Biotech 2008 A

AAH - Arana Therapeutics Ltd.
Name change in November 2007 resulted from merger of Peptech and Evogenix. Company's share price had been consistently declining over the three years to mid 2004 with the occasional precipitous fall and recovery associated with uncertainty about the enforceability of patents. Royalty income was piecemeal and had not justified the market cap of $205 million. Other than royalty income from one class of products, Peptech as it was then called had little future so it was not unexpected that it was actively seeking diversification and was cashed up to this end. A proposed merger with Agenix did not proceed, but Peptech required a merger with a biotechnology company or some other diversification to provide a future, hence its discussions with Genera Biosystems and its emphasis on investments in Domantis and Biosceptre. The arrival of a new Managing Director and the engagement of a VP Business Development assisted the drive for acquisitions resulting in the acquisition of Promics and in the UK, assets of Scancell. The sale of Domantis in which Peptech had a 31% share resulted in a share price jump and provided funds for progress of pipelines of Promics and Scancell and further acquisitions. Company also listed on AIM. Shares up 18% in 2006 and expectations for further acquisitions using funds from sale of Domantis holding pushed prices up in 2007 culminating in the announcement in May of a proposed merger with EvoGenix which resulted in a 21% fall in prices. Prices down 29% in 2007 and down 29% in 2008 with market cap for the merged company of $193 million which was renamed Arana Therapeutics in November 2007. Animal Health Division was also sold in 2008. (17/11/08)

AAQ - Australis Aquaculture Ltd.
Aquaculture company listed in August 2004. The company had ambitious plans for growing barramundi fingerlings in New York State for the North American market. The company commenced sales in 2005. Share prices increased 50% on listing, stabilised then increased a further 70% in February/March 2005 in expectations of substantial sales being made with subsequent gradual decline in value to the price at beginning of year. Commercial revenues rose in 2006, but slower than expected and current production is fully sold with output now doubled. Prices rose 42% in 2006 but fell 31% in 2007 as a result of fund raising with revenues increasing slowly and has dropped a further 56% in 2008. The company has a market cap of $16 million which is based on expectations of rapid conversion of the current fish stock into commercial product. Shares have been impacted by the market downturn in August 2007 and in 2008 and slow revenue growth is of concern. (16/11/08)

ABI - Ambri Ltd.
Since listing in June 2000 at over $2, Ambri has suffered a significant lack of confidence with a fall in prices to below 5¢ due to delays in commercialisation of key products and some upheaval in management. Commercialisation was projected for the second half of 2004, but the SensiDX technology was dropped in favour of a new biosensor technology and this delayed projected market entry considerably with additional downward pressure on prices. Share prices fell to an all time low of almost 3¢ in 2006 indicating shareholder concerns about commercialisation. Timelines to commercialisation remained critical for price trends. Ambri had indicated that the first 6 months of 2006 were critical for determining the company's survival and was assessing prospects for mergers and acquisitions. The decision of the licensee BEL to discontinue development of the technology and the sell off of Dow Corning's shareholding added further pressure for positive developments to enable survival. The share price fell 51% in 2006 to a market cap of $7 million but an unexplained jump in share price suggested that a merger opportunity was in the air, culminating in the proposal to absorb Glykoz with the advent of Queensland Investment Corporation as a substantial shareholder. The share price fell 24% in 2006, 58% in 2007 and 33% in 2008 and the market cap is $4 million. The technical staff and facilities for the sensor technology have gone, licensed to a company set up by former Ambri employees. The company has shifted to Queensland and recent board changes and investments indicate the company is preparing to change direction.Company name changed to Diversa (ASX:DVA) in October 2008 (1/10/08)

ACG - AtCor Medical Holdings Ltd.
Ten year old company which listed in November 2005 with annual revenue of $4 million from sales of blood pressure profile diagnostic equipment. There were high expectations for growth of the company as share prices initially rose but shares fell 60% in 2006. However, there was market interest in the stock and with announcement of significant sales growth in early 2007, there was a temporary 10% lift in shares. The company is now valued at $15 million with sales growing slowly. Now that the company has a growing base in major markets and now has US-based CEO, value of company was expected to increase in 2007 but the market appears to have lost confidence in the company although there has been a sharp jump in late 2008 with expectations of increased sales (down 53% in 2007 but up 63% in 2008). (18/11/08)

