April 20, 2015

Q1 2015 Share Price Performance (Part 2)


Good Share Price Performance for the Tier 2 Canadian Healthcare Companies in Q1 2015


Good Q1 2015 share price performance was not limited to the Tier 1 companies. The average share price increase in Tier 2 was 17% versus the 13% increase for Tier 1 companies. However, the Q1 2015 average share price change for Tier 2 companies was only half of the +33% average in Q1 2014. As expected, there was more volatility in the Tier 2 group with 15 out of 52 companies (29%) having share price changes of 40% or more versus 9 out of 47 companies (19%) in Tier 1. There were a few Tier 2 companies where a ‘bounce from a bottom’ was a significant part of the Q1 share price movement (see company comments below).

In this blog, I am going to comment on the Q1 performance of the group of 52 companies with share prices of between $0.10 and $0.99 to start 2015.

  •  Advancers outnumbered decliners by 30 to 22
  •  Average and median share price increases were 17% and 9%, respectively2015Q1_Part2_Image1E2
  •  Eleven companies in this group had share price increases of 40% or more Resverlogix (+218%) – bounce from a bottom but there were no significant announcements in Q1 to account for this share price increase
    •  Theratechnologies (+172%) – bounce from a bottom, announced a partner in some EU markets but financial concerns appear to have been ignored
    •  Spectral Medical (+151%) – bounce from a bottom and announced a possible interim analysis in Q4 of the pivotal Toraymyxin trial
    •  Vanc Pharmaceuticals (+136%) – announced that 14 generic drugs had been approved for formulary listing by B.C. Pharmacare
    •  Tribute Pharmaceuticals (+105%) – announced improved financial results for Q4 2014
    •  Agility Health (+96%) – completed a financing and announced an expansion of its rehab services agreement with Ford
    •  Patient Home Monitoring (+80%) – announced organic growth, improved financial results and tentative agreements for new acquisitions
    •  Telesta Therapeutics (+69%) – confirmed intent to file BLA for MCNA bladder cancer therapeutic by the end of Q2
    •  Replicel Life Sciences (+54%) – bounce from a share price bottom
    •  Oncolytics Biotech (+48%) – received additional orphan drug designations from the U.S. FDA for REOLYSIN and completed enrollment in a randomized Phase 2 colorectal cancer trial
    •  Revive Therapeutics (+42%) – announced expansion of the orphan drug indications for bucillamine to include treatment of cystinuria and Wilson disease
  •  Four companies had a share price decline of more than 40%
    •  Medifocus (-64%) – continuation of longer term decline
    •  Antibe Therapeutics (-66%) – announced suspension of Phase 1 clinical trial due to safety concerns
    •  Miraculins (-66%) – no significant events to account for quarter-long share price decline
    •  Amorfix Life Sciences (-75%) – the infamous ‘review all strategic alternatives’ press release caused the share price to collapse


Advancers / Decliners for Tier 2 Companies in Q1 2015


Average Share Price Change for Tier 2 Companies in Q1 20152015Q1_Part2_G2

Medical Marijuana Group

Seven medical marijuana companies listed on the TSX Venture Exchange (tickers APH, BCC, BED, MT, OGI, TPI, TWD) will be monitored for share price performance in 2015. Most of these companies have been public for less than 12 months. There are other companies in this sector which are listed on other exchanges or are private. Most companies in this sector are in the early stages of commercialization, either still seeking Health Canada licenses or not yet profitable.

  •  There were 4 advancers and 3 decliners in Q1
  •  Average and median share price increases were 4% and 2%, respectively
  •  One company had a share price increase of 40% or more
    •  Canadian Bioceutical (BCC; +56%) – improved its financial position by converting all remaining LTD to equity; very low trading volume and value
  •  Tweed Marijuana (TWD) completed a $21.7 M bought deal offering in Q1

Looking Ahead

  •  Many Canadian investors remain risk averse and are primarily focused on revenues, profits and distributions. The key groups in Canadian healthcare are the Therapeutics – Commercial and Services groups. Financial results, acquisitions and the potential to be acquired will be critical to their share price performance and stability or growth of distributions.
  •  The largest Canadian sector is Therapeutics – Development companies, with 16 Tier 1 and 16 Tier 2 companies out of the 99 total companies. From my personal perspective, this is the most interesting sector because there is a combination of science and finance which must be assessed. However, it is also the most risky and volatile – 9 of 32 companies had share price changes of 40% or more in Q1. Share prices for companies in this group can move on momentum, anticipation of news, announcement of clinical data and regulatory events.
  •  Performance of this sector will always be impacted by U.S. biotech trends, performance and trends such as continued M&A activity for the larger pharmaceutical companies, and broad stock market performance and trends.

[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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