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Biotechs have been all the rage as canny investors made a bunch of money from Biotron, BARD1 and Memphasys — and speculation is rife as to who’s next.

In recent weeks HIV researcher Bitron spiked more than 2000 per cent, cancer fighter BARD1 put on 450 per cent and IVF developer Memphasys jumped 260 per cent.

Investor forums are full of predictions about which stock will go off next — but what’s needed is a near-term catalyst to take advantage of euphoria in the sector, says Canary Capital advisor Martin Duriska.

Investors should look for topical news, such as trial results by companies in big sectors like cancer or Alzheimer’s, Mr Duriska says.

“As a general thing, you need to have quite a low market cap, a fairly nice cash balance, good management, a decent top 20 who hold 50 per cent or greater, for these to be really good runners, he said.

“If it’s got several billion shares on issue, the top 20 holds 20 per cent and there’s no cash, then it’s not going to go anywhere because it’ll come under price pressure as people take profits.”

Mr Duriska says we may see another wave of biotech enthusiasm in early November and it could spill over into the usually-quiet December period.

“We need something to spark the interest again especially in the spec end which has been battered in the last six to eight months.”

Biotron hits 20-bagger status then plunges into the red as profit-takers exit

What goes up…

The professionals warn that just as things go up, they also have a tendency to come down just as quickly — as happened to Biotron (ASX:BIT) last week and BARD1 on Wednesday.

Cannacord senior analyst Matthijs Smith says it’s likely Biotron will come back to earth “pretty quick” because although the data is promising it’s still very early days.

“The momentum behind the price action is all retail,” he said. “These blips happen over and over again.”

Biotron made its name with a phase 2 trial that showed its drug had an effect on HIV — while throwing around the word “cure”.

Sperm separator Memphasys (ASX:MEM) received some of the backwash from that enthusiasm, as investors suddenly noticed they had a deal — announced a month earlier — with Monash IVF and then a deal with a Swedish fertility outfit.

Bard1 (ASX:BD1) shares shot up 450 per cent this week after it said it was adapting an ovarian cancer test to breast cancer.

What people are watching

There are a series of companies that investors in the online gossip forums have been pitching as ‘the next in biotech’ and have seen their share prices pop, so we put them to Mr Duriska.

Doggy cancer pill maker PharmAust (ASX:PAA) has been popular for months and he “has a feeling” they’re relatively cheap.

They shot up 444 per cent in a day after achieving better than expected results that will form the basis of human trials.

Telix (ASX:TLX) has been “flying under the radar”. Mr Duriska says they’ve never received much hype and are going about their business “very methodically”.

They bounced 36 per cent after releasing a rash of information about kidney imaging partnerships, data, and the start of kidney and brain cancer clinical trials.

Cancer fighter Bard1 jumps more than 450pc before falling back to earth

Patrys (ASX:PAB) has not felt a price pop but the brain cancer curer is another perennial favourite of investors. Mr Duriska says it tends to follow a boom and bust cycle.

Then there are the companies that have been the victims of hype.

Orphan drug maker Antisense (ASX:ANP) surged 294 per cent on no news. Mr Duriska has noticed a lot of hype around the company as people hunt about for undervalued medtechs, but reckons it has probably had its time in the sun unless they can produce some interesting news.

Phosphagenics (ASX:POH) ticked up after giving an update on its Singapore arbitration case. Mr Duriska says this will be a binary outcome: if they don’t get a favourable ruling the stock will fall, and if they do it’ll go up. But because the promised payout will take longer than a dividend — there will be a lot of paperwork involved — it’s likely people will get bored and the stock will fall away.

And finally there is Race Oncology (ASX:RAC), which has seen no share price boost, for all of the hype online. Mr Duriska says this company was a good one when it listed in 2016 and has solid pharmaceuticals companies backing its drugs.

“It’s one of the better ones out there, with proven drugs, although the market cap is relatively high,” he said.