Drug Safety: A Bitter Pill Initiatives One day we hear about a newly introduced miracle drug; Greater Washington steers away from medica-the next thing we know it’s being pulled from the market. Before yourtions once alarms are sounded, particularly whencounseling geriatric patients who are often frailmouth can open to take a prescribed dose, fingers are already wiggling to assign
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In this edition.
The players’ bench in the biotech sector
sees lots of rotation with the result that an
apparently less well known performer can
run into the play and move investment
sentiment forward, compensating for the
hits and misses that previously dragged
down performance. Sirtex Medical is one
such star performer but its rise comes as no
surprise to readers of Bioshares who have
28 September 2012
been advised on this stock since Bioshares 5 Edition 474
(March Quarter 2001). There were someother surprising out-performers amongst the Delivering independent investment research to investors on Australian small cap biotech stocks in the third quarter.
biotech, pharma and healthcare companies. However, the correlation between theBioshares Large Cap Index and the NasdaqBiotech Index over the last 12 months Quarterly Review
reflects demand for counter-cyclical stocksthat can sustain earnings in the face of a Strong Gains in Sirtex Medical Drive Growth
weakening global economy.
Companies Covered: AHZ, Quarterly
in the Bioshares Index
Exceptional interest in Sirtex Medical helped push the Bioshares Index into positive
territory in the September quarter, which rose 5.5% from the previous quarter. Shares in Sirtex Medical rose 56% for the quarter, placing a capitalisation of $530 million on the company. The increase in the Sirtex share price accounted for 40% of the movement in the Bioshares Index. Sirtex shares were also 121% higher from September 30, 2011. Sirtex Medical has now garnered the interest of brokers who cover the larger life science and healthcare stocks. The company also announced the payment of a 10 cent dividend, up The Bioshares Large Cap Index continued to outperform, posting a 15.8% increase for
the quarter. This was the index’s fourth consecutive quarter of growth and is 47.3% higher from the same point in time a year ago. The Bioshares Large Cap Index includes CSL (Cap: $23 billion; +17% ), Resmed (Cap: $ 5.5 billion; +25%), Cochlear (Cap: $3.8 billion; +2%) and Sigma Pharmaceuticals (Cap: $759 million; +5%).
Av. annual gain (11 yrs)
The Nasdaq Biotech Index rose 10% in the September quarter. Its 53.3% increase from a
year ago correlates with the performance of the Bioshares Large Cap Index. The Nasdaq
Bioshares is published by Blake Industry & Biotech Index includes an influential number of revenue and profit generating companies in addition to a greater number of development stage biotech and medtech stocks.
Blake Industry & Market Analysis Pty LtdACN 085 334 292 The growth trends in the Nasdaq Biotech Index and the Bioshares Large Cap Index are indicative of a flight towards stocks with protected and non-cyclical earnings. In con- trast, the ASX 300 Index posted a more modest gain of 9% for the last 12 months.
Capital raised by ASX-listed life science companies totalled $53 million for the September quarter 2012, 17% below the $64 million raised in the June quarter 2012. The cumulative Fax: (03) 9329 3350Email: [email protected] total for CY2012 stands at $130 million, compared to $397 million for the first three quarterof CY 2011.
David Blake - Editor
Ph: (03) 9326 5382
The largest capital raising for the quarter was conducted by Unilife (US$20/A$20.3 mil- Email: [email protected]
Mark Pachacz - Research Principal
lion) and Sunshine Heart (US$20.125/A$19.7 million), followed by pSivida (US$5.36/A$5.24 million). If Prana Biotech’s $1.42 million is included, then 88% of capital raised in the quarter was obtained through US investment banking conduits.
Individual Subscriptions (48 issues/year) Index performances by Quarter
Q4 2011 Q1 2012 Q2 2012 Q3 2012
Copyright 2012 Blake Industry and MarketAnalysis Pty Ltd. ALL RIGHTS RESERVED.
Secondary electronic transmission, photocopying, reproduction or quotation is strictly prohibited withoutwritten consent of the publisher.
