Biotech Daily

E-mail Subscription

Receive an e-mail notification of new posts on this site:

Spotlight Posts

SIX MONTHS OF BIOTECH GROWTH: BDI-20 UP 93%

BUDGET 2009 SURPRISES BIOTECH SECTOR: FAR MORE THAN EXPECTED

BIOGUIDE: BIG PHARMA GETS IT WRONG - PEPLIN A FIVE-BANGER

WHY IS THERE GOOD NEWS?

CRISIS, WHAT CRISIS? ‘STRUGGLING’ BIOTECHS RAISE $370m-$500m

Editorial: A Once In An Economic Lifetime Opportunity

PEPLIN’S TOM WIGGANS: THIS ISN’T CANCER ANYMORE, TOTO

BIOTECHS A TEST FOR THE TENACIOUS INVESTOR

FRIENDS OF MERVYN & THE PERILS OF OWNER-DRIVERS

[ more ]

Biotech Daily

SIX MONTHS OF BIOTECH GROWTH: BDI-20 UP 93%

June 8th 2009 02:26

Biotech Daily

Monday June 1, 2009

Daily news on ASX-listed biotechnology companies

Subscribe to Biotech Daily at the link above or at www.biotechdaily.com.au

BIOTECH DAILY’S TOP 40 INDEX

This month’s Biotech Daily Top 40 v S&P ASX chart (below) showing six consecutive months of growth is worth a close look.

Biotech Daily is skeptical of “chartists” using price and volume flows to pick winners, but the trend is incontestably upward with the Biotech Daily Top 20 Index (BDI-20) up 93.1 percent for the six months to May 31, 2009, with a slower positive rate for the Second 20.

For the 12 months to May 31, 2009 the BDI-20 was up 23.0 compared to the S&P ASX 200 falling 32.5 percent.

In the month of May, the BDI-20 was up 11.7 percent, the Second 20 was up 7.4 percent giving the BDI-40 an 11.02 percent increase and the lower 60 were also positive. In the same period the S&P ASX 200 was up 0.98 percent. The increase follows the factoring-in of the takeover bids for Arana and Heartware. One respected analyst told Biotech Daily last week that the biotech run was over. Sorry. We don’t think so.

The three Big Caps (which are not in the BDI-40) fell 12.9 percent in May, dragged down by CSL’s 15.7 percent fall to $17.5 billion on the Talecris deal. Resmed fell 13.25 percent but Cochlear climbed 7.9 percent to $3.0 billion.

Twenty-two Top 40 companies were up, 16 fell and two were unchanged. Nanosonics’ 142.4 percent jump was primarily due to the ASX’s inability to include 92,235,861 escrowed shares in its data. Progen’s $45 million or (69.2%) fall to $20 million mostly reflects its $40 million buy-back.

Avexa led the pack, up 107.1 percent on a series of announcements. Acrux was up 95.8 percent to $188 million, followed by Novogen (78.7%) after a helpful blog by former CEO Dr Graham Kelly, Bone (63.6%), Genetic Technologies (58.8%), Genera (50%), Universal Biosensors (43.7%), Chemgenex (40.6%), Benitec (37.5%), Starpharma (26.9%), Clinuvel (26.1%), Phylogica (25%), Optiscan (20%) and Pharmaxis (15.5%).

Cytopia led the falls, down 30 percent to $7 million, followed by Sunshine Heart (25%), Cathrx (20.7%), Phosphagenics (17.7%) and Labtech (13.3%). Among the stocks outside the Top 40, Avita was up 37.5 percent and Compumedics rose 31.6 percent.

Biotech Daily Top 40 ($m) v S&P ASX 200 2008-‘09

Subscribe to Biotech Daily at the link above or at www.biotechdaily.com.au

Vote

Add Comments

[ Link ]

Posted By: Biotech Daily Editor - Category: No Category

Email this Post to a Friend

BUDGET 2009 SURPRISES BIOTECH SECTOR: FAR MORE THAN EXPECTED

June 8th 2009 02:20

Wednesday May 13, 2009

Daily news on ASX-listed biotechnology companies

* BIOTECH SPENDING SUMMARY
* MARC SINATRA’S BIOGUIDE
* INNOVATION MINISTER SENATOR KIM CARR
* WHITE PAPER
* AUSBIOTECH
* BIO-MELBOURNE NETWORK

To read all these articles in full, subscribe to Biotech Daily at the link above or at www.biotechdaily.com.au

FEDERAL BUDGET 2009 SPECIAL EDITION

With expectations set fairly low, the Federal Labor Government’s second Budget appears to have delivered far more than the sector’s call for $600 million.
Budget promises in Treasurer Wayne Swan’s address last night include:
$1.4 billion a year through the 45 percent research and development tax credits;
funding for “world class hospital research and innovation”;
$703.1 million for universities for research across all disciplines;
$196.1 million for four years and $82 million a year indefinitely for the Commonwealth Commercialization institute;
$504 million for biotechnology infrastructure in the Super Science Initiative; and
$27.2 million for 100 research grants.

