Biotech 2008 QZ

QRX - QRxPharma Ltd.
Five year old company listed in May 2007. Biopharmaceutical development company commercialising technology for treatment of pain and control of bleeding. Since listing, prices have fallen 77% (down 66% in 2008), market cap is $29 million. (18/11/08)

RBY - Rockeby Biomed Ltd.
Company listed in December 2003. The listing was premature given the limited commercial products available and the stock price drifted down 95% in 18 months of trading and 76% in 2005. However, an announcement in November 2005 of a deal to market avian influenza kits caused a speculative jump in shares. This was followed by a fund raising effort to cash up the company. There was a further decline in share price in 2006 (32%) following the decline in 2005 (down 27%). There was a further fund raising in 2007 and current market cap is $1 million (down 24% in 2007 and down 95% in 2008 as a result of a linkage to the Opes Prime problems and declining sales). The company needs to increase sales for credibility and eventually survival which is being extended by recapitalisation plan. (12/11/08)

RHT - Resonance Health Ltd.
This company has invested so far in Inner Vision Biometrics which is expected to provide only a modest income for some years. However FDA approval for the company's diagnostic provided a short term fillip in early 2005 with a 20% price jump against the downwards sector trend. Introduction of a new strategy to develop business in the US market has not been successful and company has returned to single revenue income. However, while IVB provides modest revenues, it is now profitable. Company value is $4 million following falls of 30% in 2005 and 78% in 2006 associated with fund raising, market correction and shareholder dissatisfaction. With refocussing of company, prices fell 35% in 2007 and 33% in 2008 with the bright lights being a continuing contract with Novartis and improving financials such that the company is now profitable. (1/11/08)

RMD - ResMed Inc.
Shares in the company took a hit in late 2001 with falls from over $10 to under $5. This was followed by patchy but clear improvement to the $6 level (62% increase in 2005 and a 2:1 stock split and even in early 2006). However on release of financials in 2006, there appeared to be a shift in expectations for the company and the share price appears to have stabilised at a lower level of around $5.40 with subsequent growth. The fundamentals of the company are good with substantial turnover and high profitability. The company currently has market value of around $4.3 billion and if continuing positive results are recorded, prices should continue rising (up 21% in 2006 but down 6% in 2007 and down 8% in 2008 with a fillip following latest record earnings). Recent declines have been due to a product recall that has affected profitability of the company and the downturn in the overall market. (16/11/08)

SBP - Solbec Pharmaceuticals Ltd.
The company began 2004 optimistically, but during the year interest gradually declined bottoming in October before there was an 80% jump associated with overpromotion of preclinical laboratory results. However, it is hard to get excited about the stock yet as clinical trials have barely started and preclinical trials have been open to some question. The company had set itself the target of negotiating a licensing deal by March 2006 which passed without comment and the share price is likely to wander until there is a licensing arrangement as the company has limited funds for further development and trials. There was some speculation and fund raising which caused a temporary jump in 2007 (down 13% in 2007: a recent jump followed expression of interest by FDA in technology). The company has a market cap of $3 million following fund raising and apart from recent speculation, share prices are likely to be under downward pressure until a deal is reached (down 44% in 2005, down 54% in 2006, down 13% in 2007 and down 69% in 2008). (13/11/08)

SHC - Sunshine Heart, Inc.
Heart augmentation device company based in US listed in late September 2004. The company has some advantages compared to standard heart device companies and is focussing on a slightly different market. It will be interesting to see how the market handles this. Shares listed at a premium and since then slipped 70% (down 58% in 2005 and level to mid 2006) to 40% of the prospectus price with a steep drop associated with early termination of second implant due to infection. However with the raising of funds for clinical trials and indications that the FDA is positively disposed to trials in the US, there was a 40% jump at the end of 2006. Prices up 40% in 2006 overall but down 39% in 2007 and 57% in 2008 with market cap of $19 million following fund raising. Recent jump in prices due to FDA approval for clinical trials. (21/11/08)

SIE - SciGen Ltd.
Predominantly a distributor in Asia of biotechnology products, this company has had a lacklustre performance since its listing at the end of 2002. Shares fell 30% in 2004 before recovering half of that loss and declined again until the deal with Bioton of Poland stabilised prices. However, there was a big jump in October 2005 with finalisation of a deal to distribute its hepatitis B vaccine in China, a move by Bioton to take up over 90% of the company (achieved) and a joint venture to establish production facilities in China. The company has a market cap of $37 million associated with speculation around the developments (down 14% in 2006, up 11% in 2007 and down 27% in 2008). (26/10/08)

