Listed Biotechnology Companies I-O

IAT - Iatia Ltd.
Between its listing in April 2002 and May 2004, the share price fell by over 90% indicating that the company had not gained sufficient interest and had not met expectations in the original prospectus. However following June 2004, there was a surprising and unjustified increase in price. With very little liquidity, a fall in price of 38% in 2005, a decline then stabilisation in 2006 (down 3% overall), a further decline in 2007 (down 12%) and again in 2008 (down 88%) and a market value of $2 million supported by capital injections as well as a search to find relevant markets, the company value indicates that survival of this company as a listed entity remains in question. Profitability was projected in 2007 but has not yet appeared, funds are short and revenues are still meagre. Funding of $0.5 million by major shareholders has resulted in a 100% increase in 2009 (market cap $4 million) following agreement with General Electric in UK. Shares suspended in early 2010 due to uncertainties about raising further funds to maintain operations. (1/3/10)

ICV - Incitive Ltd.
Another biotechnology company listing without track record or pedigree. This company adds to the many companies in the Australian biotechnology sector that are insufficiently funded and directed at markets that are not in Australia. The focus on anti-inflammatory and immunosuppressant drugs is not new. Value of the company will be speculation driven for the first two years and prices rose 25% on launch but fell 33% overall in 2006, fell a further 41% in 2007 and 63% in 2008. Company value of $4 million is vulnerable not helped by association with the Opes Prime collapse. Lack of income and liquidity indicated a change of direction in the offing and this culminated in proposal to acquire V-Patch in June 2009 which was subsequently not continued with. There has been some refinancing of the company in 2009 associated with fall in share price by 77%. New acquisitions will be essential for survival of company and this resulted in a move out of the biotechnology industry with acquisition of Hawkley Oil and Gas in 2010. (26/2/10)

IDT - Institute of Drug Technology Australia Ltd.
The company had a pretty average 2003 and early 2004 with consolidation being the theme. Share prices were lack lustre until July when they increased around 30% as a result of the announcement of deals with US companies, but gradually declined about 30% to the end of 2005 and a decline and recovery in 2006 associated with reduced revenue and profitability but with significant recovery in the last 6 months due to improved financials (up 14% in 2006). The company has a market value of $38 million which is fair given that it is one of the few biotech companies that is profitable. Financials had indicated that revenues were growing slowly and profitability was up considerably. This together with the announcement of improved collaboration with Pfizer had resulted in a recovery in prices (up 21% in 2007 but down 31% in 2008 - below the average market decline for the sector) with the potential for improvement when current market malaise has passed. However there has been a sharp drop in 2009 with announcement of reduced revenues and profit (down 18%). Evidence of sharply reduced revenues and profit in half yearly results led to a sharp drop of 36% in 2010. (3/3/10)

IMC - Immuron Ltd.
Name changed from Anadis Ltd in December 2008. 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 led to the exit of the CEO. Uncertainty remained about the viability of the company but speculation over laboratory results led to a brief 50% jump in prices in early 2008 but prices fell 70% in 2008 to a market cap of $4 million. Manufacturing business was sold in 2008 and name changed to Immuron (ASX:IMC) in December 2008. Expectations of trial of immunotherapy product, new potential product licensed in from Israel and fund raising has led to some fluctuations in 2009 (up 173% at $23 million with further funds raised and new shareholding from Israeli licensee). US-based executives have been let go and there are discussions with leading pharma company on influenza treatment. Prices up 16% in 2010 with a market cap of $25 million. (9/3/10)