The top-performing ASX-listed life science stock for the Septem-
(partnered to Medigen) in China, South Korea and Tiawan is likely ber quarter was Eastland Medical (EMS: 3.5 cents) which increased to have increased investor confidence in the stock.
by 169%. The company has been conducting a trial of a sub-lingual dose form of an antimalarial drug (Artimist), addressing Other strong performers for the quarter included USCOM (16.5 the pediatric market in Africa. The company completed enrolment cents; + 76%), Prima Biomed (19.5 cents; +70%) and Medical De- in its Phase III 150 patient trial and expects to announce results in Under-Performers
Dental products company SDI Limited regained support for its The worst performing stock in the September quarter was Bone stock with a 124% increase over the quarter. A 63% increase in net Medical (0.3 cents), a long standing underperformer. Its shares fell profit and a 49% increase in EBIT galvanised interest in the stock, 40% over the quarter. An absence of clinical progress in the face with a 21% growth in US exports also playing a key role despite of ongoing dilutionary convertible note finance explains in part the impact of a dollar largely on parity with the US dollar.
Imugene shares surged 113% for the quarter, albeit off a low base, Shares in Reva Biomedical (68 cents) fell 38% over the quarter.
to finish at 1.7 cents at the close. The company is now a drug Slower than expected progress in its RESTORE trial and the need delivery company seeking to commercialise the Linguet sub-lin- to make improvements to its REZOLVE drug eluting bioresorble gual assets vended in by Cosegna Group (CGP). Perth-based Forrest scaffold contributed to price weakness with this stock. (see Capital was involved with the transaction and restructuring. An- other company that has been an investment focus of Forrest Capi-tal is Patrys (3.8 cents). Patrys stock rose 73% over the quarter.
GI Dynamics shares fell 35% over the September quarter as the Patrys completed a placement (last quarter) and and SPP (this market digested the news that the FDA approved the pivotal trial quarter) at 2 cents, raising $2.8 million.
of the company’s Endobarrier device but required 500 patients tobe enrolled, a figure higher than the 300-400 estimated in its Au- Sunshine Heart stock gained momentum in the quarter as new US- based investors came on board and effectively re-capitalised thecompany. Sunshine Heart is now capitalised at $74 million. Sun- Bioxyne (3 cents) shares slumped 30%. Athe company reported shine Heart shares rose 90% over the quarter.
late last quarter that its Phase II trial of H1610V for COPD failed todeliver a positive overall result, although signs of efficacy in a Shares in Progen Pharmaceuticals increased 86% for the quarter.
population sub-group were obtained. The company is now sub- Progress in recruitment of the company’s Phase III trial of PI-88 ject to several shareholder actions.
Selected Clinical Trial Developments - Q3 2012
Reported 216 of 390 pts recruited into Phase II trial; 82 pts have received 10 cycles or more treatment Implanted first patient w ith Novorsorb bioresorbable temporising matrix in flap clinical trial Reported 12 out of 24 implanted in VAC trial; one pt w ithdraw n due other issues Enrolment completed in Phase II open label trial; 150pts; 28 day follow up Received FDA authorisation for 500 pt, 25 site, trial of Endobarrier in obese pts w ith diabetes Completed enrolment in first part of feasibility trial; 26 pts of 50 pts. No major adverse coronary events reported to date.
Enrolled 150 pts in Phase II PATRON trial;500 pts, 23 sites in Taiw an, China and South Korea DIABECELL (encapsulated porcine islet Reported results from NZ Phase I/Ia trial; 14 pts; 1 dose; stat. sig. reduction in unaw are hypoglycaemic events at doses of 5,000 and 10,000 IEQ/Kg DIABECELL (encapsulated porcine islet Argentine Phase I/IIa trial; 8 pts; 2 doses; informal analysis reveals reductions in HbA1c, unaw are hypoglycaemia and insulin dose Reported 40% of patients in dosing in IMAGINE trial; 40 pts; 3 pts reached 24 Reported 14% of patients in dosing in Reach2HD trial; 100 pts Reported 100% and 90% enrollment in tw o concurrent Phase II trials of Vivagel for the treatment of bacterial vaginosis; each trial enrolling ~220 pts 8 pts enrolled in 63 pt (54 evaluable)Phase I study; I pt completed 6 months treatment 474
Capital Raisings by Australian-listed Biotech Companies Q3 2012
Investment Manager or Investor
Type of raising
Funds raised ($M)
Total raised in Q3 2012
Total raised in Q2 2012
Total raised in Q1 2012
Total - 2012 (CY YTD)
ASX Listed Life Science Stocks – Capital Raised by Quarter – 2007 Q3 - 2012 Q3 ($M) 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 474
Bioshares Model Portfolio (28 September 2012)
Portfolio Changes – 28 September 2012
Allied Gets Approval for CardioCel Under Authorised Prescriber Scheme
Allied Healthcare Group (AHZ: 2.3 cents) has been granted ap- DNA Vaccine Program
proval for use in Australia of its CardioCel product under an Au- Allied has also invested in a DNA vaccine program, in a company thorised Prescriber Scheme. CardioCel will be used for the repair called Coridon. It currently has a 44.4% stake in Coridon and will of congenital heart defects, usage supported by positive 36 month be looking to increase its stake to over 50%. The first clinical trial safety and efficacy data from a pediatrics trial in South Africa.
