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The demand on the healthcare sector has never been more apparent than right now as the world struggles to come up with a suitable treatment for COVID-19, that has killed more than 1300 people so far with a record rise in number of deaths in a single day at 242. In wake of this recent Coronavirus outbreak that has sparked frenetic trading in quest of finding a treatment, Biotech industry has been gaining tremendous amount of attention around the world. Investors are pouring money in companies from biotechs, working on treatments and developing vaccines to alleviate the coronavirus spread, to telemedicine firms serving the sick trapped at home.
Some of the American Biotech companies have been engaged in developing the vaccine against the novel virus including Gilead Sciences, Regeneron Pharmaceutical, Inovio Pharmaceuticals, Moderna. Australian biotech giant CSL Limited (ASX: CSL) has recently informed that it has united with Queensland University for COVID-19 vaccine development program contributing to the global effort in combating the infection. Another clinical stage company Biotron Limited (ASX: BIT) announced the commencement of evaluation of different promising compounds capable of targeting a variety of strains of coronavirus, including the deadly 2019-nCoV which has created a global health emergency.
Australian Biotech Space
Australian biotech sector has outperformed other sectors on ASX with the sector witnessed 59% growth on a one-year basis (shown below), backed by the outstanding performance of some of the leading biotech stocks.
Biotech companies like Polynovo Limited (ASX:PNV), Nanosonics Limited (ASX: NAN), Pro Medicus Limited (ASX:PME), CSL Limited (ASX:CSL), Ramsay Health Care Limited (ASX: RHC) have been the key players on ASX in 2019 with a whopping 1 year return of 209%, 128%, 96%, 48%, 24%.
Western Australia -Set to become a world-leading life sciences hub of note
Primed to become world-leading life sciences hub of note, Western Australia announced formation of an Industry Reference Group, to steer the development of a 5-year life science growth plan in coming months. A blueprint will be developed following the $1.2 million investment from the McGowan Government in the creation of this life sciences innovation hub.
A clear action plan to promote and bolster WA's life sciences industry, to create jobs, boost international trade as well as investment opportunities, and diversify the economy of the state will be provided by The Health and Medical Life Sciences Industry Growth Plan (the Plan).
With a well-established background of WA in medical & health research, this initiative was taken to sustain the development of innovative products and services, in turn, to help improve its commercial foray into life sciences research.
A steering committee would be established to offer direction in a strategic manner and advice on the advancement of the plan to be chaired by the Deputy Premier and Minister for Health, Hon. Roger Cook MLA, who has taken this as an opportunity to build upon the competitive advantages of WA.
In the last two years, WA had seen highest growth in the number of organizations (50%) in life science that has increased from 119 in 2017 to 179 in 2019; with the number of employees having risen from around 16,936 to 22,763, a 34 % increase.
Western Australia’s Small Cap Biotechs
There are approximately 30 ASX listed biotech companies headquartered in WA. Let’s have a glimpse of five WA biotech companies in the following section.
Orthocell Limited (ASX: OCC)
Orthocell Limited (ASX: OCC) is a regenerative medicine company that is engaged in the development and commercialization of products that repair various soft tissue injuries, and promote mobility for patients. The robust product portfolio of Orthocell comprises a collagen medical device to promote tissue repair and healing in numerous applications including orthopaedic, reconstructive and surgical, known as CelGro®.
Recently, Orthocell has been granted Canada and Japan divisional patents for CelGro®. CelGro®’s global addressable market is in excess of US$4.4 billion and expanding. Earlier in January, the company had received A$2.9 million in R&D tax incentive refund.
On the stock front, OCC traded at $0.470, on 14 February 2020. The stock has generated a significant of 187.88% in the last one year.
Race Oncology Limited (ASX: RAC)
A specialty pharmaceutical company, Race Oncology Limited (ASX: RAC) has a business model to pursue later-stage cancer drugs that have been unnoticed by big pharmaceutical companies. Race’s first drug is Bisantrene, which is a chemotherapy agent that was used in more than 40 clinical studies during the 1980s and 1990s but later was abandoned. With compelling clinical data in acute myeloid leukaemia (AML) as well as breast and ovarian cancers, Race is seeking to gain US FDA approval for Bisantrene.
Recently, the company completed a transformational quarter with the following key highlights-
- Launched 5 path strategy for Bisantrene, expanding drug’s addressable market and reducing the clinical defrays risk.
- Considerably strengthened its management team by appointing Dr Daniel Tillett, a prominent biotech investor as Chief Scientific Officer and Prof Borje Andersson, World-recognized research leader as Chair of Clinical Advisory Board.
- Anticipating commencement of Bisantrene trials in AML, breast cancer and ovarian cancer in 2020.
- As at 31 December 2019, Race held A$1.55 million cash.
On the stock front, RAC closed at $0.345, on 14 February 2020. The stock has generated an outstanding return of 361.54% in the last six months.
Impression Healthcare Limited (ASX: IHL)
A first-in-class innovator and developer of a diversified mix of medicinal cannabis pharmaceutical products for global export potential, owner of IncannexTM cannabinoid oils and oral devices manufacturer Impression Healthcare Limited (ASX: IHL) is presently focused on undertaking clinical programs for the development of four uniquely formulated medicinal cannabis products for treating-
- Obstructive Sleep Apnoea (OSA)
- Traumatic Brain Injury/Concussion
- Temporomandibular Joint Disorder and Periodontitis (Gum Disease)
Recently, the company has placed a significant purchase order for a range of new cannabinoid products, representing expansion of IncannexTM Cannabinoid Oil sales program.
- A purchase order for 3000 bottles of cannabinoid oils has been placed by the company. These would be made available for sale under the Australian Special Access Scheme.
- The company has designed three new cannabinoid products for greatest patient need called Nutralesic, Inflammex and Releafia. These products have now been introduced to Impression’s product mix adding value to it.
- Impression has also extended to its strategic relationship with Cannvalate Pty Ltd, the largest distributor of medicinal cannabis products in Australia, to fast-track patient acquisition.
- Following this expansion, Cannvalate informed the company that it intends to exercise its 2nd tranche of stock options in IHL, making Cannvalate a major long-term shareholder of Impression Healthcare Limited.
Three new brands of IHC. Source: Company’s ASX Announcement
On the stock front, IHL last traded at $0.061, declining 4.6 % on 14 February 2020. The stock has generated a significant return of 255.56% in the last one year.
Botanix Pharmaceuticals Limited ASX: BOT)
Clinical stage synthetic cannabinoid company Botanix Pharmaceuticals Limited (ASX:BOT), is focused on the development of safe and topical treatments for serious cases of skin disease utilizing the antimicrobial, immune modulating and anti-inflammatory properties of synthetic cannabidiol.
Botanix has recently released Quarterly Activities Report for the quarter ending 31 December 2019, outlining further progress and development across its product portfolio. Key highlight are as follows-
- Based on promising efficacy and safety data from the BTX 1503 Phase 2 study, the company to proceed with the FDA end-of-Phase 2 meeting and preparations for a Phase 3 study.
- Enrollment for the BTX 1204 Phase 2 atopic dermatitis study has been completed. Data readouts expected in the current quarter.
- Ethics approval for the BTX 1702 Phase 1b study for papulopustular rosacea received, with study to commence the first quarter (Q1) of CY2020.
- Advanced with antimicrobial development program. The new study to begin in late first quarter (Q1) of CY2020.
On the stock front, BOT traded at $0.090, on 14 February 2020.The stock has generated a negative return of 60% on a six-month basis.
