biotechs

Hi Folks

Hasnt this index disappointed many of us?

Sentiment has and is changing towards this sector....I think for the worst.

Many once hailed companies are in deep trouble and or long term downtrends.

The promise of big rewards wonder drugs and share price multiples are finally, albeit slowly being digested by a market that is at the beginning stages of understanding some of the processes and impediments./obstacles/cash etc that it takes to make it in the big league.

AMRAD is a great example. An excellent pedigree. Several very well publicised drug compounds...its now 41 cents just off 12 mth lows.

CIRCADIAN is but a shadow of its former self. 1.26 and just hovering above 12 month lows.
Its portfolio has taken a hammering: Amrad, ANP and MBP inparticular have been dramatically sold down.
Axon has been swallwed up by molecular devices USA...Optiscan being the only real shining light and even that is way off its highs of several years back.

Like CIR, portfolio stocks like Biotech Capital and Cytopia are just above 12 month lows.

PRR is probably the most posted Biotech on Hotcopper. Despite its potential/cash position its barely holding above 10 cents...again just above its 12 month lows.



Of course theres a host of others all at near or below 12 mth lows.
EIF, ALT, SIE, RBY, PSX, ABI, IDT, VCR, STP, CCE, IMU,PTD,SPL, BIT, thens theres Mesoblast, Heartware, Sunshine Heart, etc etc

These companies need regular injections of cash.

Half of these may not even be around in 12- 24 months.

Its an interesting time. The contrarians may very well be licking their lips ready to pounce. The techies too would be starting to get interested,........the fundamentalists? Well who really knows what a company in this sector is 'really worth' anyway? Its hard to value something that theoretically has value 'if' 'x ' amount of trials are positive, get the cash to take a compound through the trials and market it in the hope one of the big boys may take it on board and give you a percentage.
Its hard work for many. Dilution and more dilution, share offers below market to shareholders, off market deals well below market for 'sophisticated investors' etc can double or treble the shares on issue in a few short years. PSX for example had 30 odd million shares on issue just 3 years ago....how many now?

Takeovers can be expected. Then again many companies just dont fit or there arent enough synergies to bring companies together.

Amongst this wreckage...with more falls to continue..there will be opportunities to make multiples on some of these.

Its not all bad news. Some of these companies will prevail.

VCR is one that is worth watching. The recent run up to 1.20 ann indication of how quickly this company can bolt.
With a low of 70 cents its possible it may retest around those levels again.
Its a slow hard road.