How The 45 Percent Tax Credit Works
Innovation Minister Senator Kim Carr’s office says the 45 percent refundable tax credit is equivalent to a 150 percent tax concession with more than 5,500 smaller firms expected to benefit.

The tax credit is available at a 40 percent rate for companies with a turnover above $20 million and foreign-owned companies.

“They will receive a cash refund of 45 percent of their research and development spending when they file their tax return. It doubles the tax incentive for smaller firms, restoring support to the level that prevailed before 1996
“Small companies can access the credit whether they are in tax profit or tax loss.”
The measure assists innovative firms in biotechnology, information technology, environmental and medical-technical companies.

“The Government is responding to the immediate affect of the global recession on innovative firms by raising the amount of research and development spending small firms can claim under the current research and development Tax Offset from $1 million to $2 million for 2009-’10,” the Minister’s office said.

Senator Carr’s office said the Commercialising Emerging Technologies (Comet) fund was “not trimmed or changed in any way”.

BIOGUIDE BRIEF NOTE: BUDGET 2009
Having learned a fortnight ago, that for the first time a group of biotechnology industry bodies would have personnel in this year’s Budget lock-down, I felt some optimism and, after last night, this proved well-founded.

Three components of the Budget could have a major impact on our industry.

The first and biggest is the introduction of a system of R & D tax credits of 40% or 45% which should greatly simplify the tax framework. Importantly, according to Kim Carr, “companies can access the credit whether they are in profit or not”.

For a lot of small companies, this means they will see a benefit before they reach that almost mythical state called profit. In my opinion, this new tax system should be very, very good for our industry and the companies within it.

The second is the establishment of the Commonwealth Commercialisation Institute, which will aim to help commercialize “the best ideas developed by our universities and publically funded research organizations”. The institute will have $196.1 million of funding over the first four years as well as $82 million a year after that.

This new institute is an attempt to consolidate and give critical mass to the work of individual commercialization arms of Australia’s universities and other institutions. With many of the details of the institute still to be decided, it is difficult to determine what the benefits and risks will be. Done well, this new institute could be very good for the biotechnology industry. Done, poorly it could cost a lot more than the money put into it.

The final section of the Budget is the Future Industries section of the Super Science initiative, which will see $504 million invested research infrastructure for biotechnology, nanotechnology and information and communications technology. Of particular interest to drug development companies will be the Government’s $35 million commitment to enhance the countries treatment development capabilities.

I have criticized the Government for being too infrastructure focused in the past on the basis that big toys are only useful if you have the minds and skills to develop products from them. Given the Government has addressed the latter two areas in this Budget, this level of infrastructure investment seems appropriate.

Health and education are two other areas that will benefit from this Budget, both of which should have positive flow-on effects for the biotechnology industry.

Overall, the Budget indicates that the Rudd government has not given up on innovation like many had feared after the last Budget and the mix of initiatives are significant and appear well thought-out.

I would still have liked to see some initiatives aimed at later stage commercialization in biotechnology, the end of the process we don’t yet have a lot of experience in. But, the current Budget will still do nicely, thank you.

Marc Sinatra, analyst

Innovation Minister Senator Kim Carr
Through a media officer Senator Carr told Biotech Daily: “The budget package delivers strong benefits for the biotechnology sector. It is one of our industries of the future.”

“Our new R & D Tax Credit, valued at over $1.4 billion per annum, will provide much needed support for biotechnology research and development activity,” Senator Carr said.

He said the 45 percent refundable tax credit was available for Australian owned firms turning over up to $20.0 million a year from 2010-‘11.

“It will help many biotechnology companies and is the equivalent to a 150 per cent tax concession,” Senator Carr said.

“It doubles the base tax incentive for smaller firms, restoring support to the level that prevailed before 1996 - with the added advantage that companies can access the credit whether they are in tax profit or tax loss,” he said.

“Because such a significant change cannot be introduced immediately, as an interim measure, the Commonwealth will raise the amount of research and development spending small firms can claim under the R & D Tax Offset from $1 million to $2 million in 2009-‘10.

“Our new National Enabling Technologies Strategy supported with $38.2m over four years, will assist Australian industry in the responsible take-up of enabling technologies, including both biotechnology and nanotechnology,” Senator Carr said.

“And our new Commonwealth Commercialisation Institute, attracting $196.1 million over four years, will provide assistance with the commercialization of R & D, taking ideas to market and to help innovative young enterprises access private capital,” he said.

“The Review of the National Innovation System argued for a more coordinated approach, with support to match ‘the various identifiable stages of an innovative firm's life’,” he said.

