"Biotech sector tipped to grow strongly this year by: Anthony Marx From: The Courier-Mail January 10, 2012 9:55AM
THE biotechnology sector travelled a very rocky road in 2011 but it is tipped to grow strongly this year. Market research group IBISworld has identified biotech firms as among the top five "industries to fly", along with diamond and gemstone mining, motor vehicle manufacturing, online shopping and online education.
With numerous Australian biotech companies approaching commercial readiness and receiving increased global investment, IBISWorld has forecast that revenue will grow 10.3 per cent over the coming year to reach more than $2.4 billion.
"While most biotechnology firms are currently not profitable due to their research and development intensity, continuing economic uncertainty will drive growth as leading global investors search for low-risk opportunities like commercial-ready technology that Australia has on offer," IBISWorld general manager Karen Dobie said.
A review of all listed biotech companies found they collectively finished the calendar year up by half a point, even as the S&P ASX 200 dropped 14.5 per cent over the period.
But three of the biggest firms all suffered steep declines. Cochlear lost 21.4 per cent, CSL fell 16 per cent and ResMed plunged 27.3 per cent.
Smaller Queensland biotech entities also got hammered, including CBio, Alchemia and Tissue Therapies.
The share price of CBio collapsed further last month when the Brisbane-base company announced a commercialisation deal for its arthritis drug XToll had been terminated.
Floated less than two years ago at a $1 issue price, CBio shares closed yesterday at 7.5c.
The company's board and senior management resigned following a shareholder revolt late last year over alleged corporate governance and capital management problems. And although CBio has chewed through more than $106 million since 2000 and reported a $13.67 million net loss last year, new management has offered hope of a turnaround.
Cash-squeezed drug developer Alchemia unveiled plans in November to raise $20 million as it launched a major corporate restructuring. The firm suffered a $13.4 million net loss in the last financial year, taking accumulated losses to more than $103 million.
Tissue Therapies remains equally strapped financially, reporting a $5.34 million net loss last year as it aims to commercialise wound-healing products. Like CBio, shares in Alchemia and Tissue Therapies fell sharply over the year."
ACL Price at posting:
28.5¢ Sentiment: Buy Disclosure: Held
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