Biotech 2008 C

CAQ - Cell Aquaculture Ltd.
This company listed in July 2005 with the aim of commercialising a land-based aquaculture system and with a number of international joint ventures under negotiation. Following listing, prices rose 40% indicating the high expectations which would have to be matched with commercial developments. Developments have been the entry into the US market, the joint venture with Delta (discontinued), the operational facility in Europe and the two joint ventures in Malaysia where construction of a hatchery has commenced. Prices down 21% in 2006 to just over par, down 25% in 2007 and down 45% in 2008 following fund raising. Company value is $14 million. (19/11/08)

CAU - CollTech Australia Ltd.
This company listed in February 2004. We believe this was premature and the company is seeking to operate in a relatively closed market for which there is little reliable market information. The long term survival of this company is in question. However there has been market support for the company and although prices fell 25% initially, this fall was recovered but prices fell 59% in 2005 associated with delays in commissioning the plant. In 2006 there was some recovery with a jump after the mid year market correction, new orders and production commencing (prices up 20% in 2006). However, there was a 64% fall in 2007 and a further fall of 47% in 2008 until the fund raising and advent of new blood enabled the prices to recover temporarily (now down 76% in 2008). The current market cap of $2 million following fund raising indicates need to gain early commercialisation now plant is completed. The current value indicates vulnerability of the company resolved only if orders become substantial and the signing of distribution agreements bear fruit. (15/11/08)

CBB - Cordlife Ltd.
Previously called Cygenics Limited - name change April 2007. This Singapore biotechnology company moved its headquarters to Melbourne to list on the ASX in June 2004. Since listing, shares fell 70%, mainly in the first half of 2005 and in mid 2006 with significant recovery since then. Shares fell 28% overall in 2006 but rose 124% in 2007. There has been a 57% fall in prices in 2008 which is of concern. The market value of the company is $26 million which is low as revenues are increasing significantly and losses are decreasing. In view of this, there is upside for the company but this may be slowed in the short term by diversification into the European market with the proposed acquisition of PharmaCell. The fact that the company is now concentrating on its core revenue generating business suggests significant upside following the current market downturn. (17/11/08)

(CCE - Clinical Cell Culture Ltd.)
In 2004, shares remained around 47¢ but in the last three months of the year dropped around 20% associated with moves of the corporate headquarters and fund raising. The move to locate the corporate headquarters in the UK closer to the main market, the fund raising in Europe, the securing of distribution in 17 countries and the positive promotion of product maintained prices during most of 2005 despite a general strong downtrend in the sector. However, at the end of the year there was a 30% drop in prices due to slower penetration than expected in Europe and a rejection of the ReCell application by the TGA in Australia. There was a further 70% drop in 2006 when approval of ReCell by the FDA was delayed (prices down 57% overall in 2006). Following substantial fund raising, the company was valued at $62 million in February 2007 (prices up 26% in early 2007) but there remained uncertainty associated with approval of ReCell by FDA and how this would affect commercialisation. A substantial revision of revenue projections for FY2007 by the company resulted in a 45% drop in prices and there was a further drop with announcement of lower sales of CellSpray than expected, leading to introduction of cost cutting, exit of CEO, reduction in staff numbers and refocussing of product strategy. Prices fell 77% in 2007 and a further 64% in 2008 with market cap at $9 million following the merger with Visiomed Group which was completed at the end of February. Company name change to Avita Medical and 1 for 10 consolidation proposed for June 2008. (25/6/08)

CGS - Cogstate Ltd.
This company listed in February 2004. General review of documentation indicates that this company listed too soon and should have undergone a further funding round before listing. Because of this, we expected shares in the company to be depressed for at least two years unless there was significant speculation in the stock. It was therefore not surprising that in the first two years prices fell 75% and the company had a market cap of only $5 million with $2 million in cash reserves and projections of increased income at the end of 2005. At this stage, the company was undervalued but if revenues could be increased, prices were expected to increase later in 2006. There was a significant increase in revenues which pushed prices up. In 2006, prices rose 91% and prices were up 5% in 2007 until an unexplained drop in June probably associated with company continuing to make losses. The company's market cap is $12 million (down 41% in 2007 and up 46% in 2008 following fund raising and major shareholding by UBC). Revenues are growing slowly and losses reducing. (19/11/08)

CIR - Circadian Technologies Ltd.
As a management and investment company, CIR has been relatively strong over the last few years as some of its investments have provided a commercial return or at least some value in the stock market. Until recently, the market cap of $31 million was supported more by net asset backing rather than economic revenue or returns and current net asset backing is $54 million following sale of Zenyth and Avexa shares. The outlook for share prices is uncertain at this stage but there has been a clear 45% decline in prices in 2005, an increase of 35% in 2006 and a 22% decrease in 2007 associated with gains from sale of Zenyth shareholding to CSL, announcements of investments and funding in new areas and collapse of Metabolic share price. The sale of Axon and Zenyth provided income and profitability but now the company will have to work on the next growth area to maintain value. This appears to be Vegenics (recently fully acquired), although this could be some time from commercialisation. Shares have declined 44% in 2008, more than the overall fall in the market and company market cap is significantly less than cash holdings. (3/11/08)