SLA - Solagran Ltd.
Quirky company drawing on technology from Russia. There has been little of substance presented on this company as clinical trials in Australia have only just started and any investment would be highly speculative at this stage. Since listing in September 2003, prices fell by over 60% to July 2004 with a subsequent 40% recovery and then a 50% jump in November 04 associated with completion of phase II clinical trials in Russia and a distribution agreement with Cardinal, followed by a gradual 44% decline and recovery in 2005 and early 2006 associated with approval of Ropren in Russia which finally occurred in July 2007. In terms of substance, the nature of the company and its products are very hard to interpret until trials are completed in Australia or the US. The current market value of $32 million is reasonable with respect to fundamentals with revenues are still minimal. There was a speculative jump (up 97% in 2006) associated with preliminary results for trials by Swinburne University and activities overseas and a further 242% increase in 2007 associated with distribution agreements and clinical trials in Russia, information on trials in Australia, the deal with Bioprospect Ltd and registration of Ropren in Russia. The company still needs to gain revenue and carry out further trials in Australia to provide credibility. Shares were down 76% in 2008 as a result of fallout from collapse of Opes Prime but rose in August after ANZ Bank completed selling its share holding arising from Opes Prime. Shares down 84% in 2008 overall. (21/11/08)

SLT - Select Vaccines Ltd.
This company listed before it had gained any substantial revenue and as a result, the steady downward fall in prices by over 60% from September 2003 to June 2004 was not surprising. However the development of licensing opportunities since then resulted in a doubling of value and prices oscillated around 50¢ in the latter half of 2004, but fell 77% in 2005 associated with a private placement, a lack of commercial results and a rights issue and fell a further 83% in 2006 associated with further fund raising. There was a recovery in 2007 associated with the deal with and investment by Avant Immunotherapeutics but by year's end this was reversed when Avant withdrew as a result of a merger (up 19% in 2007). The company is valued at $2 million and still has limited prospects so increasing licensing opportunities is key or mergers with or acquisitions of other companies will be necessary. Prices down 76% in 2008 and new Managing Director has arrived. (27/10/08)

SOM - Somnomed Ltd.
Company listed in August 2004. The company appears to have a limited range of products and the commercial potential of these does not appear to be great. Share prices were 60% below listing price and had dropped 60% in 2005 until the announcement of FDA approval for sales in the US raised prices temporarily around 50%. They were down 60% overall in 2005 and 88% in 2006 but there was an unexplained temporary jump in early 2007 and then a 40% jump with announcement of improved trading in first half of year (down 5% in 2007). Following substantial fund raising and cost cutting, the company is valued at $15 million and the company will now need to demonstrate significant commercialisation to survive (down 5% in 2008 - with improving revenues and profitability of US operations). (13/11/08)

SPL - Starpharma Holdings Ltd.
It is hard to get excited about this company as testified by a downward trend in share price since listing in 2000 until early 2003. Nevertheless, share prices trebled in 2003 and were stable in 2004 but fell 36% in 2005. There was a temporary jump in 2006 associated with fast tracking of VivaGel by the FDA but overall in 2006, there was little change in prices. Potential strength lies in its investment in a US company and the eventual acquisition of this company made sense. We consider that a market cap of $43 million is reasonable given annual revenues of $9 million (predominantly government grants) and annual losses of $7.5 million. Following speculation, recent awards and recent ADR program, the share price is reasonable (down 16% in 2007 and down 39% in 2008). (13/11/08)

SRX - Sirtex Medical Ltd.
Sirtex showed a dramatic increase in price at the end of 2002 associated with commercialisation of its technology commencing. Since that time, the company has been the subject of an unsuccessful takeover bid, has significantly increased turnover and reached profitability. While there may be some questions about future directions and products for the company as its current market appears limited, fundamentals would suggest that the market cap of over $200 million at the beginning of 2004 was high and the decline in share price since then supports this. As the company has increased turnover significantly and has achieved profitability, it has good prospects if it can diversify into the associated breast cancer market as recently reported. Prices increased 25% in early 2006, despite the litigation with University of Western Australia and a cross claim between Sirtex and its founder which caused a drop in August 2006. As revenues have increased and the company has returned to profitability, prices rose 35% in 2006, up 67% in 2007 but down 29% in early 2008. The litigation with UWA was resolved in favour of Sirtex leading to a temporary 20% bounce in share prices with a further decline associated with marginal profits for the year and continuing petty legal issues. Market cap is $107 million (down 57% in 2008). (20/11/08)

STC - Stem Cell Sciences Plc .
Company with dual listing on AIM and ASX with latter listing commencing in March 07. Over ten years after establishment, company has operations in Europe, USA, Japan and Australia but revenues are still modest and losses significant. Company currently has market cap of $6 million and prices have declined 80% since listing in Australia. Prices down 69% in 2008. (19/11/08)