“The Institute will bridge a critical gap by supporting innovative firms to access the expertise and capital they need to cross the chasm between research and commercialization.”

“The Institute will help to shake loose additional private sector capital to leverage Commonwealth support,” Senator Carr said.

He said the Super Science Future Industries package, part of this Governments $1.1 billion Super Science Initiative, provided $504 million to fund infrastructure and facilities for biotechnology to advance disease prevention and food security including: facilities for the study of genes, proteins and cell products; national networks to support drug discovery, novel cell therapies, the development of nano-medicines and integrated population health solutions; a European Molecular Biology Laboratory Partner Laboratory at $18 million to provide access to cutting-edge expertise underpinning developments in biotechnology; and an integrated online biodiversity knowledge base.

“Biotechnology companies will also be able to continue to access the Business Investment tax break.

“The $703.1 million to increase the research capacity of the nation's universities will have significant impact across research in all areas,” Senator Carr said.

Powering Ideas
Separately, Senator Carr said the Government outlined its innovation agenda for the next decade in a White Paper entitled ‘Powering Ideas: An Innovation Agenda for the 21st Century’ which can be downloaded from Really Long Link

Ausbiotech
Ausbiotech chief executive officer Dr Anna Lavelle told Biotech Daily the Budget was “fantastic for the middle term but not in the immediate term”.

“In this grim environment with a tough budget it looks like innovation, science and research has been a big winner,” Dr Lavelle said.

She said Ausbiotech was hoping for immediate assistance for small companies which was not provided by the Budget but the 45 percent Tax Credit measure was very valuable.

“It’s the biggest change in the tax system since the introduction of the tax concession system itself,” Dr Lavelle.

She said that assuming a 30 percent tax rate for every $100 spent on research and development companies would receive $15 cash back.

She said that it would help companies if the payments were made quarterly like the Business Activity Statement for the Goods and Services Tax, rather than having to wait until the end of the year for the rebate.

Dr Lavelle said the Government had allocated $8.5 billion to all of science, education and innovation and 25 percent increase over last year.

The Bio-Melbourne Network
The Bio-Melbourne Network chief executive officer Michelle Gallaher told Biotech Daily that the budget contained direct funding for the sector, an array of measures that would have long term knock-on benefits along with an incalculable contribution through funding health and medical research along with higher education expenditure.

“I think the budget last night is a clear recognition of the value now and in the future of the biotechnology and research sector,” Ms Gallaher said. “I’m very happy with it.”

Ms Gallaher said there were “significant knock-on effects to biotechnology over the coming three to six years” including indirect finding through major investment in the sector’s research partners.

She said the Budget invested in intellectual capital including at PhD and early post-doctorate level and Technical And Further Education (TAFE).

Ms Gallaher said TAFE funding had a direct effect through relevant, timely and responsive courses training laboratory technicians animal laboratory technicians and research assistants along with courses in biotechnology processing and manufacturing.

Ms Gallaher said there would be knock-on effects through a 10 percent increase in funding to the Australian Postgraduate Awards along with the 100 Super Science Fellowships for early post doctorate researchers of $72,000 for three years, of which many would be granted to related fields of medical agricultural and industrial.

“The Valley of Death is still there, but Comet has survived as has the Export Marketing Development Grant which is especially useful to device companies,” Ms Gallaher said.

She said the marketing grant rebated all development costs including attending conferences and international meetings.

Along with the $83 million Innovation Investment Follow-on Fund announced in March (BD: Mar 18, 2009) there was $35 million for preclinical testing facilities.
Ms Gallaher said the most exciting part of the Budget for Biotech was the Commonwealth Commercialization Institute which would help commercialize ideas developed from universities and public research institutes as well as support innovation from potentially rapid growth to take ideas to market.

To read all these articles in full, subscribe to Biotech Daily at the link above or at www.biotechdaily.com.au

Vote

Add Comments

[ Link ]

Posted By: Biotech Daily Editor - Category: No Category

Email this Post to a Friend

BIOGUIDE: BIG PHARMA GETS IT WRONG - PEPLIN A FIVE-BANGER

June 7th 2009 12:55

Biotech Daily

Monday April 27, 2009

Daily news on ASX-listed biotechnology companies

subscribe to Biotech Daily at the link above or at www.biotechdaily.com.au

MARC SINATRA’S BIOGUIDE: PEPLIN

Overview: I gave up following Peplin back in 2004, when Allergan handed back PEP005 after licencing the non-melanoma skin cancer drug from them in 2002.

The willingness of investor of note, MPM Capital, to lead a $40 million dollar capital raising for Peplin in 2006 should have been the signal for me to take another look at them.

