The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Monthly Archives: January 2014

Monday Deal Review: January 27, 2014

  Welcome to your Monday Biotech Deal Review for Janary 27, 2014! This week saw Valeant complete thier acquisition of Solta Medical, Inc. for USD$250 million. Solta Medical provides treatment technologies for aesthetic care options at the consumer and physician level.  Valeant has also announced a share repurchase program to make purchases of up to $1.5 billion of its convertible notes, senior notes, common shares and/or other debt or shares that may be issued. In other news, Atrium Innovations has obtained shareholder and debentureholder approval for a plan or arrangement allowing for the acquisition of the company by corporations backed by the Permira funds and the acquisition by the company of all of its outstanding convertible debentures.

For details and news on these deals, as well as the rest of the week’s major biotech news, hit the break.

Read more of this post

Monday Deal Review: January 20, 2014

  Welcome to your Monday Biotech Deal Review for Janary 20, 2014! This week saw Paladin purchase Triton Pharma,  privately-held, Canadian specialty pharmaceutical company focused on acquiring and in-licensing specialty innovative products with expected sales of $4 million in 2014. This occurs as Paladin continues to be an acquisition target for Endo Health.

In the commercial space, Sirona and Cincennatti Children’s hospital have signed an agreement to develop an anti-aging cream and associated intellectual property incorporating the proprietary technologies of each organization. The resulting new anti-aging product will be patented with the goal of licensing the new technology to a global leader in the cosmetic and consumer packaged good marketplaces.

For details and news on these deals, as well as the rest of the week’s major biotech news, hit the break.

Read more of this post

Q4 2013 and Annual Share Price Performance for the Canadian Healthcare Sector: Strong and volatile performance for the smaller cap public companies (Part 2)

Wayne Schnarr - seriousIn this blog, I will focus on the Canadian public healthcare companies which started 2013 with share prices between $0.10 and $0.99 (53 companies). The results for the larger companies covered in Part 1 of this blog were strong. The results for the smaller cap companies were also strong – average annual share price increase was 53% – but with more volatility.

Three companies exited this group during 2013. Medicago was acquired by Mitsubishi Tanabe Pharma for $1.16 per share, an increase of 173% from the initial 2013 share price. Philip Morris Investments retained its 40% share in Medicago. MethylGene (now Mirati Therapeutics) and Sophiris Bio both delisted from the TSX after moving their operations to the U.S. Six companies will not be carried over to the 2014 list as their share prices were below $0.10 to close 2013. Two companies which started 2013 below $0.10 will move up one tier in 2014 and some new companies, such as Antibe Therapeutics, will also be added to the list.

Q4 Share Price Performance (50 companies)

  • Advancers outnumbered decliners by 31 to 19
    • Therapeutics: 13 to 6
    • Diagnostics & Devices: 9 to 6
    • Services: 3 to 2
    • Others: 6 to 5
  • Average and median Q4 share price changes were +15% and +9%, respectively, versus +27% and +20% in Q3
  • Average share price changes by subgroup
    • Therapeutics: +29% vs. +36% in Q3 (17 companies)
    • Diagnostics & Devices: +11% vs. +3% in Q3 (9 companies)
    • Services: +12% vs. +36% in Q3 (7 companies)
    • Others: -3% vs. +39% in Q3 (3 companies)
  • Thirteen companies had share price increases of 40% or more
  • Four companies had share price declines of more than 40%

2013 Annual Share Price Performance (51 companies)

  • Advancers outnumbered decliners by 28 to 23
    • Therapeutics: 13 to 7
    • Diagnostics & Devices: 7 to 8
    • Services: 3 to 2
    • Others: 5 t 6
  • Average share price increase was 53%
  • Average share price changes by subgroup
    • Therapeutics: +41%
    • Diagnostics & Devices: +14%
    • Services: +165%
    • Others: +68%
  • Eighteen companies had share price increases of 40% or more, with my personal perspective on the main reasons for the share price movement
    • Northstar Healthcare Inc. (+746%) –bounce off lows on reorganization and refinancing
    • Stellar Biotechnologies, Inc. (+571%) – bounce off lows on technology acquisition and financing
    • BioSyent Inc. (+363%) – increased sales and profitability
    • Cardiome Pharma Corp. (248%) – bounce on new commercial activity and some clinical data
    • ProMetic Life Sciences Inc. (226%) – increased revenues and purchase agreements
    • CRH Medical Corporation (+178%) – increased revenue and profitability
    • Medicago Inc. (+173%) – acquired by Mitsubishi Tanabe Pharma
    • Theralase Technologies Inc. (+138%) – closed financing
    • Spectral Diagnostics Inc. (+132%) – progress towards pivotal clinical data
    • QHR Technologies (+127%) – increased revenue and cash flow
    • Zecotek Photonics Inc. (+121%) – financing completed and new commercial orders
    • Vigil Health Solutions Inc. (+108%) – increased revenues
    • Lorus Therapeutics Inc. (+84%) – changes in management and product focus
    • Welichem Biotech Inc. (+78%) – using cash to repurchase shares (very illiquid stock)
    • Immunotec Inc. (+58%) – management change
    • Theratechnologies Inc. (+56%) – new commercial activity
    • China Health Labs & Diagnostics (+55%) – being privatized
    • Sirona Biochem Corp. (+45%) – financing and license agreements

Among these 18 companies, 6 reported better financial results, 4 had new commercial or licensing deals and 3 had changes in management and / or product focus. There were no cases in 2013 where late-stage clinical data was the major trigger.

