The Australian
listed healthcare and biotech sector has expanded to 134
companies in the second quarter of 2004 with a cumulative
market value of $25.5 billion. There were six new biotech
listings in this quarter although the biotech window looks
to be closing fast.
The last quarter was a healthy period
for raising cash for Australian biotechs, with $84 million
raised in total although 40% of this money was raised
from overseas investors. The total funds raised for the
first six months of this year was $198 million.
There were six biotech listings in
the last quarter bringing the total to 25 listings for
the last 12 months. Of these, 17 were new IPOs and eight
were backdoor listings. $211 was raised in IPOs over the
12 months with an average $8.4 million raised. Of the
25 companies that listed, 12 produced positive returns
for shareholders and 13 stocks finished below their issue
price. Overall, the stocks generated an average 2% gain
from their issue price. In comparison, 27 stocks listed
in the US over the last 12 months raising an average US$61
million.
Drug discovery stocks in Australia
have generated a flat performance over the last six months,
which is largely in line with the Nasdaq Biotech Index
which has increased by only 5% over the same period. The
ASX Healthcare Index has increased by 14% this calendar
year largely due to gains in some of the larger stocks
in the sector, CSL and Resmed. The ASX All Ordinaries
Index increased by 6.6% for the first six months of this
year. It has been a difficult three months for the sector,
with two thirds of the companies recording negative net
share price movements over the period.
2004 has finally seen the start of
the much expected consolidation phase in the Australian
biotech sector, although this activity has been more with
US biotechs. Three Australian biotechs – AGT Biosciences,
Australian Cancer Technology and Benitec – made
acquisitions in the US, and Axon Instruments was acquired
by its US competitor. However the attempted merger between
Peptech and Agenix failed for the second time.
