Biotech 2010 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 28% in 2008 with market cap for the merged company of $190 million which was renamed Arana Therapeutics in November 2007. Animal Health Division was also sold in 2008. There was a temporary recovery in early 2009 and this strengthened to a 69% rise when Cephalon International announced its intentions for an off market takeover at $1.40 valuing the company at $321 million. Cephalon now has the entire shareholding of the company which was delisted in August 2009. (13/8/09)

AAQ - AAQ Holdings Ltd.
Aquaculture company listed as Australis Aquaculture 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 was fully sold with output doubled. Prices rose 42% in 2006 but fell 31% in 2007 as a result of fund raising with revenues increasing slowly and dropped a further 57% in 2008 and 19% in early 2009. The company had a market cap of $13 million. Shares were impacted by the market downturn in August 2007 and in 2008 and slow revenue growth resulted in cost cutting measures. Lack of ability to raise further funds resulted in share suspension and voluntary administration in January 2009. The US and Vietnam subsidiaries were exchanged for debt with major creditor in February and name was changed to AAQ Holdings in April in preparation for restructure with vending in of another business in the offing. (30/7/09)

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 significantly. Now that the company has a growing base in major markets and a 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 was a sharp jump in late 2008 with expectations of increased sales (down 53% in 2007 but up 63% in 2008, a further 23% in 2009 then down 19% in 2010 when half yearly results indicated no increase in sales). (10/3/10)

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. Since then, there has been some uncertainty (down 33% in 2006 overall, down 42% in 2007, down 77% in 2008 but up 350% in 2009 following successful NDA filing with FDA). We consider that the current market cap of $118 million is a little high following substantial fund raising, milestone payments from manufacturing partner and FDA approval of NDA application (down 14% in 2010). (18/2/10)

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 $340 million following substantial fund raising (up 17% in 2006, a further 84% in 2007 but down 66% in 2008 and up 359% in 2009 following ostensibly positive analyst reports, conclusion of Phase III clinical trials with positive results and distribution agreement for Ellavie in Europe ). There has been an 3% decline in 2010. (18/2/10)

ACU - Acuvax Ltd.
Previously called Avantogen and 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 had 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 (since 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 eventually led to issue to raise $4.5 million but ASIC imposed a stop on the associated prospectus which was revoked in May 2007. Announced deal with SciClone Pharmaceuticals offered some potential for commercialisation of company technology although this appears to have hit a snag. Company recommenced trading on ASX as Avantogen in October 2007 and after a flurry of activity, shares rose 20% in 2007. There was erratic activity in 2008 with little sign of value despite a market cap of $15 million (down 59%). Yet another name change to Acuvax in December 2008 and this has been followed by a 92% increase during 2009 and then an unexplained fall: down 32% in 2009 to $11 million with sale of 10% holding in RESprotect to provide badly needed cash, over promotion of the company and failed foray to take control of affiliate Hawaii Biotech. There has been an 18% decrease to $9 million in 2010. (13/2/10)

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 $3 million (down 82% in 2008 and up 16% in 2009 following 100% temporary jump based on wild speculation).There has been a speculative 40% jump in 2010 to $4 million associated with patents in a new business area. (17/2/10)

ADO - Anteo Diagnostics Ltd .
Previously called Biolayer Corporation and SSH Medical, a medical equipment development company, which was restructured and acquired Queensland biotechnology company Bio-Layer. The latter company had already licensed its technology to a US diagnostics company and was working with a number of other international and local companies on developing new diagnostic products. Company had a market value of $3 million at the end of 2008 following substantial fund raising (down 57% in 2006, down 65% in 2007 and down 62% in 2008). A significant increase in revenues and reduction in losses suggested that company may be undervalued but the company needed to improve its cash position for survival and this was done with further fund raising. Name changed to Anteo Diagnostics in November 2008. New collaborative arrangements with a New Zealand company and a Malaysian company. Prices down 65% to market cap of $3 million in 2009 indicating serious vulnerability of company despite recent fund raising. There has been a 829% increase to $31 million in 2010 as a result of speculation following a licensing agreement with Bangs Laboratories which is already incorporating the ADO technology in its product. (5/3/10)