Ultimately, it wasn’t until August of last year, when they raised $US24 million in very difficult conditions that they again caught my eye. The positive signal of the raising was reinforced by the fact that arguably Australia’s leading life science investment firm, GBS Venture Partners, led the raising.

Could big pharma Allergan have got it wrong?

Financials: Market cap: $181 million; cash: $33.8 million; last quarter cash burn: $6.1 million.

Directors: Executive chairman and chief executive officer, Thomas Wiggans; president and chief medical officer, Dr Eugene Bauer; non-executive directors, Dr Joshua Funder, Cherrell Hirst, Dr Gary Pace, Michael Spooner and Jim Scopa.

Peplin’s board is excellent - members Wiggans, Bauer and Scopa, particularly so. Chairman and CEO Tom Wiggans looks purpose-built for the job.

Products in Development: Peplin is developing various topical formulations of PEP005 (ingenol mebutate), a plant-derived compound thought to cause local necrosis and activation of the immune system, for applications including actinic keratoses (AK), basal cell carcinoma (BCC) and squamous cell carcinoma (SCC).

1) AK (non-head treatment sites): Treatment consists of a single application of PEP005 (0.05%) to AK’s for two consecutive days. A phase IIb study found a statistically significant 44% complete clearance rate of AKs when applied to contiguous areas of skin containing 4-8 AKs in 55 patients. Enrolment in a phase III trial is complete with results due in the current quarter.

2) AK (head treatment sites): Treatment is likely to consist of a single application of PEP005 (0.015%) for three consecutive days. With this treatment regimen, a phase IIb study found a statistically significant 50 percent complete clearance rate of AKs. A phase III trial is due to start in the current quarter.

3) Superficial BCC: In a phase IIa study, PEP005 (0.05%) cleared a statistically significant 71 percent of cancers when used as in 1, above. A second phase IIa study to determine the maximum tolerated dose in BCC patients is continuing.

4) SCC in situ: In a pilot study, PEP005 (0.05%) cleared 36 percent and 64 percent cancers on histological and clinical basis, respectively, when used as in 1 above.

5) Cutaneous Warts: PEP005 is currently in preclinical trials for this indication.

Significant Product Markets: Seventy-five percent of Americans over 80 years of age have at least one AK and, according to the US National Ambulatory Medical Care Survey database (average 2001-‘05), AKs result in 5.6 million doctor office visits in the US annually. It is believed that in 2008 there were more than one million diagnoses of BCC and 250,000 of SCC in the US.

Treatments for AK, BCC and SCC vary, ranging from surgical excision and cryotherapy to topical treatments.

There are several topical treatments. From an application point of view, Efudex, a 5-fluorouracil cream, is the least burdensome to use. It requires daily application for four weeks. All of the available drugs come with uncomfortable and unsightly side effects that are compounded by the treatment duration.

Aldara (imiquimod 5%), which is thought to activate the immune system, is the highest selling topical treatment generating revenues of $US288 million in 2007. Efudex is thought to generate revenues of $US75 million a year, while Solaraze (diclofenac sodium 3%) generated $US61.7 million in 2008.

Complete AK clearance rates for marketed drugs range from about 30-50 percent.

Opinion: Today’s Peplin is dramatically different to that of years past. It has a clear dermatological focus and much better understanding of its products.

PEP005 (0.05% and 0.015%) with two and three day treatment times is much easier to use than present drugs, while appearing to provide equivalent clearance rates. In addition, while side effects last longer than the treatment, they are only present for a fraction of the time compared to those produced by current drugs.

The superficial BCC and SCC in situ indications are not as clear cut. Although the data is not available for BCC, almost half the SCCs clinically cleared by PEP005 were still present histologically. The current phase IIa maximum tolerated dose study in BCC should determine if higher doses of PEP005 can be used to treat the cancers and provide further insight into likely histologic clearance rates.

Peplin’s strategy is to licence PEP005 in Europe and the rest of the world, while taking it to market on its own in the US. This plan appears to rely heavily on a degree of market pull for the product in the US. If this market pull doesn’t eventuate, Peplin will need to do a licencing deal quickly. I believe that PEP005 will find that market pull and there is little question that Peplin’s chairman and CEO, Tom Wiggans, will be able to take full advantage of it. As I wrote above, he looks tailor-made for the job.

Allergan seems to have got it wrong, while GBS Ventures appears to have found another solid investment, like Chemgenex, amongst Australia’s small cap biotechnology companies.

Based on discounted cash flows, I have arrived at a value of $3.02 per Peplin share.
Peplin closed down half a cent or 0.83 percent at 59.5 cents.

marc@biotechdaily.com.au

subscribe to Biotech Daily at the link above or at www.biotechdaily.com.au

Vote

Add Comments

[ Link ]

Posted By: Biotech Daily Editor - Category: No Category

Email this Post to a Friend