ACL - Alchemia Ltd.
Alchemia listed just before Xmas 2003 and the price rapidly fell from 75¢ to 60¢ and then more slowly to around 45¢. However in mid June 2004, due to speculation, there was a run on stock which resulted in a 50% price increase. In October 2004, there was a further 50% jump associated with technology development announcements and associated speculation. Following this there was a gradual relaxation of prices to around the pre October 2004 levels and a gradual then rapid rise to around $1.20 (up 51% in 2005) and maintenance at this level in early2006 associated with the absorption of Meditech Research. There was a significant decline up to September 2006 associated with the reassessment and eventually termination of the relationship with APP. However, since then, there has been some uncertainty (down 33% in 2006 overall and down 42% in 2007). We consider that the current market cap of $28 million following recent substantial fund raising and the merger with Meditech is a little high for a company still reliant on government grants (down 75% in 2008). (15/11/08)

ACR - Acrux Ltd.
Acrux listed late September 2004 having already passed through two funding rounds. The technology is good and well supported with good potential for commercialisation. On listing the price fell 10% immediately and stayed at around this level followed by another 40% fall in April 2005 and some recovery. Announcement of positive Phase 3 trial results led to a 28% jump in 2006 which was wiped out in market drop of June followed by further rises as there were signs that the licensing stream was increasing with the licensing to Organon and milestone payments becoming significant. Market cap is $91 million following substantial fund raising (up 17% in 2006, a further 84% in 2007 but down 59% in 2008 - affected by the Opes Prime and broader stock market declines). (14/11/08)

ACU - Avantogen Ltd.
Previously called Australian Cancer Technology, the company had a market cap of around $20 million at the beginning of 2004 which in our view was too high. However there was a rapid increase in stock prices in February 2004, a dip and then a further increase to a value of $50 million associated with proposed NASDAQ listing and the acquisition of assets of Regalen (then Galenica Pharmaceuticals), part of the plan to move into the US market. The company's pressure for diversification and the move into the US market was kept up, combined with additional fund raising overseas. Share prices have fallen 70% since their high in June 2004 (66% in 2005), but company value was partly maintained with investment alliances and value was given a temporary fillip with appointment of new CEO (now departed) and a new joint venture in the US. However, in May 2006 the delayed announcement of an inadequate response to the Pentrys vaccine in a trial resulted in a 55% drop in prices. The value of the company at $11 million was still high relative to fundamentals with the likelihood of further downwards pressure on prices (down 54% in 2006). Shares were suspended in September 2006 followed by an off market bid for the company valuing it at 40% of the above market cap. Announcement of lack of funds in October has eventually led to issue to raise $4.5 million but ASIC imposed a stop on the associated prospectus which was revoked in May 2007. Recently announced deal with SciClone Pharmaceuticals offers some potential for commercialisation of company technology. Company recommenced trading on ASX in October 2007 and after a flurry of activity, shares rose 20% in 2007. There has been erratic activity in 2008 with little sign of value despite a market cap of $24 million (down 34%). (15/11/08)

ACW - Actinogen Ltd.
Another biotechnology company in Western Australia listing without clear justification. Share prices have fallen over 90% since listing indicating general market attitude. Company market cap is $2 million (down 83% in 2008). (12/11/08)