is expected to start late this year or in early 2013, using a vaccinefor the prevention and also treatment of the herpes virus (HSV2).
The first hospital to be able to access the new product is theMater Hospital in Brisbane, following an application by surgeon Management and Board
Tom Karl, who is also a scientific advisor to the company.
Peter Turvey, formerly a senior executive with CSL, has joined theboard of Allied Healthcare Group. Allied has built up its manage- In June this year the company filed the product for approval in ment team as well, adding former Avexa CEO, Julian Chick, as Europe via a CE Mark application. The company is also seeking to Chief Operating Officer and former Clinical Cell Culture CEO, Bob gain marketing approval in Australia and is expecting to finalise its Atwill, as CEO of the company’s regenerative medicine business.
FDA submission towards the end of this year.
Existing cardiac patches sell for between $500-$750, and the com- For FY2012, Allied generated revenue of $6.4 million from its oper- pany will be looking to charge a premium once it receives market- ating businesses which sell medical equipment products in Aus- tralia. The net loss for the company was $10.2 million, which in-cludes a $5.4 million impairment of goodwill following the acquisi- Use in repairing heart defects is only the initial application. Other tion of bioMD. Its net cash outflow for the year was $3.5 million.
applications being investigated include pelvic floor reconstruc- The company had just over $2.0 million in cash at the end of June.
tions, hernia repairs, and a major area in heart valves. In July this Allied is capitalised at $18 million.
year, the company signed a research collaboration with CSIRO tolook at using its ADAPT treat tissue scaffolds as a delivery vehi- Bioshares recommendation: Speculative Buy Class B
cle for adult mesenchymal stem cells in the area of heart failure Bioshares
The company’s ADAPT technology is a process by which animaltissue is re-engineered for implants in people. The company hasshown that its process delivers a lower calcification rate, allowingtissue flexibility to be maintained.
The Australian Listed Life Sciences Sector
September 28 (September 30), 2012: Capitalisation $42.3 billion, 96 companies
Bioshares Large Cap. Index
Change - Change -
Manufactures pharmaceutical products including vaccines Manufactures diagnos tic and treatment equipment for Pharmaceutical manufacturing and wholesaling Capitalisation Total
Change - Change -
Developing therapies based on mesenchymal pre-cursor stem cells, with applications in cartilage regrowth and heart Developing a mechanical heart pump (LVAD) Developer of the transdermal drug products Axiron, The company's core technology uses radioactive particles to irradiate tumours in the liver. Approved for use in most major Manufactures vitamin, mineral and herbal supplements and skin & hair products in Australia and N.Z.
Developer of pharmaceutical applications of chemical Markets the lung function test, Aridol. Bronchitol, for the treatment of treat cystic fibrosis, now approved in Europe.
Developing a bioresorbable coronary stent Commercialising the Endobarrier, an implantable polymer liner for the management of obesity and diabetes 474
Change - Change -
Biopharmaceutical company with a revenue generating product, generic fondaparinux. Lead product HA-Irinotecan in a pivotal Phase III trial for colorectal cancer.
Development, manufacture and commercialisation of a range of in vitro diagnostic tests for point-of-care us e Developing drugs to treat cancer and CNS diseases, and has also developed a gene diagnostic for epilepsy.
