The ASX may not have been the obvious home for many biotech companies.
Aussie investors may be expert investors when it comes to investing in mining and energy, but when it comes to biotech business, the pool of sophisticated investors in the space is far smaller.
In many ways, the biotech sector resembles the mining exploration sector – it takes time to get a result (and it may not always be the one you want) and it takes money to fund the exploration (or studies) to get to the result.
However, it seems investors are far more patient when it comes to waiting for rocks to come out of the ground than for the results of a ground-breaking, potentially life-saving drug.
This could potentially be due to the fact that the Australian economy was built on rocks and not scientific research.
Biotech stocks under the microscope
Of the small cap ASX biotech stocks on the ASX, they are all at various stages of the lifecycle and it’s not easy to tell if investors prefer later stage biotech companies to those in pre-clinical and phase one studies.
Of the small cap biotech stocks that Star Investing has looked at there does appear to be a slight trend that the earlier the stage of the biotech the smaller the valuation.
Those with market capitalisations over $100 million are all in phase two trials, or about to begin, and have had positive results from previous studies.
The stock with the largest market capitalisation is Paradigm Biopharmaceuticals (ASX:PAR) – it has a market cap of ~$300 million and has reported positive results from a phase two study.
It is closely followed by Telix Pharmaceuticals (ASX:TLX) that has advanced some of its products to phase three clinical trials.
Those with the smallest market caps are those in pre-clinical and phase one studies – yet the largest market cap of a biotech in pre-clinical studies is +$70 million and the smallest biotech market cap in a phase two study is <$5 million.
So, there doesn’t appear to be substantial correlation between how far the biotech is along the life-cycle and the valuation placed on the company.
However, there are clearly many other contributing factors to how the market values a biotech stock.
The disease target for the drug or treatment in development may be a huge market, or it may be a niche indication, or the particular disease may have had billions of dollars spent on it over the years with no successful company emerging with a treatment – making it much higher risk.
This analysis also doesn’t take into account that some of the biotech companies may have had a clinical trial failure and not met the clinical outcomes of the trial – and as such may have pivoted their strategy accordingly.
As with the mining sector – when a discovery doesn’t come good, the reaction from shareholders is always the same. Sell, sell, sell.
We’ve put together a list of the pure-play small cap biotech stocks on the ASX and indicated their latest clinical stage should you wish to put them under the microscope yourself and delve deeper into the fundamentals of each.
ASX small cap biotech stocks and clinical trial phase
|Ticker||Company||Share Price (as at 15 May)||Phase||Market Capitalisation|
|ATX||AMPLIA THERAPEUTICS LTD||0.14||Pre-clinical||$ 5,743,262.50|
|VBS||VECTUS BIOSYSTEMS LTD||0.415||Pre-clinical||$ 9,702,698.00|
|NSB||NEUROSCIENTIFIC BIOPHARMACEU||0.15||Pre-clinical||$ 11,037,089.00|
|PTX||PRESCIENT THERAPEUTICS LTD||0.041||Pre-clinical||$ 16,164,686.00|
|CDY||CELLMID LTD||0.2||Pre-clinical||$ 16,821,718.00|
|ANR||ANATARA LIFESCIENCES LTD||0.375||Pre-clinical||$ 18,529,964.00|
|1AD||ADALTA LTD||0.175||Pre-clinical||$ 20,580,792.00|
|PAB||PATRYS LTD||0.026||Pre-clinical||$ 27,887,348.00|
|ZLD||ZELDA THERAPEUTICS LTD||0.044||Pre-clinical||$ 33,235,046.00|
|EX1||EXOPHARM LTD||0.475||Pre-clinical||$ 38,237,500.00|
|PYC||PHYLOGICA LTD||0.026||Pre-clinical||$ 63,514,272.00|
|NOX||NOXOPHARM LTD||0.6||Pre-clinical||$ 73,560,832.00|
|TDL||TBG DIAGNOSTICS LTD||0.035||Phase 1||$ 7,615,555.00|
|ATH||ALTERITY THERAPEUTICS LTD||0.046||Phase 1||$ 39,598,520.00|
|IMU||IMUGENE LTD||0.017||Phase 1||$ 61,367,388.00|
|FTT||FACTOR THERAPEUTICS LTD||0.004||Phase 2||$ 4,171,342.50|
|RAC||RACE ONCOLOGY LTD||0.057||Phase 2||$ 4,687,441.50|
|DXB||DIMERIX LTD||0.08||Phase 2||$ 12,703,955.00|
|ACW||ACTINOGEN MEDICAL LTD||0.014||Phase 2||$ 15,669,238.00|
|LCT||LIVING CELL TECHNOLOGIES LTD||0.031||Phase 2||$ 17,714,670.00|
|RGS||REGENEUS LTD||0.1||Phase 2||$ 20,888,514.00|
|IMC||IMMURON LTD||0.195||Phase 2||$ 27,927,062.00|
|KZA||KAZIA THERAPEUTICS LTD||0.47||Phase 2||$ 29,218,336.00|
|BLT||BENITEC BIOPHARMA LTD||0.135||Phase 2||$ 34,698,972.00|
|BIT||BIOTRON LTD||0.079||Phase 2||$ 47,058,676.00|
|BNO||BIONOMICS LTD||0.125||Phase 2||$ 68,085,736.00|
|OCC||ORTHOCELL LTD||0.61||Phase 2||$ 73,715,320.00|
|BOT||BOTANIX PHARMACEUTICALS LTD||0.105||Phase 2||$ 80,338,464.00|
|MDC||MEDLAB CLINICAL LTD||0.425||Phase 2||$ 89,684,208.00|
|IMM||IMMUTEP LTD||0.028||Phase 2||$ 94,740,752.00|
|CYP||CYNATA THERAPEUTICS LTD||1.125||Phase 2||$ 114,620,688.00|
|OPT||OPTHEA LTD||0.695||Phase 2||$ 173,343,312.00|
|PAR||PARADIGM BIOPHARMACEUTICALS||1.53||Phase 2||$ 294,077,888.00|
|TLX||TELIX PHARMACEUTICALS LTD||0.8325||Phase 3||$ 181,789,552.00|
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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