April 6, 2017

Q1 Share Price Performance in 2017 - Part 2

Tier 1 Canadian Healthcare Companies – positive based on both financial and clinical results

In this blog, I am going to comment on the Q1 performance of the group of 50 companies with share prices of $1.00 or more to start 2017.

  • Advancers slightly outnumbered decliners by 27 to 23
  • Average and median share price changes were both 9% and 2%, respectively
  • Six companies had share price increases of 40% or more
    • Aurinia Pharmaceuticals (+245%) – Chairman Richard Glickman assumed the CEO role, announced very positive Phase 2b data for voclosporin in treating lupus nephritis, confirmed a pathway to regulatory approval with a single Phase 3 study and completed a US$173.1 M financing.
    • Theratechnologies (+124%) – announced increased sales of EGRIFTA and additional Phase 3 data on its second product ibalizumab.
    • VBI Vaccines (+75%) – received positive feedback from regulatory agencies on the proposed structure of Phase 3 clinical trials for its hepatitis B vaccine.
    • Fennec Pharmaceuticals (+57%) – no major announcements; the key event for the company will be the expected Q4 release of clinical data from the SIOPEL 6 study testing STS for the reduction of hearing loss caused by cis-platin chemotherapy.
    • CRH Medical (+52%) – announced good financial results and continued expansion of its anesthesia business.
    • ESSA Pharma (+40%) – reversal of the previous share price decline appeared to be related to the expectation of clinical results from the Phase 1 trail of EPI-506 in prostate cancer during the first half of calendar 2017, followed by the start of a Phase 2 trial.
  • Two companies had share price declines of more than 40%
    • Xenon Pharmaceuticals (-48%) – announced that XEN801 did not demonstrate a statistically significant difference from vehicle placebo for the treatment of moderate to severe facial acne.
    • Aralez Pharmaceuticals (-52%) – announced financial results which did not meet market expectations.

  • There are no diagnostic or healthcare IT companies in the Tier 1 group.
  • Therapeutics has always been the largest group in Tier 1 – 68% of the group in 2017.
  • When looking at average share price changes, the results of a single company may distort the group performance. For example, removing the Aurinia performance from the Therapeutics – Development analysis reduces the average change from 18% to 7%.
  • Most of the companies with share price changes of more than 40% made announcements which triggered those changes, unlike some prior quarters where many share prices bounced off chart bottoms for no specific reason.
  • Small caps investors are often, if not mostly, interested in short-term performance. Boards and management of drug development companies, with product development timelines of 10 to 15 years, have always been challenged by these short-term investment strategies which create much of the sector volatility.

In the next blog, I will asses the Q1 2017 share price performance of the Tier 2 Canadian healthcare companies and report on the performance of the marijuana sector.


[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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