Hobart’s weather is bracing at this time of the year (maybe understating things a tad) but there was a much warmer glow enveloping attendees at the 17th Bioshares Biotech Summit held at our southernmost capital this week.
That’s because the life sciences sector is showing the first signs of emerging from a post-pandemic nuclear winter, when fundraising became nigh on impossible.
“There are positive signals that the year ahead should start to deliver broader positive gains for investors,” Bioshares says.
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Investors’ cheque books are out again, with three initial public offers (IPOs) on the go, breaking a 16-month drought since gut health play Microba (ASX:MAB) debuted in April last year.
Still, the latest IPO aspirants can’t be accused of being too greedy.
Cleo Diagnostics is passing the hat for $12 million, as it develops a blood-based diagnostic for ovarian cancer.
The disease is notoriously hard to pick up early and only about 30 per cent of women detected at an advanced stage will survive beyond five years.
“There is no accurate presurgical method to diagnose ovarian cancer or to differentiate accurately between cancerous (tissues) versus the much more common benign disease,’’ says Cleo CEO Dr Richard Allman.
“This is simply not good enough.”
Cleo will be valued at a nominal $26 million after its slated August 18 listing.
As with most other industry sectors, artificial intelligence will profoundly change the medical and surgical sectors, so CurveBeam AI’s proposed market debut is right on message.
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CurveBeam has developed 4D tools to help orthopaedic surgeons with bone separation and segmentation. While CurveBeam’s R&D is carried out at its Melbourne HQ, most other activities take place at its Hatfield, Pennsylvania facility.
CurveBeam AI is aiming for $25 million ahead of an August 23 listing, valuing the company on paper at $154 million.
Adding to the legion of ASX “pot stocks”, Dragonfly Biosciences (ASX:DRF) has been doing the rounds for between $3 million and $5 million, for a nominal market cap of around $31 million.
Dragonfly’s cannabidiol products are mainly sold in the UK, using material sourced from Bulgaria. But the company sees an Australian listing as a springboard for Asian growth and is also attracted by our enthusiastic take-up of medicinal cannabis.
Secondary biotech raisings have perked up as well.
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According to Bioshares, 33 biotechs raised $383 million in the June quarter, compared with only 12, which gathered $77 million, in the March quarter.
The June quarter raisers included a meaty $60 million by stem-cell play Mesoblast (ASX:MSB), which next week will find out whether the US Food and Drug Administration (FDA) approves its therapy for graft-versus-host disease.
The stakes are high for the company, given it has struggled to win approval over the years. Meanwhile, US-oriented lung diagnostic play 4D Medical (ASX:4DX) raised $45 million, while precision medicines dabbler PYC Therapeutics (ASX:PYC) wrangled $30 million to progress two eye disease trials.
Another reason for the tentative rebound in sentiment is the stunning success of Neuren Pharmaceuticals (ASX:NEU) and Telix Pharmaceuticals (ASX:TLX) in the US.
In March this year the FDA approved Neuren’s treatment for Rett syndrome, a rare neurological disorder, after two decades of development (and many setbacks).
Neuren is now working on a therapy for four other same-but-different diseases – a market potentially even bigger.
“We are working feverishly to get a second drug as far as possible,” Pilcher told the jamboree.
Meanwhile, Telix expects to generate more than $400 million of annual revenues from its Illucix nuclear diagnostic tool, which the FDA has approved for prostate cancer imaging.
“The company hopes to add imaging of kidney cancer and glioblastoma (brain cancer) to its repertoire.
To date, our homegrown drug and device champions have been the ‘big three’ of CSL, Cochlear and Resmed. Expect more of our health heroes to join their ranks – and not before time.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
Find more Tim Boreham wisdom at stockhead.com.au
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Originally published as Tim Boreham: Healthy outlook for Aussie biotech newcomers
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