  • Nine companies had  share price declines of more than 40%, with my personal perspective on the main reasons for the share price movement
    • Cardiocomm Solutions Inc. (-43%) – did not meet market expectations after commercial announcements in March
    • Nuva Pharmaceuticals Corp. (-45%) – change in management and business focus
    • VentriPoint Diagnostics Ltd. (-48%) – FDA did not approve 510(k) application
    • Centric Health Corp. (-49%) – results of cost containment and rationalization did not meet market expectations
    • iCo Therapeutics Inc. (-55%) – impatient investors waiting for Phase 2 data
    • Verisante (-56%) – product sales did not meet market expectations
    • DiagnoCure Inc. (-57%) – product sales did not meet market expectations
    • IBEX Technologies, Inc. (-62%) – forward guidance for reduced purchases by a major customer
    • Innovotech Inc. (-84%) – continuing losses and sustainability concerns

Among these 9 companies, the main trigger was a failure to meet market expectations for clinical progress, regulatory approvals or increased revenues.

Third Tier Performance

The third tier of companies started 2013 with share prices below $0.10 (27 companies). Of the companies still active at year end, 8 companies had 2013 share price increases of 40% or more, including 3 over 400%, and 6 companies had share price decreases of -40% or more. This list will substantially change in 2014 as:

  • 3 companies moved to the top tier;
  • 2 companies moved to the second tier;
  • 7 companies were dropped due to CCAA, acquisitions or cease trade orders; and
  • 6 companies moved from the second to the third tier.

Sector Summary

The positive share price performance in the sector is a relief. It may have been triggered partially by investors looking south at the resurgence of biotech IPOs, although some of those valuations were ridiculously high. It also included some bottom-fishing as many share prices bounced off 2012/2013 lows on low trading volumes, survival financings and minor events.

In looking at the Canadian companies with share price increases of 40% or more in 2013, the reasons were primarily financial, commercial and acquisitions. The biotech industry has historically looked for positive late-stage clinical data and regulatory approvals to invigorate investors. There were no cases in 2013 where late-stage clinical data was the major trigger.

Key sector questions for 2014 include:

  • What will keep up the momentum in the sector;
  • Are there more acquisition targets; and
  • Are there any upside surprises expected from late-stage clinical data or regulatory approvals?

[The opinions expressed herein are the author’s own and are not to be construed as investment advice. The author and his immediate family members may have long or short positions in the shares of some companies mentioned in or assessed during the preparation of this blog and may buy, sell or hold such securities at any time. Past share price performance may not be an indicator of future share price performance. This blog and its contents do not consider the investment objectives, financial situation or particular needs of any particular person. Investors should obtain professional advice based on their own individual circumstances before making an investment decision.]

Monday Deal Review: January 13, 2014

  Welcome to your Monday Biotech Deal Review for Janary 13, 2014! This week saw the closing of a number of financing transactions, as well as Sirona’s announcement of a private placement of up to $5.34 million in proceeds.  Aeterna Zentaris also announced pricing of their public offering, indicating that shares will be sold at US$1.20 per share, with proceeds up to US$12.2 million.

For details on these deals, as well as the rest of the week’s major biotech news, hit the break.

Read more of this post

Q4 2013 and Annual Share Price Performance for the Canadian Healthcare Sector: Another upbeat quarter for the larger cap public companies (Part 1)

Wayne Schnarr - seriousIn order to assess share price performance in 2013 among the Canadian public healthcare companies, I used an initial portfolio of 118 companies. The portfolio was split into three parts according to the closing share price on December 31, 2012: $1.00 or more (38 companies); $0.10 to $0.99 (53 companies); and less than $0.10 (originally 27 companies).

In this blog, I am going to comment on the Q4 and annual performance of the first group of companies with share prices of $1.00 or more to start 2013. The quarterly share price performance was upbeat again and the annual performance was strong.

Read more of this post

Monday Deal Review: January 6, 2014

  Welcome to your Monday Biotech Deal Review for Janary 6, 2014! Happy New Year! Things in 2013 slowed considerably as we approached the holiday season, however January has gotten off to a good start.

Hit the break to see this week’s major biotech news, and thank you to Jennifer Ng of Norton Rose Fulbright Canada LLP for conbtributing to this week’s post.

Read more of this post

Follow

Get every new post delivered to your Inbox.

Join 126 other followers