Health Check: Yippee! Biotechs join broader rally after Trump tariff turnaround

• Nova Eye and Syntara led today’s biotech relief rally, after the sector sunk on Wednesday on the back of a flagged US pharmaceutical tariff
• Flu vaccines don’t give you autism, but do they work?
• Recce is raising up to $15.8 million to fund its superbug fight

As they say, a week is a long time in politics and Donald Trump’s bellicose Liberation Day words on tariffs now seem like a mealy-mouthed positioning statement.

Introducing a 90-day PAUSE (his emphasis) on over-the-odds tariffs on every country except for China, Trump said that bond markets had got a bit “yippy”.

The share market carnage must have gone not unnoticed, too.

While the whole tariff thang looks open for negotiation, investors must question whether Trump’s threatened special pharmaceuticals tariff will eventuate.

Reports of the impost sent the biotech sector into a lather yesterday, led by Actinogen Medical’s (ASX:ACW) 10% sell off and Mesoblast’s (ASX:MSB) and PolyNovo’s (ASX:PNV) 8 per cent plus decline.

Shares in CSL (ASX:CSL) – the most likely victim of a tariff – lost 5%.

With their frowns turned upside down, investors today pushed a slew of stocks up by more than double digits.

Leading the charge, Nova Eye Medical (ASX:EYE) shares soared more than 30%, while Syntara (ASX:SNT) shares were 16% to the good.

PolyNovo, Clarity Pharmaceuticals (ASX:CU6), Medical Developments International (ASX:MVP), Avita Medical (ASX:AVH) and Actinogen all zoomed up around 12%.

CSL shares recovered more than 5% – so as we were!

Flu vaccine headwinds are nothing to sneeze at

Or not so fast …

Aside from any potential tariff impact, CSL faces another potential headwind with flu vaccines.

We’re not talking about RFK Jr’s anti-vaxx dogma, but a large study in Ohio which found the jab was ineffective during the winter months.

As UBS reports, the study covered 53,000 adult healthcare workers in Ohio.

The study, which has not yet been peer reviewed, concludes that vaccinated working-age adults were more likely to test positive for the flu.

This possibly is because they are less cautious about interacting with others.

“The conclusion is not that ‘the flu vaccine gives you flu’, but it does seem that it was ineffective last season,” UBS says.

A bad flu season normally leads to a vaccine uptake, but not if folk think they don’t work.

“Efficacy is expected to vary from season to season but even if this result can be explained away, we think it reads negatively for investor confidence in 2025-26 flu vaccine uptake,” UBS says.

The problem is not entirely new, in that CSL’s December half results were dragged down by the performance of its flu arm CSL Seqirus.

The division reported a 9% revenue decline to $1.66 billion.

Seqirus accounted for just under 20% of CSL’s total revenue.

The company noted that “low immunisation rates significantly impacted the US influenza vaccine market”.

UBS still rates CSL a buy on valuation grounds, but expects no growth in vaccine sales.

Recce passes the hat for $15.8 million

Synthetic antibiotic developer Recce Pharmaceuticals has raised $5 million in a private placement and is on the hunt for $10.8 million more in a rights issue.

The funds will support Recce’s registrational phase III trial for diabetic foot infections, which Recce is carrying out in Indonesia because of the archipelago’s high incidence of diabetes.

Diabetic foot infections are a subset of acute bacterial skin and skin structure infections – ABSSSIs – the subject of Recce’s successful Australian phase II trial.

The company also plans to launch a local phase III ABSSSI trial.

In February the company reported that 25 out of 29 patients (86%) in the phase II effort had a “successful clinical response” after seven days, “across a variety of complicated skin structure infections.”

After 14 days, 27 of them (93%) met the primary efficacy endpoint.

The placement and the one-for-six rights issue is priced at 28 cents, a 13.8% discount to the last traded price of 32.5 cents on April 9.

Recce’s lead drug candidate R327 is not a Star Wars robot, but a synthetic, broad-spectrum antibiotic that the company hopes is effective against stubborn superbugs.

Tryptamine launches binge-eating psychedelic drug trial …

 Tryptamine Therapeutics (ASX:TYP) has launched the world’s first trial to test the impact of psilocin – the active ingredient in magic mushrooms – on binge-eating disorder (BED) patients.

Melbourne’s Swinburne University of Technology will host the 12-patient open-label study, by which participants are administered the company’s drug TRP-8803  (intravenously infused psilocin).

The patients will also receive psychotherapy.

The planned trial follows a success phase 2a trial carried out at University of Florida. This study showed that orally administered TRP-8802 reduced BED episodes by more than 80%.

The most common eating disorder in the US, BED is associated with depression, anxiety, sleep disorders, post-traumatic stress disorder and even suicide.

Tryptamine also has psilocin-based clinical stage programs for fibromyalgia and irritable bowel syndrome.

… as cashed-up PYC launched genetic disorder trial

PYC Therapeutics (ASX:PYC) says it has enrolled its first of eight healthy patients in its phase 1a dosing trial to treat polycystic kidney disease (PKD), the world’s most prevalent single-gene disorder.

PYC’s drug candidate PYC-003 tackles the underlying cause of the disease, caused by mutations of the PKD1 gene 2.

The company says PYC-003 has a potential “high velocity” path to approval, by way of a single combined registrational phase 2/3 study.

PYC has two other clinical-stage programs, the most advanced being a phase 1/2 trial for the less common retinitis pigmentosa type two.

The trial news is an antidote to yesterday’s tidings that PYC was chasing up $13 million from one of the underwriters of its recent $146 million rights offer.

The underwriter advised the company of a “liquidity issue” and requested a payment extension to April 30.

PYC is seeking “payment guarantees and a bond to offset against any potential failure to complete by the underwriter.”

The $133 million in the bank takes the company’s cash balance to more than $200 million.

Respiri breathes easy on tariffs

In its tariff update yesterday, Respiri (ASX:RSH) takes a rosy ‘big picture’ view of US healthcare policy under RFK Jr.

Purveyor of the Wheezo respiratory monitoring device, Respiri notes RFK Jr’s interest in the “transformative potential” of AI, telehealth and virtual care platforms in serving rural and underserved communities.

Wheezo plays in this space with its remote patient monitoring capabilities.

Respiri chief Marjan Mikel says RFK’s comments “highlight a sea change in US healthcare, one where virtual care is no longer a ‘nice-to-have’ but a national priority”.

Ah – but what about tariffs?

Respiri quantifies the impact of the China tariff at  $US30 ($A50) per device – which is admirably precise.

We’re not sure whether this is based on Trump’s 54% punitive China tariff, or his revised ‘open to negotiation’ 125% slug for the Middle Kingdom’s impudent retaliation.

In any event, the company says it can absorb the impost and already has a two-year stockpile of the devices on US shores.

Meanwhile, fellow device maker ImpediMed (ASX:IPD) says a “substantial number of components” for its Sozo lymphodema measuring machines are made in the US.

The company also has “sufficient inventory” of US stock.

At Stockhead, we tell it as it is. While Recce and Tryptamine are Stockhead advertisers, they did not sponsor this article.