artificial intelligence (AI) have allowed the field to explode in recent times.
While existing diagnostics search for a few known mutations, advanced diagnostics tools can scan millions of circulating biomarkers to detect early signs of disease.
Current limits to broader use include the difficulty in translating complex genetic data into actionable clinical-care decisions.
On the ASX, biotechs that are in the precision medicine segment include:
There has been rapid advances in machine learning and AI that promise to accelerate drug discovery.
Machine learning allows drug development through computer-modeled simulations that predict molecular behaviour.
The technology is being increasingly used for phenotypic screening and genetic-profiling that can identify new genetic variants.
According to McKinsey however, challenges still remain including an insufficient number of high-quality data sets and uninterpretable algorithms.
On the ASX, biotechs that are using machine learning (not necessarily to discover new drugs per se) include:
Drug delivery technology has seen significant advances as more therapies rely on new robust vehicles to target disease-specific cells.
The recent discovery of lipid nanoparticles used in mRNA-based COVID-19 vaccines are one of the most promising of such vehicles.
McKinsey believes that drug delivery is one of the biggest challenges for novel drugs, and significant scientific advances will be necessary to realise their full potential.
On the ASX, biotechs that focus on drug delivery technologies include:
The company was up over 70% in the past week, continuing its meteoric rise of recent times as it continues to grow its presence in vital overseas markets.
Osteopore announced recently that it was collaborating with Singapore-based Livingstone Health to jointly develop new products for regenerating bone and tissue.
The two companies will co-develop products that improve healing in the musculoskeletal segment, with two upcoming surgeries that will see Osteopore implants being used for orthopaedic applications for the first time in Singapore.
The cannabis company surged this week after being granted a GMP (good manufacturing practice) licence to manufacture therapeutic goods at its Mildura facility.
The Mildura GMP Licence will enable Cann to manufacture Active Pharmaceutical Ingredients (API) and hard capsules, and to conduct GMP-approved activities at the facility’s existing chemistry and microbiology laboratories.
It will also allow the production of capsules for Satipharm, the company acquired by Cann in 2021.
The medical equipment manufacturer reported record revenues for the half year to 30 June (unaudited).
CYC says unaudited group sales revenue is expected to be approximately $11.3 million, an increase of approximately 36% compared to pcp.
It’s also 74% higher than pre-COVID revenues recorded in the first half of 2019.
Revenues were predominantly generated from its Technegas device, and recurring revenues from consumables.
Following its extension contract with New Zealand Rugby a couple of weeks ago, HitIQ has this week secured a deal with Shock Doctor, arguably the world’s pioneer in sports performance mouthguards based in the US.
The collaboration will see the development of an off-the-shelf, self-fit mouldable mouthguard embedded with HitIQ impact sensor technology.
It’s also set to expand HIQ’s traction in consumer markets on the back of Shock Doctor’s access to over 20,000 retail locations, as well as international markets.
The clinical stage oncology company was granted a US patent for its OmniCAR portfolio titled: “SpyCatcher and SpyTag: Universal Immune Receptor For T Cells”.
OmniCAR is a universal immune receptor (UIR) platform that creates modular cell therapies which according to Prescient are controllable, flexible and adaptable.
The key component of the system enabling modularity is a two-part covalent binding system called SpyTag and SpyCatcher, developed by and licensed from Oxford University.
At Stockhead we tell it like it is. While Osteopore is a Stockhead advertiser, it did not sponsor this article.