InvestSMART

Encouraging data sparks investment

Speculative fever gripped parts of the biotech market on Thursday, with steep share price rises for two companies amid optimism for research progress.
By · 1 Nov 2013
By ·
1 Nov 2013
comments Comments
Speculative fever gripped parts of the biotech market on Thursday, with steep share price rises for two companies amid optimism for research progress.

The gains took place against the backdrop of rising funds flowing into the sector locally and in the US this year.

The expected approval by the US Food and Drug Administration for regenerative cell group Mesoblast to start phase III trials of a congestive treatment led to its shares surging 9.6 per cent to $6.60 - a seven-month high.

Prana Biotechnology shares were pushed ahead on optimism for its memory loss and ageing agent, PBT2, after a positive reference in a peer-reviewed journal.

This lifted its shares by 43 per cent to 54.5¢, even though the results of phase II trials of PBT2 will not be released until March. This will provide the critical "proof-of-concept" data indicating whether further research is warranted.

Indicative of the strong investor interest for promising research progress, earlier this month Neuren Pharmaceuticals raised $21 million via a placement, with Osprey Medical raising $14 million.

In the unlisted space so far this week, Nexvet has raised $7 million and Hatchtech $12.6 million, on top of the $23 million it previously raised to fund its head lice research program.

Elsewhere in the sector, former ChemGenex management has moved to revitalise Invion, which has three phase II agents undergoing clinical trials, with several milestones due over the next six months.

"The biotech market is in much better shape than in 2008, 2009 or 2010," said Dr George Zavoico, of MLV and Co in the US.

"The risk-reward ratio in biotechnology is greater than with blue chips. Out of a portfolio of a dozen [biotech] stocks, two or three will do very well."
Google News
Follow us on Google News
Go to Google News, then click "Follow" button to add us.
Share this article and show your support
Free Membership
Free Membership
InvestSMART
InvestSMART
Keep on reading more articles from InvestSMART. See more articles
Join the conversation
Join the conversation...
There are comments posted so far. Join the conversation, please login or Sign up.