IMU - Imugene Ltd.
Imugene tripled in price during 2003 and prices more or less remained at this level until early 2005. This was based on optimistic expectations which could not be met in the short term. There was a fall and partial recovery in prices during 2005 (down 30% overall) and a recovery in 2006 (up 38% overall) with stabilisation in early 2007 associated with positive results in avian influenza trials (down 41% in 2007). There was a further 45% fall in early 2008 with a subsequent jump associated with positive trial results and a further jump with announcement of a strategic alliance with Merial and initial payments (down 43% in 2008). The market cap of $8 million for the company is reasonable and prices in FY2009 were expected to climb further (temporary rise following speculation associated with outbreak of swine influenza and eventually up 4% with a year in profit) and there has been a 38% decline in early 2010 with renegotiation of agreement with Merial. (17/2/10)

IPD - Impedimed Ltd.
Eight year old Queensland company listed in October 2007 before substantial revenue had been generated. Following listing, prices have increased then declined and on basis of fundamentals, it was hard to see prices being maintained until there are realistic projections for a substantial increase in revenue and profitability. Market cap of $87 million is high as revenues are stable but this value may gradually be supported. Down 5% in 2008 compared to market sector decline of 39% which indicates strong support for company and up 4% in 2009 associated with possibility that insurers in the US may accept the Impedimed product as the gold standard. Prices are up 3% in 2010 with announcement of special reimbursement code for Impedimed use. (9/3/10)

KSX - Karmelsonix Ltd.
Since being renamed from Q-Vis then Salus Technologies, Karmelsonix has had a stuttering restart with the latest rebirth being the acquisition of KarmelSonix from Israel and PulmoSonix from Australia to develop respiratory products. Developments are at an early stage and the initial market cap of $8 million following the restructure and fund raising indicated the uncertain status of the company. However, in June/July 2007 prices jumped 502% without explanation but value returned to $4 million (up 243% in 2007 but down 92% in 2008). However, there has been a 171% recovery in 2009 which together with fundraising and regulatory approvals has raised the market cap to $20 million. Cost cutting has been introduced to stop bleed in difficult credit environment. Market cap of the company is not reflected in the fundamentals indicating there are high expectations for this company. Sales of WheezoMeter may provide better fundamentals but recent sales are still minimal and shares are down 21% in 2010. (8/3/10)

LCT - Living Cell Technologies Ltd.
This company listed in September 2004 having previously been listed without note on the Newcastle Stock Exchange. In our view, the company was listing too soon and promising much. The company did well following listing with share prices up 100% and positive scientific reports were released. But it was hard to see this being maintained in 2005 and prices fell 53% in 2005 to par and remained at this level in 2006 with a small temporary rise in mid 2006 (down 10% in 2006). Preliminary favourable results from Phase II trials in Russia resulted in a 200% increase in September/October 2007 and prices rose 92% overall in 2007. There was a fall and recovery in 2008 associated with new investment, increased expectations for commercialisation and approval for a clinical trial in New Zealand (down 73% in 2008, up 120% in 2009 and down 30% in 2010). The current market cap of $42 million following fund raising is high as a result of speculation on positive clinical trials which are under way in Russia and have just commenced in New Zealand. Establishment of subsidiary in Russia offers opportunity for early commercialisation. (8/3/10)

(LFE - Arturus Capital Ltd (Life Therapeutics Ltd.))
Previously Gradipore Limited. 2004 started with significant optimism associated with the acquisition of the plasma therapeutic business of US company Serologicals Corp., Serologicals Specialty Biologics Inc., which provided a foothold in the US market as well as substantial turnover. Following this, the company was rebadged as Life Therapeutics and management moved to the US. Since then, share prices were initially erratic indicating some uncertainties. There was no significant price movement in 2004, but prices increased significantly (127%) in the last 5 months of 2005 in association with acquisition of Pyramid Biological Corp and significant improvement in sales and sales projections. This continued temporarily in 2006 but there was some dampening of prices with fund raising and higher than projected losses. Significant developments in 2007 were the heads of agreement with a European company Kedrion for divestment of the Life Sera business into a joint venture for 5.5% of Kedrion. This was not well received by the market with a 77% share price fall and there was a significant change of management including departure of the Managing Director. Because of its limited liquidity, the company looked to sell some of its assets and received significant offers for its plasma collection centres but it appeared that time ran out. The market cap of the company is now $6 million (down 4% in 2006, down 79% in 2007, down 83% in 2008 and down 14% in 2009). Trading in shares was suspended and prices dropped following the suspension period. Octapharma has taken over management of US operations with eventual acquisition in November 2008. The company changed name to Arturus Capital (ASX:AKW) with a change of business to general investment from life sciences in May 2008. (8/5/09)