AGX - Agenix Ltd.
Beginning around May 2003, the company's share price started increasing and this continued throughout the year with maintenance of value after September, when the prices of other small companies fell. There was a further steady increase in price from February 2004 and this culminated in the announcement of a proposed merger with Peptech Ltd. Following the announcement, share prices fell over 20% and shares continued down when the merger did not proceed despite an attempt to talk up the market with forecasts for ThromboView. Shares fell 47% in 2005, partly associated with fund raising, and a further 48% in 2006. There was some stabilisation in 2007 then growth with speculation on a Chinese acquisition (up 67%). The market cap is $7 million with new fund raising, animal and human health asset sales and sale, re-lease of premises to assist ThromboView development and the acquisition of a Chinese company. The outlook of the company is uncertain with lack of shareholder support as indicated by a 40% drop in 2006 but there was a 100% speculative rise in 2007 (up 26% by end of the year but down 90% in 2008). An honest reappraisal by the company of its Thromboview strategy offered some hope for the future although the advent of a new shareholder is forcing eventual divestment of this project into a US-based vehicle. The acquisition of a private Chinese biopharmaceutical company offers some new blue sky although there are also significant risks associated with this strategy as indicated by recent concern about lack of movement on finalisation of Chinese acquisition which has led to price fall, removal of Chinese executives and resignation of Chairman and two directors. This has not been helped by litigation against former Managing Director. Shares currently suspended. (21/11/08)

ALT - Analytica Ltd.
This company has had a chequered career since listing in 2000. 2003 was a year of consolidation with minor changes in price. Two acquisition prospects were considered in medical devices area with one being followed up in 2004 in retractable syringes - a difficult market. The diagnostics business was also sold in 2004. Market cap value of $7 million, a 52% fall in 2005, 25% in 2006 and 41% in 2007 and up 63% in 2008 indicates there is currently not much substance in this company yet and the move into the retractable syringe industry has significant risks, not helped by the departure of the Chairman and Managing Director. Acquisition of Recovery Clinic offers some blue sky potential. Reason for recent rise is not yet clear. (18/11/08)

ANP - Antisense Therapeutics Ltd.
Following its listing 6 years ago, shares drifted down 75% as it was known from the outset that commercialisation of the company's products would take some time. The shares were given a fillip in August 2003 as part of an overall boost in biotech stocks and, surprisingly, prices remained high for a while before gradually declining. However the announcement in March 2005 of complications with a competitor's product directed at the same target led to a sharp 60% drop and some temporary recovery associated with reinitiation of clinical trials, although a proof of concept study which indicated limited effect has reversed this (down 71% in 2005). In 2006, recommencement of a clinical trial and a proposal for refinancing of the company resulted in an improvement (100% in five months to end January 2007) and prices were the same as at the beginning of 2006. There was a modest 5% price rise in 2007. In 2008 there has been a 100% increase due to the deal with Teva Pharmaceuticals and positive trial results (now down 17%). The market cap of the company is $20 million which we consider is reasonable in view of cash reserves of $6.4 million and is driven by future expectations now that Teva has made milestone payments. (20/11/08)

ANX - Anadis Ltd.
Shares bottomed in March 2003 and quadrupled following that, although they fell 19% in 2005 (partly as a result of a capital raising) and 27% in 2006. This continued through into 2007 with a further 66% decline to a market cap of $10 million. This lack of momentum may have been the cause of the exit of the CEO. Uncertainty remains about the viability of the company but speculation over laboratory results appears to have led to a brief 50% jump in prices in early 2008 but prices are now down 49% with market cap of $6 million. Expectations of a substantial increase in contract manufacture did not transpire with failure of client resulting in amounts owing that may not be recoverable and this eventually led to the sale of the manufacturing business. (13/11/08)

AOP - Apollo Life Sciences Ltd.
Listed at end of June 2005 at a 54% premium and rose to $1 before dropping to par and then a 40% lift associated with entry of high profile investor. In our view the company was listed before a significant business case was established and as a result the company was overvalued initially. We expected that once initial euphoria dissipated, there would be a significant price fall and this has occurred (up 11% in 2006 following fund raising but down 60% in 2007 and down 78% in 2008). The company was gaining increasing profile with development of its transdermal technology and human expressed proteins as well as the release of retail products in early 2008 but release of half yearly results in early 2008 raising questions about going concern resulted in a severe fall to a market cap of $8 million. Company has announced lack of investment interest has resulted in a cost cutting exercise and possible sale of non-core assets with the licensing of research proteins business being the first development. Proposed refinancing did not eventuate and company went into administration at the end of October. (31/10/08)