CLV - Clover Corporation Ltd.
Share price performed extremely well in 2003 with an increase from 17¢ to 71¢ and the company showed good returns. However in 2004, the share price dropped 40% and stabilised with some recovery as turnover and profits were up. This was due to an exit from the fine chemical business, loss of a key customer in Europe and increasing competition. In 2007, there was an increase in prices associated with company reorganisation and increased sales. The company has a market cap of $33 million which is low on the basis of turnover and profit. While we expected strengthening of the share price in 2005, prices fell 50% and fell a further 21% in 2006 associated with reduced earnings despite increased sales. This continued in 2007 with a fall but there has been a recent 60% recovery associated with expectations of increased sales and profitability in FY2008 which were confirmed by end of year results but general market concerns have pulled down prices (prices up 27% overall in 2007 and up 3% in 2008). (21/11/08)

CMP - Compumedics Ltd.
Following listing 7 years ago, Compumedics share price lost 80% in the first two years followed by some recovery in the next two years but a further 73% fall in 2005. The company has significant turnover and exports and was profitable in 2004. Furthermore, it has prepared platforms for moving further into international markets. However in February and again in July 2005, financial projections were revised significantly with significant losses associated with smaller margins and costs of expanding the marketing and sales effort. There was a further 43% decline in prices in early 2006 with a significant recovery in July associated with maintenance of sales levels and improved profitability in the second half of FY2006. This was followed by a 90% jump in November when market interest in the company returned after a long period. At the end of 2006, prices were up 39% for the year but fell back in 2007 with some recovery in July (down 3% in 2007). There has been price fluctuation in 2008 and prices are currently down 16%. The market cap is $18 million which is low based on fundamentals. Now that the company has announced reasonable sales levels and profitability, the outlook for the future should be greatly improved and further rises in share prices can be expected after the current stock market problems are overcome (down 16% in 2008). (13/11/08)

CMQ - Chemeq Ltd.
Share prices stabilised around the $5 mark in mid 2003 with a market cap of around $450 million based on optimistic expectations for the future. In 2004, the market had a clear dose of reality with prices falling 80% as a result of uncertainty about timelines to commercialisation, regulatory issues and cost overruns. This was combined with the need to raise more funds to cover overruns and there were subsequent questions about staff turnover and business management. The company gained conditional funding and management support from Mizuho in early 2005 and by June 2006 had a market cap of only $34 million following fund raising (down 44% in 2005 and 52% in first half of 2006). The announcement of the company meeting milestones set by recent investors resulted in a temporary price jump, but the announcement of a substantial reorganisation again pushed prices down. Announcement of a potential strategic alliance with PCAS, a specialty chemicals company resulted in a jump but a subsequent release indicating a dispute with a convertible note holder raised questions about the survivability of the company. The most recent jump was associated with the exit of the shareholding of the former Chairman and the advent of Deutsche Bank as shareholder (which has since exited). Continuing problems with the convertible note holder, a Supreme Court decision against Chemeq and failure of an appeal resulted in administrators being appointed in May 2007. Market cap is only $8 million with prices down 70% in 2006 and 60% in 2007. Administrators and receivers appointed and stock suspended. In March 2008, proposal for commercialising intellectual property released by administrators. (18/11/08)

CNN - Cardia Technologies Ltd.
Diversified company which was probably not providing sufficient resources in any area and is now addressing this by reducing presence in biotechnology and emphasising work of its subsidiary Aquenox which it is now seeking to list. Had mediocre performance during 2003, prices fell 50% in 2004, fully recovered in October then fell 66% in 2005 but rose 217% in 2006 and 16% in 2007. There has been a 79% fall in 2008. With a market cap of $5 million, the company value is fair and any increase in this value will depend on commercialisation of Aquenox associated with its listing. (3/11/08)

COH - Cochlear Ltd.
Despite Cochlear's domination of its markets, share prices had been falling since peaking in December 2001and levelled off at $21 by the beginning of 2004. However there was a clear 81% growth in 2005 (including a downturn associated with a market correction). The outlook for 2006 had been for slower growth than in the past with continuing profitability but positive financial results and the acquisition of Entific of Sweden promised more for the future. However, the upward trend was halted by a market correction and less than positive reception of FY06 financial results. Growth in the share price recommenced following this. However reporting of record half yearly results in February 2008 resulted in the share price dropping indicating the sanguine state of the market. The market cap of $2.8 billion is reasonable if low and with good financial year results, prices rose 27% in 2006, 29% in 2007 but have fallen 33% in 2008. Once current market conditions pass, prices should more than recover as latest financials are very positive. (21/11/08)