Developing a novel disinfection technology, the first product is a point of care ultrasound probe disinfection unit Commercialising a platform technology (alpha-tocopherol) that improves the delivery of pharmaceutical and other Developer of anti-infective drugs, including the flu drug Relenza. Inavir, developed with Daiichi Sankyo, a long acting Developing a 'dual opioid' drug to treat moderate to severe Development and production of omega-3 food additives from Developing the C-Pulse heart assist device. The C-Pulse wraps around and compresses the aorta, increasing blood Developing drugs to treat CNS diseases such as Alzheimer's Developing the VitroGro product for ulcer and wound healing Commercialising the Penthrox inhaler for temporary pain relief. Used widely in ambulances across Australia. Developing an improved dosing anti-fungal drug, Subazole Developing an analogue of the alpha-MSH protein, named Provides DNA paternity testing services and holds broad patents relating to the use of non-coding DNA.
Developer of a biological coatings technology that can be applied to immunoassays, bio-separations, drug delivery and Developing a bladder cancer treatment and food safety Developing drug delivery technologies, with a special focus 474
Change - Change -
Markets an oral device for the treatment of sleep apnea and Developing the CINCOR system to limit the incidence of Develops devices that aid the diagnosis of secondary lymphoedema, muscle wasting and other disorders Marketing cognitive performance diagnostic products Manufacture & distribution of amalgam (fillings) & other dental materials and product R&D.
Developing antisense compounds to treat multiple sclerosis Developer and manufacturer of biopharmaceuticals. Company is based in Singapore and was spun out of Sonic Development, manufacture and distribution of prescription and OTC medicines as well as complementary and alternative medicines, dietary supplements and health foods Development and commercialisation of functional brain Formerly Cbio. Evelauating Xtoll biologic for lupus and developing an approved heart drug, Nadalol, for COPD and Development, manufacture and commercialisation of a Developing the anti-malarial product ArTiMist.
Developing a cancer treatment based on the application of Develops and distributes medical devices such as safety equipment to prevent needle stick injuries and sterile Developing human antibody therapies for the treatment of lung, pancreatic, gastric and colon cancers Diversified medical products group. Investor in Coridon, a Manufacturer, marketer and distributor of a range of over the counter (OTC) pharmaceuticals, complementary medicines Developing cell therapies for diabetes, haemophilia and 474
Change - Change -
Developing drugs , including antibodies, around the VEGF C Manages liver treatment centres in Asia. Not previously included in these tables. Made a backdoor listing through Developing transdermal drug delivery technologies Holds a 100 % stake in PolyNovo, a polymer chemistry A developer of cancer therapeutics, including PI-88 and R&D company focusing on gene silencing, specifically DNA Develops, manufactures and markets solid state ophthalmic lasers used to treat secondary cataracts and retinal Manufacture of confocal microscopes for clinical diagnosis Provides specialised storage services, especially for Developing complementary medical compounds called Bioeffectives. Suspended from trading.
Developing peptide compound libraries for use in human Developing compounds to treat HCV and HIV.
Asset development company, with interests in Vibrovein, Linguet, BreatheAssist and Aspen Medisys.
A medical devices company that has developed a retractable Develops, manufactures and distributes advanced molecular diagnostic tests, with a particular focus on women’s health.
Develops, manufactures and markets sleep diagnostic and Marketing a non-invasive heart output function monitor Manufacturer of pharmaceutical ingredients to international standards for major pharmaceutical groups.
Change - Change -
A nuclear medicine company that markets the Technegas Markets the SphygmoCor device, a noninvasive technology that provides information regarding the functioning of the Respiratory and pulmonary devices company. Recently Developing therapies that target the midkine protein. Recently launched a range of hair loss products.
Rolling out tissue banking services in Australia and Asia Developing analogues of naturally occurring phenolic hormones to treat cancers and other conditions.
Sales and devlopment of hyper-immune bovine colostrum Manufacture and sale of protein separations technologies Focused on the development of LAIV influenza vaccines Manufacture and supply of medical devices and equipment. Not previously included in these tables. Previously known as Developed the MicroStreak technology for the automation of microbiology laboratory processing. Now developing an Automated Optical Plate Sorting s ystem.
A developer and manufacturer of prosthetic implants and Developing an immunotherapeutic (HI164 OV) to treat COPD.
Now a drug delivery technology technology company. Has Marketing the FerriScan technology, a non-invasive tool for Early stage developer of antibiotics that show activity against Has developed a novel technology for the extraction of Developing a compound to treat Hepatitis B, AGX1009. Also seeking a partner in China to develop Thromboview, an Focusing on pain drug development following management 474
Change - Change -
Acquired Biohealth, a complementary medicines company Developing treatments for bone and joint degenerative diseases such as arthritis and osteoporosis. Developed retractable syringe technology and other safety Detecting novel functions of known and new protein and Developing novel modular cardiac catheters for the diagnosis Capitalisation Total
Listed Biotech Investment Funds or Companies
Change - Change -
The entity is engaged in the orderly sale of assets.