(MBP - Metabolic Pharmaceuticals Ltd.)
Share prices had been increasing steadily since listing in 1999. In 2004, they doubled up to November but following that were subject to some uncertainty associated with critical analyst reports on results of clinical trials and prices have fallen 75% since then (64% in 2005). There was a 79% lift in 2006 associated with speculation about clinical trials which were expected to provide results in early 2007 and a short term increase in early 2007. In our view the market cap of $245 million for the company was very high as a result of speculation and we expected subsequent falls in the share price in 2007 if the company did not deliver on expectations or sign arrangements with pharmaceutical companies. It was therefore not surprising that the stock fell 82% in February 2007 when trials of its lead compound for treating obesity were not successful. There was a further 50% fall in August with announcement that clinical trials on pain drug were discontinued. Current market cap of $8 million is less than the cash holding (prices down 95% in 2007 and down 37% in 2008). Company halted work on oral peptide delivery, closed laboratories and was looking to outlicense its osteoporosis drug in preparation for mergers and acquisitions. This culminated in July 2008 wth announcement to acquire PolyNovo Biomaterials which was rejected by shareholders in November but since December, the company has taken a 66% position in PolyNovo and shares are up 23% in 2009. In November 2009, company changed name to Calzada (ASX:CZD). (24/11/09)

MGZ - Medigard Ltd.
This company, specialising in retractable syringes and giving sets, listed in February 2004. Since then the share price has fallen 80% and the company is valued at $6 million with small cash reserves. The award of funds (twice) by the Queensland Government has been useful, but significant developments will need to occur for survival of this company. Prices stabilised in 2006, even in 2007 and down 55% in 2008 but there have been wide price oscillations in 2009 due to FDA approval for equipment and unrealistic speculation about potential of company and agreement for manufacture of equipment in North America (up 122% in 2009). Prices are down 20% in 2010. (19/2/10)

MSB - Mesoblast Ltd.
This company, drawing on stem cell technology from Adelaide and overseas, launched in mid December 2004 at a premium of 60% and although prices dropped to par, they have again risen, up 89% in 2005, up 55% in 2006 but down 30% in 2007 associated with market correction and further oscillations in 2008 (down 22%). There was a further increase in 2009 with release of trial results (up 36%) and another 40% increase in 2010 based on inflated analyst reports. It is still too early to assess the substance of this company but some questions have been asked about issues of ownership of associated companies. The company is also being strongly promoted even though commercialisation is some time away and current income is reliant on grants and interest income. In our view, the company is overvalued for this stage of the commercialisation cycle and significant work is required to achieve commercialisation to justify the current value of $267 million. (2/3/10)

(MTY - Medical Therapies Ltd.)
Yet another biotechnology company which listed without a clear justification. Because of a lack of track record, prices were expected to fall in the first few months and they fell 20%. This was followed by speculation in the stock and prices rose, possibly associated a proposed acquisition of Nature Vet which did not proceed. Prices were up 3% overall in 2006 and fell 45% in 2007, a further 60% in 2008 and 22% in 2009 with wide oscillations. Market cap is now $6 million following speculation associated with announcement of first new drug product under development and appointment of new CEO/MD which was not supported by shareholders. The larder appeared to be rather bare putting prices under downward pressure so it was not surprising that the company acquired a patent portfolio from Japan to add blue sky potential in 2008. Because of midkine acquisition, name changed to Cellmid (ASX:CDY) in November 2009. (21/11/09)