AOS - Advanced Ocular Systems Ltd.
Listed as Regenera at 50¢ in 2004 and merged with US company Advanced Ocular Systems Inc. at end of 2005. Following the merger, the share price dropped almost 50% followed by a slow recovery and a dive in 2006 and some subsequent recovery. Prices declined 77% in 2006 and a further 29% in 2007 with the company valued at $16 million. The company has a substantial intellectual property portfolio some of which has been licensed to leading international companies and is beginning to provide a substantial revenue stream. However the significant drop in value in 2006 and 2007 was of concern and the market cap did not appear to reflect earning capacity of patent portfolio which should support a significant increase in revenues. Due to lack of funds, company was expected to suffer short term pain with the medium term outlook more promising. Uncertainty was associated with suspension of share trading which was related to a share placement and reorganisation with an associated sell of of some of the company's intellectual property. On relisting, prices have fallen (down 70% in 2007 and down 87% in 2008 with company value of $2 million following fund raising). Proposed sale of intellectual property to Singapore company fell through due to deteriorating financial conditions leading to fall in price further exacerbated with reduction in royalty earnings outlook due to advent of competitive products in market. Company appears to be preparing for change of direction. (31/10/08)

AQL - Aquacarotene Ltd.
This company has a moribund business and it is surprising that it is still alive. While the company has a market cap of $2-5 million, any value attributed would be optimistic. The company was marginally profitable in FY2005 but not in FY2006: prices were stable in 2005, declined 31% in 2006 and 42% in 2007 associated with further fundraising and sale of property. The recently announced wholesale change of management offers some future. Prices down 29% in 2008. The company's interest in algal production to produce biodiesel is well placed but significant resources will be required to commercialise this area. (10/11/08)

AVH - Avita Medical Ltd.
Previously called Clinical Cell Culture Ltd. and formed in 2008 from merger with Visiomed Group Ltd. Previous company affected by uncertainties associated with gaining FDA approval for product in 2007 followed by downward revision of sales projections. 77% share price decline led to cost cutting and change of management followed by merger with Visiomed, share consolidation and name change. New trading commenced in late June 2008. Shares down 86% in 2008 with market cap of $4 million which is less than current cash holding and revenues are increasing significantly. (2/11/08)

AVS - Avastra Sleep Centres Ltd.
This company, set up by surgeons to commercialise various surgical developments including a technology for rejoining blood vessels, listed at the end of June 2004 and share price rapidly fell about 30% temporarily recovered but fell 74% in 2005 related to suspension of clinical trials associated with results from long term animal studies. Change of management and departure of interim CEO had an unsettling effect eventually leading to a change in direction of the company with licensing out of the original technology and acquisition of US sleep disorder centers. Shares rose 132% in 2006 following suspension and reinstatement and a further 22% in 2007 but have fallen 94% in 2008 with necessary fundraising proving difficult. Market cap of $3 million is very low as revenues have increased substantially but there appears to have been cost overruns leading to a price drop which is cause for concern. Chairman resignation and spill of the Board indicates an unfolding story where funds are short and additional funds are being sought to cover continuing losses. FIrst quarter FY2009 results very encouraging. (2/11/08)

AVX - Avexa Ltd.
This company had barely snipped its umbilical with AMRAD in September 2004 and was already raising extra funds for clinical trials. Initially share prices fell 30% and were kept at this level by the subsequent fund raising. However there was a 45% fall in 2005 with subsequent recovery associated with high expectations for its anti HIV/AIDS drug licensed from Shire and actually rose 30% overall in 2005 and remained steady in 2006 with a drop associated with the related merger between CSL and Zenyth Therapeutics and a recovery associated with a development deal with a Chinese company and progress in clinical trials with elevated expectations for commercialisation of apricitabine. The recovery continued into 2007 with an 80% increase in 2007 and an associated $89 million capital raising. The company is bolstering its position with collaborations with a number of groups in Australia and overseas and fund raising. The company has raised funds and market cap is currently $51 million of which $33 million is cash (prices down 78% in 2008). (18/11/08)

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