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 $8 million with 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 offered some new blue sky although there were also significant risks associated with this strategy as indicated by 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 was not been helped by successful litigation against former Managing Director. Shares currently suspended and it appeared that problems in China were settled, year end financials could be completed and trading resumed some time in 2009. However in early 2009, sufficient funds for the arrangement were not obtained and the arrangement lapsed with a further renegotiation and initial payments offering hope for eventual resolution. This was not successful and the agreement with China has lapsed with departure of Managing Director and appointment of Executive Chairman. (8/1/10)

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 $19 million at end of 2008 following a 52% fall in 2005, 25% in 2006 and 41% in 2007 but up 331% in 2008 indicated that while we consider there is currently not much substance in this company, there is considerable speculation. Acquisition of Recovery Clinic offers some blue sky potential. Reason for rise in 2008 appears to be related to launch of first product, an autostart burette, but there has been continuing easing of prices in 2009 with a recent jump on announcement of first sales of the burette and distribution agreement (down 43%) but revenues still minimal. There has been an 87% increase in 2010 associated with FDA approval for autoburette. Current value of $30 million is very high. (9/3/10)

ANP - Antisense Therapeutics Ltd.
Following its listing 7 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 was a 100% increase due to the deal with Teva Pharmaceuticals and positive trial results (eventually down 17% in 2008). The market cap of the company is $29 million (up 57% in 2009 and down 11% in 2010) which we consider is high in view of cash reserves of $3 million and is driven by future expectations now that Teva has made milestone payments. (4/3/10)

AOP - Apollo Consolidated Ltd.
Previously called 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 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 announced lack of investment interest resulted in a cost cutting exercise and 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 2008 with all assets up for sale. Indications of likely sell off of assets due in late January 2009 (has not yet occurred). Proposal for consolidation and recapitalisation of the company and name change to Apollo Consolidated approved in August 2009 and trading in shares recommenced with fall in prices (down 99%). Market cap of $4 million with announcement of acquisition of major share in gold project indicating change in direction and a 10% decline in early 2010. (As company is no longer carrying out biotechnology development, coverage is being discontinued.) (1/2/10)

(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, down 81% in 2008 but up 17% in 2009 with company value of $4 million associated with sell off of assets prior to directional change). 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 appeared to be preparing for change of direction and this culminated in announcement of merger with International Formwork and Scaffolding indicating company is moving out of biotechnology. General Meeting approved change which occurred at beginning of July. (8/7/09)

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 offered some future. Prices even in 2008 and down 15% in 2009. The company's interest in algal production to produce biodiesel is well placed but significant resources will be required to commercialise this area and this probably resulted in sale of Karratha ponds to Aurora Biofuels at the end of 2009. This resulted in a temporary 36% rise in early 2010 and then a 45% increase associated with speculation about negotiations on an acquisition. (25/2/10)

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 87% in 2008 with market cap of $3 million which was less than cash holding at the time but revenues are increasing significantly and there has been a 358% increase in 2009 to market cap of $17 million with recent funding to accelerate acceptance of ReCell in US market, clearance for sale of ReCell in China and clearance for clinical trial in US. There has been a gradual decline of 15% in 2010 to a market cap of $15 million. (8/3/10)

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 97% in 2008 with necessary fundraising proving difficult. Market cap of $2 million was very low as revenues had increased substantially but there were cost overruns leading to a price drop. Chairman resignation and spill of the Board indicated an unfolding story where funds were short and additional funds were being sought to cover continuing losses. First half FY2009 results were very encouraging but there were continuing losses and prices rose 33% in 2009 with a recapitalisation arrangement with former sleep centre owners reducing future demand for funding. Continuing problems resulted in company being placed in voluntary administration at beginning of August and in liquidation in September 2009. (13/9/09)

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 $93 million of which $33 million is cash (prices down 84% in 2008 but up 109% in 2009 following extension of assessment by Tibotec). Announcement of merger with Progen Pharmaceuticals at end of 2008 was countered by proposal from Cytopia and shareholder revolt. Eventually merger did not proceed. Perceived value of AVX bolstered by favourable expert's report valuing Apricitabine at around $200 million which is somewhat at variance with non-cash value of company of around $60 million including two recent speculative jumps. There has been a 29% decline in 2010 following decision of Tibotec not to continue with assessment. (1/3/10)

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