Biotech 2008 DH

DIA - Dia-B Tech Ltd.
This company developing diagnostics, pharmaceuticals and treatments for diabetes listed in January 2005. The company has no significant income other than grants and prices had fallen 63% in 2005 suggesting that listing was premature. However there have been speculative jumps in November 05, June 06, November 06, March 07 and November 07 during a period of continuing decline. Prices down 56% in 2006 but even in 2007 with two unexplained speculative rises. Market cap of $2 million was recently boosted by fund raising but pricing down 80% in 2008 with survival of company in question. Consolication proposed hinting at entry of new business. (1/11/08)

DVA - Diversa Ltd.
Company changed its name from Ambri (ASX:ABI) in October 2008. Has absorbed intellectual property from Ambri and Glykoz as well as investments in Avastra and Xbio. Share price has fallen 67% in 2008 to market cap of $2 million. (10/11/08)

(EIF - Eiffel Technologies Ltd.)
This company has had a relatively insignificant history. However, in the latter half of 2003, share prices of the company doubled in line with the changed direction to concentrate on the advantages of supercritical fluid extraction on drug delivery. Since then, share prices have declined by over 90% as a result of lack of clear commercialisation. There was a 60% decline in 2005 and a further 39% fall in 2006 with some recovery in late 2006 probably associated with developing deal with UK company. This carried over into 2007 with a further rise, then a decline and a lift associated with a 1:1 rights fund raising and advances with partners (up 41% in 2007 and a further 4% in 2008). With a market cap of $14 million and cash reserves of $6 million following the fund raising, the company is looking for new business directions. Recent increases in share price have been related to investment in the company by the Queensland Biocapital Funds, an associated strategic review and new substantial fund raising. This has resulted in shareholder approval to offload the company's supercritical fluid technology and rename the company as Telesso Technologies which occured at end of February 2008. There was also a 1 for 10 capital consolidation in February 2008. (29/2/08)

ELX - Ellex Medical Lasers Ltd.
Ellex disappointed the market in FY2004 and FY2005 due to problems in the target markets and declining profitability. The company has now shifted focus from OEM to controlling distribution specifically in the ophthalmic laser market. This involved short term costs and loss of profitability with a view to improved long term profitability. The company has been undervalued by the market despite having good technology, significant revenues and exports. The current market cap of $13 million is very low on the basis of fundamentals now that revenues are up significantly and profitability has returned. We expected that there would be price increases in 2008 following the current downturn now that the company is buying distribution companies to improve market presence and US companies to increase market spread (up 106% in 2006 but down 6% in 2007 and down 79% in 2008 due to a double downwards revision in sales projections and replacement of CEO). Despite the downward revision in sales, this company is substantially undervalued. (21/11/08)

FER - Fermiscan Holdings Ltd.
Newly listed company investigating the detection of breast cancer through an apparent change in the structure of hair samples. Even if the test works (other research groups have not been able to confirm the findings apparently due to different sample preparation protocols), there will be questions about specificity, timeliness and cost which could affect the degree of commercialisation. As a result, the current market cap of the company is fair at $26 million with speculation driving prices (up 50% since listing at end of October 2006, down 2% in 2007 and down 82% in 2008). (20/11/08)

FLS - Fluorotechnics Ltd.
Fluorscent compound developer listed end October 2008 seven years after establishment. Gaining income from intenational licensing as well as sales. Now needs to ramp up sales to justify $24 million market value. (3/11/08)

GBI - Genera Biosystems Ltd.
Melbourne-based start up commercialising diagnostic and other tools listed in Jun 2008 and shares promptly fell 40% and eventually 66%. Revenues are still meager and market cap of $9 million is reasonable. (21/11/08)

GBL - Genesis Biomedical Ltd.
The proposed reverse takeover of the company based around intellectual property relating to Uni-ject retractable syringes set for the beginning of 2004 did not proceed and the company then proposed diversification through acquisition of a New Zealand company, Manawatu Biotech Investments which is developing fertility testing devices (not proceeding but may take up equity if fund raising) and establishing a Greek subsidiary to commercialise medical technology from Malta (not proceeding). There was a 100% price jump associated with recapitalisation of the company in February 2006 but momentum dissipated until there was a further unexplained jump in December 2006 (shares up 16% in 2006 but down 52% in 2007 and down 63% in 2008 to a market cap of $2 million). (27/10/08)

