Australasian Biotechnology (backfiles) AusBiotech ISSN: 1036-7128 Vol. 11, Num. 2, 2001, pp. 15-16

Australasian Biotechnology, Vol. 11 No. 2, 2001, pp. 15-16

DELOITTE BIOTECH INDEX

Code Number: au01020

AUSTRALIAN BIOTECH STOCKS OUTSTRIP USA

For the first time since 1 January 1997, the Deloitte Biotech Index has risen at a greater rate than the Nasdaq Biotech Index, the latest Deloitte Biotech Index reveals.

The 5th Deloitte Biotech Index, released in late March, shows that despite the slump in world stock markets, the biotechnology sector continues to outperform general stocks.

Deloitte Life Sciences Partner, Glen Sanford, said there had been a 19% improvement on the October Index.

“Between 1 October 2000 and 28 February 2001, the Deloitte Biotech Index rose by 19%, however if CSL is excluded, the Index rose by a massive 30%. The exclusion of CSL results in a higher increase due to CSL’s relatively smaller improvement of 4.9%,” he said.

“Over the same period the ASX All Ordinaries showed a rise of only 1%.”

The Index shows that as at 28 February 2001, market capitalisation of the Index’s 53 ASX-listed stocks had reached $14.39 Billion, a 21% increase on the 29 September 2000 capitalisation figure of $11.89 billion.

Mr Sanford said both the Nasdaq Biotech Index and Nasdaq Computer Index ended February 2001 well below their 52-week highs.

“Despite a recovery in early 2001, the fall has been particularly severe in the computer sector where the Nasdaq Computer Index lost 49% between 1 October 2000 and 28 February 2001,” he said.

“Although the Nasdaq Biotech Index has not performed quite so badly as the Computer Index, it too fell some 27%.”

New Listings

David Black, Client Director, said that, since the previous edition of the Index, six new biotechnology-related companies have listed on the ASX, bringing to 53 the number of companies now tracked by the Deloitte Biotech Index.

“Many companies are listing on the stock exchange early in their lives and with science at a very early stage of development. We identified this trend in the previous edition of the Deloitte Biotech Index and it has continued,” he said.

“Other companies which are thought to be listing in the near future include: PanBio Limited, Sage Global Fund Limited, Antisence Therapeutics Limited, Rubicon, Cellestis Limited, CG Surgical, Syngene Limited, and Sci.com.”

Other Trends

Mr Black said other significant developments and trends included:

• The best performers on the stock market are those that have become truly international. Examples of this include ResMed, Cochlear and CSL, all companies with strong sales and profit growth that have also enjoyed significant share price growth. These companies are the ‘blue chip’ stocks of the sector.
• More recently Peptech has benefited from its strong international patent position and had seen its share price skyrocket.
• The stock market tends to punish companies severely that deliver bad news, such as Pi2, and rewards those who deliver good news, for example Peptech.

Industry Outlook

Mr Sanford said late 2000 and early 2001 had been hectic times in biotechnology.

“Government initiatives such as the innovation statement are positive steps towards helping Australian biotechnology, however we have seen signs of technology companies looking offshore for assistance from overseas governments,” he said.

“It remains to be seen whether these recent initiatives will be sufficient to keep the many excellent ideas developed in Australia onshore.”

“The impact of the current economic conditions on the Australian biotechnology sector is expected to be minimal, as its past strong performance puts it in a position to take advantage of the global growth in biotechnology.”

Download a copy of the 5th Deloitte Biotech Index in Adobe Acrobat (pdf) format at http://www.deloitte.com.au

For further information:

• Glen Sanford, Partner, Deloitte Life Sciences, (02) 9840 7230 / 0414 397 854, glen_sanford@deloitte.com.au
• David Black Client Director, Deloitte Life Sciences, (02) 9840 7207/0414 245 706, david_w_black@deloitte.com.au

From Deloitte’s 5th Edition Biotechnology Index

Antisense Therapeutics Limited

• Antisense Therapeutics Limited is owned by Circadian and was established on 13 November 2000 to develop antisense technologies. Antisense cell therapy relates to the field of gene therapy whereby synthetic genetic material may be used to block the action of genes that produce disease-causing proteins. Antisense has the potential to be rationally designed with knowledge of the genetic target, whereas conventional drugs are typically found via a process of extensive trial and error. Interest in antisense technologies has been fuelled by the rapid growth and understanding of the science of genomics.

Cellestis Limited

• Cellestis Limited was formed to commercialise Quantiferon, a patented platform technology for medical diagnosis which detects cell mediated immune responses using whole blood samples.
• The company is seeking to raise $9m through the issue of 36 million shares at an offer price of $0.25

CG Surgical

• CG Surgical debuted on the unlisted securities market of the NZSE in December 2000 issuing 10 million shares which are currently trading at NZ$1.25.
• It has patents over a titanium and teflon clip which is surgically inserted into the neck, preventing pressure on the spinal cord and alleviating neurological related complaints including headaches, pain, numbness, pins and needles.

Syngene Limited

• Syngene Limited is owned 42.38% by Circadian and 20% by Kerry Packer and is still thought to be considering listing this financial year.
• It an exclusive worldwide licence from the Howard Florey Institute in relation to certain patented synthetic genetic molecules and their application as gene diagnostics or as antisense pharmaceuticals.
• Syngene is also concentrating on new uses for ephedrine.

Sci.com

• Sci.com is a group of Australian companies involved in the investment and commercialisation of innovative and novel technologies from within the areas of medical and scientific research.
• The focus of the company is to assist those with technical expertise who specialise in biotechnology, medical and scientific instruments and imaging, and to commercialise their technologies.
• Sci.com has developed links with research institutes as well as private inventors and hopes to improve the marketability of Australian technologies within the global arena.

Exodus Limited

Exodus Limited, an ASX-listed mining company has entered the biotechnology field. Exodus’ biotech vision is to provide capital for new life-sciences projects, particularly those in medical research and healthcare.

It plans to assist researchers to develop new technology through the provision of capital and commercial expertise with the aim of taking projects through to the stage of commercial application. Is currently involved in two projects:

• development of cancer vaccine technology with St Vincent’s Hospital in Sydney;
• development of a diagnostic test and tool for multiple sclerosis with Murdoch University in Perth.

Pharmaction Holdings Limited

At a shareholders meeting in December 2000 Pharmaction Holdings Limited changed its name to Eiffel Technologies Limited. In January 2001, responding to speculation of a takeover bid, Eiffel announced that, although discussions and negotiations occur on a daily basis with a wide range of leading international pharmaceutical companies, there are no current offers to acquire Eiffel and no current negotiations on this subject.

eBioinformatics have changed their name to Entigen Pty Ltd

In December 2000 the directors of BioTech Capital Limited announced an investment of $2m for a 10% equity investment and Board representation in Pacific Knowledge Systems (PKS). PKS is an Australian company specialising in the practical application of artificial intelligence in the health-care sector.

• On 1 March 2001 BioTech Capital Limited announced its third investment had been completed. The investment is $2m for a fully diluted 3.32% equity investment in Alchemia Pty Ltd.
• This investment was part of a larger $15.2m capital raising which saw a number of venture-capital groups become shareholders in Alchemia.
• On 8 March 2001 Biotech Capital announced its fourth investment. The investment amounts to $4,000,000 for a 19.9% equity investment and Board representation in X-Ray Technologies Pty Ltd (XRT). XRT is a leader in the field of X-Ray phase contract imaging , which enables the production of images that are richer in both visual and data content.
• Taking into account Proteome Systems Limited options Biotech Capital is now effectively 31% invested.

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