STI - Stirling Products Ltd .
Relisting of a former oil company now commercialising feed enhancers for livestock industry and products for companion animals. The company listed a little too early in its development cycle as trials had barely started so short term downwards pressure on prices were expected. However, prices doubled in three months to a peak of 60¢ in January 2005 due to heightened expectations for the results of field trials, particularly on pigs in the US. Prices fell 58% in 2005 with some recovery due to good results from US pig trials and chicken trials and an agreement with a South African company to fund trials. Prices declined by 53% in 2006 due to lack of trial progress with some recovery at the end of the year due to new trial expectations, a new agreement with Merial and a new manufacturing arrangement. There was a temporary 16% increase in early 2007 associated with positive trial results in beef cattle and horses and potential for application of its feed enhancer to aquaculture as well as new arrangements in North America culminating in the acquisition of Progressive Bioactives Inc. However by year end prices had fallen 45%. In early 2008, there has been some price oscillation associated with fund raising and proposals for trials in Chile. There has also been some positioning in niche markets through feed additive and diagnostic arrangements but returns will depend on market and sales promotions. Prices are currently down 88% following announcement of distribution and manufacturing arrangements, a milestone payment and a move into thecompanion animal sector. However, commercially significant levels of revenue are only just starting to appear and company continues to languish with market cap is $1 million which is very low and limited funds. Company is positioning itself for future growth which will depend on effective implementation of commercial strategies and access to funds to support growth - difficult in the current environment. (19/11/08)

TDX - Tyrian Diagnostics Ltd.
Originally Proteome Systems and name changed in November 2008. Company proved itself before listing but there were problems in company value on listing in late 2004 followed by a dramatic fall on list price. The company has sufficient depth and geographic spread to support significant value and we would have expected some price rise in the short term but this did not happen and up to mid June 2005, prices declined over 80% between listing and mid 2005. However the announcement at Bio2005 of funding from Gates Foundation for a rapid tuberculosis test resulted in a 150% jump in the share price with a subsequent slow decline. The company moved to reduce costs and increase its international marketing profile to drive value higher and changed top management. It has also exited therapeutic development and is now concentrating on diagnostics alone associated with the name change. The company has a market cap of $12 million which is reasonable (prices even in 2006, down 28% in 2007 and down 76% in 2008). (18/11/08)

TEO - Telesso Technologies Ltd.
This company had a relatively insignificant history under its previous name of Eiffel Technologies. In 2003, a change in direction to concentrate on supercritical fluid extraction resulted in share prices doubling followed by a long term decline over a number of years due to lack of clear commercialisation. By 2007, the company raised funds and looked for new business directions with the involvement of Queensland BIocapital Funds and an associated strategic review. This resulted in shareholder approval to offload the company's supercritical fluid technology, rename the company as Telesso Technologies and undertake a 1 for 10 capital consolidation in February 2008. In 2008, prices have fallen 83%: market cap $2 million. (8/11/08)

TIS - Tissue Therapies Ltd.
Listed in March 2004 without significant track record and with negligible business. This company was listed too soon and the shares have been subject to speculation which initially raised prices 50%. Since then, prices have fallen below listing price. Prices fell 24% in 2005 and 23% in 2006. Further declines were expected. However the announcement of an exclusive deal with Invitrogen Corporation in early 2007 resulted in a temporary lift in prices in 2007 and a further lift following announcement of three significant government grants with the expectation for some improvement in revenues in 2008. Prices down 35% in 2007 and down 73% in 2008 with market cap of $4 million and limited funds. (16/11/08)

UBI - Universal Biosensors Inc.
Listed in December 2006 with good pedigree and as a result shares jumped 170% on listing and are now up 40% ( up 32% in 2007 including an unexplained jump in June 2007 and a further jump in October associated with continuing developments with Lifescan) and fund raising. There is significant speculation pushing prices and it remains to be seen how quickly commercialisation can match the current market cap of $86 million (down 63% in 2008). It would appear that value is affected not only by market downturn but also fact that company is falling behind projections for commercialisation (8/11/08)

UCM - Uscom Ltd.
Listed in December 2003, shares in the company dramatically increased in April, peaked and declined, levelling off at about $2.70 before jumping up to over $3 in October 2004 and a 70% decline since then to more than 50% below the listing price (down 66% in 2005). We expected the share price to stabilise in 2006 but as sales were slower than projected, prices declined initially, but there was a late jump in prices possibly associated with speculation on future sales (up 25% in 2006). In 2007, there was a 73% fall in prices followed by a partial recovery and then a further fall with an unexplained recovery (up 15% in 2008). The company has a market cap of $11 million four years after listing with revenues still limited. (31/10/08)

