Here are the top contenders for the next ASX health care merger
Health & Biotech
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Advisory firm Wilsons has named its top picks for potential mergers and acquisitions in what some are calling an Australian Life Sciences boom.
In a research note on Viralytics – acquired by US heavyweight Merck last month – Wilson’s named Telix, Opthea, Anatara Lifesciences and Oncosil Medical as next in line.
“We note that other potential takeover targets in our coverage universe based on asset quality, IP [intellectual property] protection and clinical data could be TLX, OPT, ANR and OSL; although we do not anticipate M&A activity for any of these assets in the near term,” it said.
Referring to the Viralytics (ASX:VLA) acquisition, Wilsons said it “emphasised that trade buyers would pay up for good science, backed by strong patent rights and conferring a clear clinical advantage”.
In the first two months of the year, four ASX companies have been sold off in deals totalling $2.3 billion.
At a closing price of 14c on Friday, Oncosil Medical (ASX:OSL) is the bargain of Wilsons’ picks.
The company’s lead product, OncoSil™, is a targeted radioactive isotope, implanted directly into a patient’s pancreatic tumours via an endoscopic ultrasound.
Treatment with OncoSil is intended to deliver more concentrated and localised beta radiation compared to external beam radiation.
Last month, the company reported positive data for the first 20 patients enrolled in its global pancreatic cancer clinical study program.
Telix Pharmaceuticals (ASX:TLX) debuted on the ASX last November in what was one of the biggest biotech IPOs in recent times.
The company raised $50 million at a 65c issue price – trading down at 54c on Friday.
Telix is pre-revenue but is bringing to market a late-stage pipeline of cancer drugs and diagnostic products, based on radiopharmaceuticals or molecularly-targeted radiation.
Oral gastro treatment developer Antara Lifesciences (ASX:ANR) closed at $1.63 on Friday.
Its lead product Detach is a natural product that hopes to address concerns about the over-use of antibiotics in animals and humans.
Last month, the FDA agreed that animals treated with the drug would be safe for human consumption. This leads the way for US sales.
Opthea (ASX:OPT), a developer of novel treatment for eye diseases, closed last week at 62c.
Its lead product OPT-302 blocks two members of the vascular endothelial growth factor family which cause blood vessels to grow and leak.
Aberrant blood vessel growth and vascular leakage are hallmarks of several eye diseases including wet age-related macular degeneration (wet AMD) and diabetic macular edema (DME).
Wilsons said last year’s market movements did add some uncertainty as to what is to come.
“We are not sure whether biotech will necessarily continue rallying to generate another bull market for the sector, especially following a general healthcare sell-off in 2017.”