The Cross-Border Biotech Blog

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

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.

Two companies exited this group during 2013. CML Healthcare was acquired by LifeLabs Medical Laboratory Services for $10.75 per share, an increase of 62% from the initial 2013 share price. OPMEDIC Group was taken private at $2.90 per share, an increase of 10% from the initial 2013 share price. Five companies will not be carried over to the 2014 list as their share prices were below $1.00 to close 2013. However, eight companies which started 2013 below $1.00 have climbed over $1.00 to close 2013 and will be added to the 2014 top tier analysis.

 

Q4 Share Price Performance (36 companies)

  • Advancers outnumbered decliners by 23 to 13
    • Therapeutics: 10 to 7
    • Diagnostics & Devices: 6 to 3
    • Services: 6 to 1
    • Others: 2 to 1
  • Average and median Q4 share price changes were +12% and +6%, respectively, the same as in Q3
  • Average share price changes by subgroup
    • Therapeutics: +10% vs. +25% in Q3 (17 companies)
    • Diagnostics & Devices: +12% vs. -3% in Q3 (9 companies)
    • Services: +16% vs. +2% in Q3 (7 companies)
    • Others: +9% vs. +14% in Q3 (3 companies)
  • Seven companies had share price increases of 40% or more
  • Two companies had  share price declines of more than 40%

 

2013 Annual Share Price Performance (38 companies)

  • Advancers outnumbered decliners by 24 to 14
    • Therapeutics: 9 to 8
    • Diagnostics & Devices: 6 to 3
    • Services: 6 to 3
    • Others: 2 to 1
  • Average and median share price increases were 37% and 26%, respectively
  • Fifteen companies had share price increases of 40% or more, with my personal perspective on the main reasons for the share price movement
    • Cipher Pharmaceuticals, Inc. (+210%) – increased sales and profitability
    • Patheon Inc. (+194%) – being taken private at $9.72 per share and merged with DSM’s pharmaceutical  products business
    • Paladin Labs (+184%) – being acquired by Endo Health for both product and tax reasons
    • Transition Therapeutics Inc. (+174%) – combination of clinical data, financing and licensing agreement
    • Neovasc Inc. (+156%) – increased sales and clinical data
    • TearLab Corporation (+142%) – increased diagnostic test revenues
    • Valeant (+110%) – continuing stream of acquisitions
    • Atrium Innovations (+103%) – being taken private at $24 per share
    • Novadaq Technologies Inc. (+96%) – increased revenues, large financing and new products
    • Cangene Corp. (+85%) – being acquired by Emergent BioSolutions at US$3.24 per share
    • Tekmira Pharmaceuticals Corp.(+70%) – financing and continued clinical progress in the field of RNAi therapeutics
    • CML Healthcare (+62%) – acquired by LifeLabs Medical Laboratory Services at $10.75 per share
    • IntelliPharmaCeutics International Inc. (+62%) – U.S. FDA approval (2 doses) and tentative approval (4 doses) of its generic dexmethylphenidate HCl extended-release capsules
    • Neptune Technologies & Bioresources, Inc. (+54%) – bounce due to recovery from November 2012 facility fire
    • Response Biomedical Corp. (+46%) – bounce from 2012 lows

Among these 15 companies, 5 companies were being acquired or taken private and 5 companies had increased revenues. There were no cases where late-stage clinical data was the major trigger.

  • Six companies had  share price declines of more than 40%, with my personal perspective on the main reasons for the share price movement
    • Acasti (-40%) – Phase 2 data did not meet market expectations
    • biOasis Technologies Inc. (-47%) – preclinical data or speed of progress toward the clinic did not meet market expectations
    • IMRIS, Inc. (-55%) – increase in sales and progress towards profitability did not meet market expectations
    • Oncolytics Biotech Inc. (-58%) – one major institutional seller and clinical data did not meet market expectations
    • Resverlogix Corp. (-70%) – Phase 2b trial did not meet primary clinical endpoint
    • Trimel Pharmaceuticals (-79%) – regulatory complications / delay and financing substantially below market

Among these 6 companies, the main trigger was a failure to meet market expectations for released data, clinical progress or increased revenues.

[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.]

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