GLOBAL fears about bird flu and renewed investor interest in the life-sciences sector helped Australian biotechnology stocks outpace the All Ordinaries and the US Nasdaq Biotechnology Index in the second half of 2005.
A biotech index prepared by stockbroker Intersuisse climbed 23.2 per cent in the six months to December 31, compared with the All Ordinaries (up 11.3 per cent) and the Nasdaq subindex (up 14.5 per cent).
Leading the surge was drug maker Biota Holdings, manufacturer of flu antiviral Relenza. Biota's share price soared 251 per cent from 42¢ to $1.48 in the December half-year.
Melbourne-based stem-cell developer Mesoblast also performed strongly, its share price rising 177 per cent to $1.19.
But the stellar performance of biotech shares in the six months to December 31 was not enough to offset a poor start to the year. Biotech stocks monitored by Intersuisse fell 5.8 per cent over the course of 2005, while the All Ordinaries gained 16.2 per cent and the Nasdaq 2.8 per cent. Twenty-two biotech stocks monitored by Intersuisse finished the year with a gain and 54 fell.
Intersuisse research manager Peter Russell said dour predictions about the global economic outlook in the first half of 2005 caused investors to abandon biotech stocks — traditionally seen as risky or long-term investments. As well, Australian investors became disenchanted with biotech stocks early in the year after several highly publicised drug trials — such as Metabolic Pharmaceuticals' trial of an obesity drug — did not produce the revolutionary results expected. In the first quarter of 2005, the Intersuisse index fell 15 per cent.
Mr Russell said Australian biotech stocks would probably continue their roller-coaster ride in 2006. "It's a very announcement-driven industry," he said. "Sometimes people get excited and think about the future prospects of biotech, while other times they realise it's an industry that takes a long time to produce results."
THE BEST OF 2005Pharmaxis ▲ 174 $2.08Biota Holdings ▲ 173 $1.48Life Therapeutics ▲ 127 $1.45Mesoblast ▲ 89 $1.19THE WORST OF 2005Polartechnics ▼ 74 10.5¢Compumedics ▼ 73 11.5¢Antisense ▼ 71 3.6¢Benitec ▼ 66 16¢
