April 13, 2015

Q1 2015 Share Price Performance (Part 1)


Overall Share Price Performance for the Canadian Healthcare Sector Comparable to U.S. Biotech


In order to assess share price performance among the Canadian public healthcare companies, I select companies at the beginning of each year which are categorized in two ways: share price to start the year and type of company. The share price categories have remained the same: $1.00 or more (Tier 1 or senior), $0.10 to $0.99 (Tier 2) [companies with share prices below $0.10 are monitored but only major events will be mentioned]. In 2015, the share price performance of a group of 7 medical marijuana companies will also be reported.

The following graph compares the number of companies in the various categories for 2013, 2014 and 2015.


Overall, Q1 2015 share price performance in the sector was very good. For the 99 companies starting 2015 with share prices of $0.10 or higher, advancers outnumbered decliners by 59 to 40. There were 18 companies with share price increases of 40% or more, whereas only 6 companies had share price declines of 40% or more.

An investor might ask ‘why should I invest in Canadian healthcare – how does its average change of +15.0% compare with some benchmarks in Q1?’

TSX Composite +  8%

TSX-V Composite –   2%

NASDAQ Composite +  5%

NASDAQ Biotechnology +13.2%

There was a sector surge in U.S. biotechnology in Q1 based on the amazing sales of the hepatitis C drugs and on continuing M&A activity. There was no sector surge in Canadian healthcare but its overall performance was comparable to that of the U.S. biotechnology group.

In this blog, I am going to comment on the Q1 performance of the group of 47 companies with share prices of $1.00 or more to start 2015. There were only 39 companies in this group in 2014; some companies exited as a result of acquisition, privatization or share price declines but more companies moved up from the Tier 2 lower share price category. Three companies in the group have only NASDAQ listings – Tekmira dropped its TSX listing and both Xenon Pharmaceuticals and Aquinox Pharmaceuticals completed NASDAQ IPOs.2015_Q1_QR

  •  Advancers outnumbered decliners by 30 to 17
  •  Average and median share price increases were 13% and 10%, respectively
  •  Seven companies had share price increases of 40% or more
    •  Trillium Therapeutics (+144%) – hot target, hot U.S. biotech market, most shares are traded on NASDAQ and US$50 M financing announced on March 30
    •  Nobilis Healthcare (+82%) – increased revenues and improved profitability
    •  Concordia Healthcare (+82%) – acquired a portfolio of 18 products from Covis Pharma for US$1.2 B cash; term loans from RBC and C$320 M bought deal will finance the transaction
    •  CRH Medical (+76%) – 2 acquisitions in the anesthesia services area, C$27.4 M bought deal and good Q4 results
    •  Valeant Pharmaceuticals (+50%) – after you lose on a big one (acquiring Allergan), you buy a couple smaller ones (Dendreon and Salix)
    •  Neovasc (+48%) – listed on NASDAQ and raised US$75 M in a US-based financing
    •  Merus Labs (+40%) – improved financial results and continued investor interest in the Therapeutics – Commercial sector
  •  Two companies had a share price decline of more than 40%
    •  Nuvo Research (-40%) – WF10 Phase 2 clinical results were not statistically significant
    •  Genenews (-60%) – appears to be due to increased trading volume and financial concerns


 Q1 2015 Overview of Tier 1 Companies in the Canadian healthcare industry


 Q1 2015 Overview of Tier 1 Company Share Price Performance (%)


[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. Past share price performance may not be an indicator of future share price performance. This blog does 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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