Australia's biotech sector is showing signs of positive momentum on the back of progress with the sector's leading biotechs.
Over 2024, the Bioshares Index (which includes all stocks except for the established majors CSL, Resmed and Cochlear) was up 37.5%, after climbing 18.5% in the first half of the year.
Positive developments that have helped drive this shifting interest towards the sector include the FDA approval of Sofdra (to treat excessive sweating) for Botanix Pharmaceuticals, the surging sales of Telix Pharmaceuticals' Illuccix (tracking at $800 million per annum) and the approval in December of Mesoblast's stem cell therapy for the treatment of GvHD. Other positive progress has been the climbing income for Neuren Pharmaceuticals from sales of DAYBUE for the treatment of Rett syndrome as well as significant milestone payments and cash from territory extensions.
Dimerix has also been driving the positive sentiment with its third licensing deal last week for its orphan drug candidate currently in a global Phase III study for the treatment of the kidney disease FSGS.
More potential positive news flow can be expected this year as Opthea completes a read out from its 2,000 patient studies in wet AMD, and the next diagnostic product approval and launch from Telix Pharmaceuticals.
However the positive impact on share prices in the sector has not been widespread. If we exclude the performance of three companies in 2024 Telix, Sigma Pharmaceuticals and Mesoblast the Bioshares index fell by 4%.
The Bioshares Model Portfolio also had a strong year, up 40.8%, following three negative results for the preceding three years. The Bioshares Top Six Picks has also started well this year, up 20.1% in just three weeks.
In other indices, the Large Cap Index was up 6.9% for the year. The Nasdaq Biotech Index was up marginally by 3.3%, and the ASX 300 Index increased by 4.2%. The ASX 200 Accumulation Index, with includes the reinvestment of dividends, was up 11.4% over 2024.
The upswing is consistent with the four-to-five year cycles that has characterized the biotech sector for almost 40 years, with the last upswing beginning in 2025. That upswing was driven by the pandemic and the demand from the biotech sector of rapid vaccines and diagnostics to fight the impact and spread of the coronavirus.
IPOs and Sector Exits
There were two IPOs during the half. Vitrafy Life Sciences, which is commercializing a novel cryopreservation technology, listed and raised $35 million. Nerve regeneration company ReNerve raised $7 million. Its executive director and largest shareholder is Julian Chick, former CEO of Avexa. Both stocks finished the year at a slight discount to their listing price.
Six companies have exited the sector, or are searching for new opportunities, which highlights the challenges for companies at the lower end of the sector in raising capital. Genetic Technologies went into voluntary administration, and then sold its Genetype business to Rhythm Biosciences for $0.625 million in cash. Hexima is exploring acquisition opportunities. Its plan to acquire an AI company was cancelled in December after five months of negotiations. Its executive chairman is Geoffrey Kempler.
A seventh company, Visioneering Technologies, is due to exit the sector by delisting in February this year.
Aortic valve company Anteris Technologies Global Corporation successfully redomiciled to the US. Its primary listing is now the Nasdaq with its shares also trading via CDIs on the ASX. The company raised $138 million through its US listing.
Capital Raises
A record $2.4 billion was raised by ASX listed biotechs in 2024. The largest individual raise was by Telix Pharmaceuticals which issued convertible bonds to bring in $650 million. In second place was Anteris Global Technologies which raised $138 million after it redomiciled to the US listed on the Nasdaq.
Of particular interest is the increased activity by Canaccord Genuity in assisting with capital raises, being involved with at least nine raises in the second half (with at least three involvements in the first half).