UNI - Unilife Medical Solutions Ltd.
Since its launch five years ago, the stock in this company has been over-hyped and has suffered as a consequence. This has been noticeable in the 90% gradual decline since December 2003. With a market cap of $44 million and share prices which have fallen 65% in 2004, a further 51% in 2005, 44% in 2006 but stabilised and recovered in 2007 (up 53%), this stock is still at an elevated level and prices rose a further 33% temporarily in 2008 associated with a deal with sanofi-aventis which is now bearing fruit. Licence fee payment has meant company is profitable but shares are still down 38% in 2008. (12/11/08)

VCR - Ventracor Ltd.
Shares in this company showed a steady rise from 60¢ in September 2002 to over $3 in August 2003 but declined to 55% of that level by June 2004 when prices again increased as optimism in the technology and its commercialisation increased. Following October 2004, prices fell over 50% before recovering again. The company has good technology and the announcement that the company is receiving revenue from sale of units used in clinical trials is very positive as well as the announcement of CE Mark approval and trials in the US which are progressing successfully. The company has a market cap of $26 million and this is supported now by substantial sales but the market does not appear to be supporting the share price. Prices fell 20% in 2005, 12% in 2006 associated with share issue raising $52 million and market correction, down 45% in 2007 associated with capital raising and down 86% in 2008 despite positive financial results). Company is gaining revenues and despite losses associated with current stage of development cycle, there is good potential for prices to increase once value of company is recognised by the market. (15/11/08)

VHL - Virax Holdings Ltd.
Virax suffered a 60% fall in share price with the announcement in February 2003 that one of its HIV vaccines did not elicit an immune response. The position was recovered by March 2004. However, the Virax portfolio was said to be in a building phase and this resulted in downward pressure on prices: there was a 67% fall in 2005 and a further 48% loss in first half of 2006 with a later recovery due to some heightened expectations (false hopes?) for clinical trials (up 31% in 2006 overall), a 56% decline in 2007 and a 64% fall in 2008 despite a recent jump with approval for clinical trial in South Africa. In our view, the current market cap of $3 million is vulnerable considering the track record of this company and somewhat lower than a recent valuation of a technology licence with Transgene. The company appears to be looking for new directions and has restructured the board accordingly. (10/11/08)

VLA - Viralytics Ltd.
Previously called Psiron and changed name at end of 2006. Shares in this company increased significantly in 2003 due to its investment program and the stabilisation of the company following the distribution of products and services with Analytica Ltd. The company is now preparing for new developments through its agreement with Viro Targ. The market cap of the company is $14 million and a significant proportion of this is associated with future commercialisation prospects. Whether these transpire in a timely manner will influence prices in the future. However, in our view, the company is over valued and the sudden departure of the CEO and CFO and then two directors following shareholder disagreements have given cause for concern. Shares were suspended for five months in 2006 due to fund raising and were relisted at the end of August with a subsequent fall and recovery associated with the commencement of ADR trading in the US (down 12% in 2006, a further 44% in 2007 and 46% in 2008). (19/11/08)

(VSG - Visiomed Group Ltd.)
This company has been struggling for a decent product portfolio. In 2004, prices fell 60%, a further 28% in 2005 and 43% in 2006. However there was a 42% recovery in 2007 (market cap $12 million following fund raising). The company reviewed opportunities for growth with closure of some lines and increased emphasis on the Funhaler and potential new products such as the microEYE™ development with CustomVis. The company had to broaden its portfolio to gain strength and credibility in the market and this appeared to happen with the acquisition of a key player in the Australian asthma spacer market. Another development was the proposal to merge with another listed company Clinical Cell Culture which will be completed in February 2008. Prices down 24% in early 2008: market cap $9 million. Share trading suspended as part of merger arrangements. (13/2/08)

XCD - Xceed Capital Ltd.
Relisting of a broadband communications company as a biotechnology investment vehicle. This company has 100% of Boron Molecular and 64% of a joint venture with CSIRO developing biopolymers, PolyNovo. The company is cashed up and has small turnover with low losses but prices dropped then recovered and declined 18% in 2007. There has been a further 67% fall in 2008 with market cap of only $6 million. Possible sale of Boron Molecular offered opportunity for some increase in value as well as new linkages with Medtronic and Smith & Nephew and development of new products in the burns area. There was a temporary jump associated with proposal to demerger PolyNovo (now discontinued). Name changed from Xceed Biotechnology to Xceed Capital in December 2007. Departure of CEO indicated company was looking for new approaches. Most recent development has been agreement for sale of PolyNovo Biomaterials to Metabolic Pharmaceuticals which appears to have resulted in halving of share price. (8/11/08)