MVH - Medic Vision Ltd.
Previously called Premier Bionics. Since listing in 2002, share prices initially were indifferent, but increased to a peak in September 2003. Following that, prices drifted down and stabilised at around 34¢ with a few northwards sorties. However, in June 2005, prices fell 40% associated with fund raising to acquire Medic Vision as part of a diversification. There was a further drop and recovery in 2006 associated with fund raising and development of new markets (prices level in 2006) and a temporary rise of 20% in 2007 associated with fund raising but down 38% in 2007 overall. The company now has a value of $3 million (down 57% in 2008 and down 43% in 2009). PulmoSonix was offloaded into Karmelsonix providing some opportunities, but the company needed to broaden its portfolio to increase value. There was a temporary jump in value associated with a joint venture in India and new fund raising but with problems in financing, shares were suspended. There has been a change of CEO and the company founder has left. Strategic review resulted in new agreements to build up existing business and to acquire new businesses including increasing stake in Red Paragon, acquisition of cBox and sale of medical simulation assets indicating a move out of biotechnology. There was a 60% fall following end of share suspension but this is gradually being recovered. There has been a further 41% decline in 2010 to $4 million. (27/2/10)

NAL - Norwood Abbey Ltd.
Prices declined over 50% in 2004 possibly due to disappointment with company progress and fell a further 50% in the first half of 2005 with recovery of some of this loss up to October 2005 followed by stabilisation then an 88% fall in 2006 and a 150% recovery in 2007 (which was dissipated with fall of 36% in 2007 overall and a further fall of 84% in 2008). Company has market cap at $2 million. The Company expected a significant increase in revenue in late 2005 and profitability towards the end of that year neither of which eventuated. It was expected that if revenue did not increase significantly and losses were not reduced, there would be a significant downward correction in 2006 and this happened (down 88%). The acquisition of laser eye technology, the gradual shift of the operations of the company into the US market in preparation for NASDAQ listing, consolidation of shareholding and 30% US shareholding not redress this and the significant fall in prices in 2006 was cause for concern. To handle short term credit problems, the company sold significant parcels of shares in Norwood Immunology and now is looking to offload other assets with the latest being the spin out of needle free injection technology. This resulted in a rise in value in early 2007 but prices fell 36% in 2007 and a further 84% in 2008. Prices even in 2009 with suspension of shares due to late release of financials and announcement of merger discussions with position bolstered by dividend payments from Norwood Immunology. Change of Board and decision to participate in Chinese coal industry indicates major change in direction of company. (23/11/09)

NDL - Neurodiscovery Ltd.
Recently listed company which has acquired UK company NeuroSolutions. It is still too early to assess the substance of the company and for this reason, there is a question as to the justification for listing. However, shares more or less held their value initially (down 3% in 2006 then down 31% in 2007 associated with fund raising) with further fluctuations in 2008 (share price down 58% in 2008 : market cap $3 million). The company has had small losses in its first four years of operation and revenues are gradually increasing. Business is not likely to be significant until pharmaceutical products can be licensed. Clinical trials halted until further funding secured. Company now has market cap of $2 million (down 30% in 2009 but up 20% in 2010) with lack of funds hampering development and speculation over new business contracts won. (20/2/10)

NLS - Narhex Life Sciences Ltd.
Five year old company listed early January 2005. Developing HIV protease inhibitor primarily for the Chinese market. Limited track record at this stage and primary issue will be rate of commercialisation in a difficult market. Prices fell 60% in 2005 and CEO has changed twice since listing. Price will remain under downward pressure until there is good clinical support for the company's lead product. However, announcement of prelimiinary clinical trials in 2006 and acquisition of assets of Swedish company producing inexpensive HIV diagnostics resulted in price improvements and prices rose temporarily by 27% but overall were even in 2006 and down 52% in 2007 with associated capital raising: market cap of $8 million. With change of second CEO prices fell a further 60% in 2008: market cap of $3 million with shares suspended because half yearly financials not completed and funds very low. There are signs that suspension will be lifted soon but company survival remains uncertain and this culminated in company going into administration in February 2010. (13/2/10)

