Biotech stocks have enjoyed a solid year and are poised to continue delivering in 2014.
It promises to be a bumper 12 months for the global biotechnology industry with the big blue-chip research firms continuing to deliver.
Globally, biotech has been the top performing sector for the past three years, meaning investors have been rewarded for all those lean years before the upswing.
Here in Australia, the S&P/ASX 200 Health Care index, which includes both biotech and healthcare companies, has risen 23.7% this year to 14,395.8 points.
In the U.S., the closely followed S&P Biotechnology Select Industry Index is up 38% and has advanced more than 1,500% since its inception in 2011.
In the UK, the gains have been more modest by comparison with the pharmaceuticals and biotechnology index adding a fifth to its value in the past year.
Credit Suisse, in a note to clients, said the large biotechnology firms have scope for earnings per share upgrades.
For the mid and small-cap companies, there should be a trickle-down effect on valuations, analysts reckon though they don’t expect the uplift to happen uniformly across this particular part of the biotech sector, and the message for the stock-pickers is be selective when fishing through the minnows.
Some stocks on the small end of the market in Australia that have made notable gains in 2013 include Admedus (ASX: AHZ ) – formerly Allied Healthcare, whose shares have risen more than 600% this year to $0.15.
Sales of its infusion continue to show growth while its CardioCel® regenerative tissue repair product for repairing and reconstructing heart defects is expected to contribute to sales this financial year.
Results from the key Phase I study for the herpes therapeutic vaccine developed by Professor Ian Frazer and his science team at Coridon (AHZ 50.1%) are due around mid-2014 with interim results expected to be reported in the first quarter of 2014.
This offers considerable blue sky potential, given that no cure currently exists for HSV-2.
Cellmid (ASX: CDY ) has also marked a 93% gain this year to $0.029.
The company continues to progress its midkine (MK) diagnostic and antibody programs having recently completed its largest ever study investigating normal serum concentrations of MK in 574 apparently healthy volunteers.
This has highlighted its use as a potential indicator of serious illness.
Other studies have also demonstrated its lead MK antibodies' efficacy in reducing cancer tumour growth and spread.
Regeneus (ASX: RGS ) has gained 74% to $0.435 since listing in mid-September at $0.25.
The company is moving to fast-track the clinical trial and potential approval of its new human “off-the-shelf” CryoShot® cell therapy to treat osteoarthritis.
It has also received approval to commercialise its canine cancer vaccine in the U.S. while plans are underway to expand its HiQCell® stem cell knee osteoarthritis therapy footprint and procedure rates in Australia by having treatment hubs in all major Australian capitals with musculoskeletal specialist communities.
Anteo Diagnostics (ASX: ADO) has put on 141.94% this year with the company recently raising $5.5 million to bring forward the development and commercialisation of products from two new patents to three years from seven years.
Neuren (ASX: NEU) has risen 238.24% to $0.115, ImpediMed (ASX: IPD) has jumped 195.18%, Bionomics (ASX:BNO ) up 114.29% to $0.75 and Living Cell Technologies (ASX: LCT) has climbed 56% to $0.078.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.