Capitalisation Total - All
The 3rd Australian Small Caps Conference
The 3rd Australian Small Caps Conference is being held
in Melbourne at the Sofitel on Collins on Tuesday the
16th and Wednesday the 17th of October.
Bioshares subscribers can obtain a discounted registra-tion to attend the conference.
To register, subscribers should to go towww.microcapconferences.com and enter the discountcode of BIOSHARES2012.
Bioshares subscribers will be able to attend the confer-ence for the discounted fee of $375 (inc GST), a savingof $220 off the normal registration fee of $595.
Registration includes attendance at the two day confer-ence, all catering, networking drinks held at the conclu-sion of each day, as well as conference program andinformation on the companies presenting.
How Bioshares Rates Stocks
For the purpose of valuation, Bioshares divides biotech stocks into Stocks without near term positive cash flows, history of losses, or at two categories. The first group are stocks with existing positive cash flows or close to producing positive cash flows. The second group arestocks without near term positive cash flows, history of losses, or at Speculative Buy – Class A
early stages of commercialisation. In this second group, which are These stocks will have more than one technology, product or essentially speculative propositions, Bioshares grades them according investment in development, with perhaps those same technologies to relative risk within that group, to better reflect the very large offering multiple opportunities. These features, coupled to the spread of risk within those stocks. For both groups, the rating “Take presence of alliances, partnerships and scientific advisory boards, Profits” means that investors may re-weight their holding by selling indicate the stock is relative less risky than other biotech stocks.
Speculative Buy – Class B
These stocks may have more than one product or opportunity, and may even be close to market. However, they are likely to be lacking Stocks with existing positive cash flows or close to producing positive cash in several key areas. For example, their cash position is weak, or management or board may need strengthening.
Speculative Buy – Class C
These stocks generally have one product in development and lack Speculative Hold – Class A or B or C
Corporate Subscribers: Pharmaxis, Starpharma Holdings, Cogstate, Bionomics, Biota Holdings, Impedimed, QRxPharma,
LBT Innovations, Mesoblast, Tissue Therapies, Viralytics, Phosphagenics, Immuron, Phylogica, Bluechiip, pSivida, Antisense
Therapeutics, Benitec BioPharma, Allied Healthcare Group, Genetic Technologies, Calzada, Bioniche, Atcor Medical, Invion
Disclaimer:Information contained in this newsletter is not a complete analysis of every material fact respecting any company, industry or security. The opinions and estimates herein expressedrepresent the current judgement of the publisher and are subject to change. Blake Industry and Market Analysis Pty Ltd (BIMA) and any of their associates, officers or staff may haveinterests in securities referred to herein (Corporations Law s.849). Details contained herein have been prepared for general circulation and do not have regard to any person’s orcompany’s investment objectives, financial situation and particular needs. Accordingly, no recipients should rely on any recommendation (whether express or implied) contained in thisdocument without consulting their investment adviser (Corporations Law s.851). The persons involved in or responsible for the preparation and publication of this report believe theinformation herein is accurate but no warranty of accuracy is given and persons seeking to rely on information provided herein should make their own independent enquiries. Detailscontained herein have been issued on the basis they are only for the particular person or company to whom they have been provided by Blake Industry and Market Analysis Pty Ltd. TheDirectors and/or associates declare interests in the following ASX Healthcare and Biotechnology sector securities: ACL, ACR, ADO, BTA,CGP, COH, CSL, MYX, NAN, IDT, IMU,IPD, PXS, SOM, SPL, TIS, UBI. These interests can change at any time and are not additional recommendations. Holdings in stocks valued at less than $100 are not disclosed.
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LAZARD LTD REPORTS SECOND-QUARTER AND FIRST-HALF 2013 RESULTS Highlights • Net income per share, as adjusted1, of $0.45 (diluted) for the quarter ended June 30, 2013, excluding charge2, compared to $0.25 for the second quarter of 2012 • Record second-quarter operating revenue1 of $511 million, up 12% from second-quarter 2012; first-half operating revenue of $925 mi