NRT - Novogen Ltd.
Novogen showed a steady rise in share price from $1.25 in September 2002 to over $8 in December 2003. The company achieved significant sales and a successful entry into the US market. However, the value of the company has fallen by over 70% to around $49 million since then. In our view, this market cap is fair. Some levelling or fall in share prices was expected during 2006 unless the company could reduce its losses. This occurred (down 48% in 2006) and was accentuated by a downturn in the market and delays in milestone licence payments. However there was a temporary lift in 2007 associated with resolution of a patent infringement and an associated new licensing agreement. Pricing held up initially in 2008 despite the market fall but then fell although there was a temporary recovery associated with fund raising to support Marshall Edwards in the US (down 52% in 2007 and down 44% in 2008). There was some initial recovery in 2009 supported by speculation apparently based on a blog in the US which caused a spike in May and new research on possible applications of phenoxodiol but since then there has been a gradual decline resulting in departure of Managing Director. Prices down 14% in 2009 and a further 29% in 2010 to market cap of $43 million. (10/3/10)

NSP - NuSep Ltd.
New company created to specialise in the sales and distribution of bioseparations products originally sold through Life Therapeutics. This company has undertaken extensive developmental work but commercialisation is still at an early stage. Prices have fallen 86% since listing in May 2007 (down 65% in 2007, down 74% in 2008 and down 67% in 2009). Company value at $2 million was precarious until the reverse takeover of NxGen Pharmaceuticals was announced. NuSep business was to be spun out into another vehicle: Prime BioSeparations. Independent expert report indicated proposed acquisition not fair nor reasonable and acquisition did not proceed. Shares were relisted after 20:1 consolidation in early July.and have fallen 71% in 2009 with company value at $7 million following successful capital raising. Shares up 2% in 2010 with improving financials. (10/3/10)

OBJ - OBJ Ltd.
Backdoor listing through a software company, OBJ acquired transdermal permeability enhancement technology in 2004. Several announcements of the experimental features of the technology have been made, but commercialisation of the technology will take time and so some speculation is likely. Shares increased 108% in 2005, declined 30% in 2006, declined 38% in 2007 and fell 86% in 2008: the company had a market cap of $5 million following recent fund raising which was vulnerable in our view. However there has been speculation associated with laboratory results, fund raising and a commercial deal which has lifted the share price 480% in 2009 to a market cap of $32 million. Technology appears some distance from commercialisation. There has been recent shareholder disaffection but impact on prices uncertain although there has been reorganisation of the company with departure of the Chief Operating Officer. There has been a large increase in 2010 associated with collaboration on product development with GSK and is now up 83% to $58 million which is very high in our view. (5/3/10)

OIL - Optiscan Imaging Ltd.
Since the announcement of its licensing deal with Pentax in 2000, share prices have languished and despite some rise associated with the overall market lift in August 2003, prices have not been strongly supported except for rises associated with regulatory approval in the US, the release of a new research product and the deal with Carl Zeiss. The company is currently valued at $11 million, which is vulnerable with stability in 2005, a 28% increase in 2006, a 33% decrease in 2007, a further decline of 82% in 2008 but up 46% in 2009 and even in 2010, following departure of CEO after only two years. To maintain value, the company will need to become profitable and will need to increase revenues. Recent declines have been due to soft forward sales projections by Pentax as well as broader issues in the market and this is being reflected in decreasing revenues. There was a rapid drop in price in October 2008 with need for fund raising. Company has been downsized in difficult climate with a recent contract with Carl Zeiss offering some hope as well as the new agreement with Hoya and new fund raising. (5/3/10)

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Last revised Wed, 10 Mar 2010
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