GEN - Genesis Research and Development Corporation Ltd.
Since listing eight years ago, shares in this company have fallen over 95% indicating that early expectations have not been met. The share price fall has been very constant, including a 54% fall in 2005: there was some stabilisation in 2006 (up 20%) and 2007 with a late fall (down 27%). There has been a further 55% fall in 2008 (now down 60%). The market cap of only $2 million is significantly less than the investment made and equivalent to the cash reserves. The resolution of litigation by ArborGen provided additional funds as has the sale of BioJoule. The company needs to improve revenues, reduce costs and provide more project focus but there appears to be little evidence of this. (21/11/08)

GTG - Genetic Technologies Ltd.
GTG has been an enigmatic company claiming a significant portfolio of patents in the DNA area which initially was discounted but which over time is being acknowledged by some companies as worthy of being licensed in return for fees. The success of GTG will depend on its ability to enforce its patent portfolio in the market. Shares increased four fold in the year to August 2003, but thereafter, prices fell over 50% until the September 2004 announcement of positive trial outcomes in the litigation with Applera which doubled the share price. Since that time, the prices have gradually declined then recovered before falling heavily on the announcement of a resolution of litigation with Applera which was not seen as totally positive for GTG. There has been a further substantial fall (63%) in 2007 related to an ASIC inquiry into activities of executives of the company but countered by the deal with Monsanto. There was a temporary recovery associated with the premature announcement that FY2007 would be profitable and the appointment of a new CEO. The company now has a market cap of only $22 million (prices down 15% in 2006, down 57% in 2007 and down 60% in 2008). Realisation of this value will only come with a further substantial increase in income and a shift to profitability with the first signs being the favourable FY2007 and FY2008 results although revenues are stable rather than increasing. Confusion caused by proposal by largest shareholder to dump other directors resulting in temporary drop in prices in October 2008. (15/11/08)

(HTW - Heartware Ltd.)
Company listed in February 2005 relying on US-developed ventricular assist device technology developed over the previous ten years. Route to listing in Australia was relatively rapid despite potential litigation threats from competitors. First commercial product unlikely before 2008 so speculation has influenced prices. Prices fell 30% in June 2005 with announcement of litigation with Ventracor, but this was more than fully recovered by year's end such that prices rose 50% in 2005 and a further 90% in early 2006 associated with further fund raising. There was significant negative sentiment in mid 2006 and prices fell 11% overall in 2006 although there was a lift in 2007 followed by a fall associated with raising of $30 million (down 18%). Prices again down 35% in 2008 until FDA granted conditional NDE approval which caused shares to jump followed by fund raising (now down 5%). Company value is high at $161 million following fundraising and proposal to redomicile to US. Shares suspended as part of process and move to CDI trading in November. Delisted (18/11/08)

HTX - HealthLinx Ltd.
Previously called Cryptome Pharmaceuticals, completed merger with HealthLinx in March 2006. Previous company listed in November 2003 and shares rapidly fell by 20% and then stabilised before recovering to listing level. However with the sudden resignation of the CEO, prices fell 25% then recovered, but in November 2004, prices fell about 40% with a further 58% in 2005. Merger talks culminated in the merger with HealthLinx in March 2006 and the associated name change. There has been a recent unexplained drop which was temporarily recovered with announcement of ovarian cancer biomarker trial and a further significant recovery with announcement of collaboration with Bruker Datronics. Prices fell 71% in 2006 to a market cap of $3 million but there was an increase from a low base in 2007 to a market cap of $7 million following fund raising. Company needs to show real results to support viability. Shares rose 33% to market cap of $8 million in 2007 with 1 for 5 consolidation and spin off of technology to another company. There has been a 49% drop in 2008 with questions from ASX about viability of the company and publicity on effectiveness of its ovarian cancer diagnostic (market cap $4 million, down 49% in 2008.) (27/10/08)

HXL - Hexima Ltd.
Ten year old company developing technology for genetic modification of crops to enhance resistance to insects and fungal pathogens listed in August 2007 following IPO raising $37 million. Company value of $31 million is low considering the status of the technology, the time to commercialisation to justify the value and the funds raised. Nevertheless acceptance of genetically modified crops in some states offers some promise for the future as has the recent deal with DuPont subsidiary Pioneer Hi-Bred on fungal disease resistant crops. Prices down 68% since listing and down 64% in 2008 with recoveries associated with appointment of new CEO and deal with Pioneer Hi-Bred which now becomes a 5% shareholder. (12/11/08)

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