CSL - CSL Ltd.
The company completed acquisition of Aventis Behring blood products business and this is covered in more detail by other analysts. The company has also divested its Animal Health and JRH Biosciences businesses. The fundamentals of CSL are such that a significant share price increase was expected during 2004 and there was an increase of over 50%. We expected this to continue in 2005 with a greater focus on the high value blood fraction and pharma sectors and shares rose 45% with significantly improved turnover and profits. This continued in 2006 spurred on by improved trading in the plasma therapies market and improved profitability outlook leading to prices rising 54% in 2006. The merger with Zenyth Pharmaceuticals was completed with little significant impact on price. There was a further 67% increase in 2007 despite a temporary dip associated with unfavorable publicity about the Gardasil vaccine. Prices down 17% in 2008 following announcement to acquire Talecris Biotherapeutics, positive FY2008 financials and successful fund raising for the Talecris acquisition. Company market cap is $18.2 billion. (21/11/08)

CST - Cellestis Ltd.
Following market listing in April 2001, CST had a meteoric rise to $2.70 within months. Following this, the share price gradually fell except for the market lift in August 2003. There was an 88% increase in share price in 2004 in expectation of product registration in Japan and the US and this expectation maintained prices around the $3 level in 2005 although there was a 25% decline in 2005 with a full recovery associated with positive developments in Japan and the US and a temporary rise in 2006 followed by a rise against the market correction in June 2006 and a subsequent fall. We expected prices to stabilise in 2006 as in our view they had reached their limit. Prices declined 19% in 2007 and a further 32% in 2008. The company has a good if very limited product range and the market cap of $202 million is high. (15/11/08)

CTE - Cryosite Limited
Since listing in May 2002, shares have drifted downwards as company is operating in a limited niche with an expectation of slow but steady growth after one or two years. Company has carved out a clear but relatively unexciting niche and was expected to grow slowly over next 2-5 years. Shares increased in line with increased optimism in the market after June 2003, but prices fell 35% during 2004 and 15% in 2005 despite the bearish market due to announcement of contracts with Bristol Myers and Pfizer. Prices have remained more or less the same in 2006 and 2007. The current capitalised value of $4 million is very low and we expected some growth in the share price in line with improving financials and continuing profitability but there appears to be a lack of faith in the company. Prices down 51% in 2008 but this company has potential for price increases. (10/11/08)

CUV - Clinuvel Pharmaceuticals Ltd.
Name changed from Epitan in 2006. This company did not really shine in the two years since listing in 2001. However, the market lift in August 2003 combined with promising press releases quadrupled the share price. This was maintained and there was even a further substantial increase in April 2004 and another temporary 20% increase in October/November 2004. We considered that the optimism was premature and there was a 63% decline in 2005. However there was a speculative 113% rise in 2006 but shares fell 52% in 2007, attributed to difficulties of a major shareholder (now exited). There have been some oscillations in 2008 (now down 32%). The market cap of $71 million following a number of substantial placements is still a little higher than warranted for this stage in the commercialisation cycle. (14/11/08)

CXD - CathRx Ltd.
Previously called Advanced Metal Coatings. Listed in October 2005 at a premium and although current revenues consist of grants and interest, value doubled in November 2006 due to high expectations for commercialisation of the company's cardiac catheters in the North American and European markets. Management of listing of the company and its profile in the market has ensured that company value was initially maintained then increased (prices up 108% in 2006) but there has been an easing in 2007 (up 6%) and a serious decline in 2008 (down 74%). Current market cap of $30 million is reasonable but will have to be matched with significant income in the near future. (12/11/08)

CXS - Chemgenex Pharmaceuticals Ltd.
Previously called AGT Biosciences. Chemgenex's share price has shown some resilience beginning with the market lift in July 2003. There was a further 50% jump in November 2004 followed by an erratic decline to a long term trend around 50¢, with a subsequent temporary increase to 78¢ associated with a NASDAQ listing. The merger with the US company ChemGenex Therapeutics as part of a move into the US market, clinical trial progress with the drugs of this company and the NASDAQ listing maintained the value of the company. In early 2006 there was a significant decline in value with a 42% fall associated with a capital raising and market correction with a temporary turnaround in July 2006 because of problems with a competitive product and a significant recovery thereafter associated with increasing expectations for rapid commercialisation of Ceflatonin. Prices level overall in 2006 but in 2007, there was a 75% price rise associated with the exit of Charter Pacific and the entry of Alta Partners and GBS Venture Partners to the share registry together with further capital raising lifting the market cap to $196 million in 2007 which in our view was high. Company is spinning off Verva Phamaceuticals to merge with Adipogen with listing in 2008 (delayed) and this has reduced losses for remaining company. Prices have fallen, recovered and fallen again in 2008 (down 55% following deal with Stragen which takes up 16% of company and further capital raising) with market cap of $113 million. (22/11/08)

CYT - Cytopia Ltd.
Previously a pooled development fund having limited success and moved to concentrate on one investment in 2004 with some improvement in share price. This has been supported by board changes, a fund raising and a shift into the US market with a small acquisition there. Prices rose 27% in 2005, fell 25% in 2006, fell 17% in 2007 and have fallen 67% in 2008. Market cap is currently $15 million compared to cash reserves of $11 million. (19/11/08)

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