July 19, 2017

Q2 Share Price Performance in 2017 - Part 3

In the final instalment of this analysis, I will comment on the Q2 and H1 2017 share price performance of the group of 65 companies with share prices of between $0.10 and $0.99 to start 2017 (excludes Immunotec which was taken private in Q2).

Overall, Tier 2 Canadian healthcare companies had a moderately negative performance with usual volatility.

Q2 2017 Summary

  • Decliners outnumbered advancers by 39 to 26
  • Average and median share price changes were -3.5% and -13.0%, respectively
  • Nine companies in this group had share price increases of 40% or more
    • DMD Digital Health (+115%) – share price increases from Q1 continued, with some impact from improved financial results
    • Hemostemix (+88%) – bounce from a bottom on sporadic and low volume trading
    • Patient Home Monitoring (+67%) – bounce starting in March, helped by improved financial results
    • BELLUS Health (+65%) – no specific event-based movement but obviously related to development of BLU-5937 for chronic cough
    • ProMIS Neurosciences (+55%) – increase appears to have happened after an investor conference presentation
    • Vigil Health Solutions (+54%) – steady share price increase in Q2 continued trend of prior quarters, triggered by improving sales and profitability
    • Hamilton Thorne (+52%) – steady share price increase in Q2 continued trend of prior quarters, triggered by improving sales and completion of an acquisition
    • BioMark Diagnostics (+47%) – movement on sporadic and low volume trading
    • Vaxil Bio (+47%) – bounce on sporadic and low volume trading

  • Eleven companies had a share price decline of more than 40%VentriPoint Diagnostics (-40%) – no major news, slow drift down from a Q1 high
    • Eyecarrot Innovations (-41%) – no major news, slow drift down from a Q1 plateau
    • Liberty Biopharma (-44%) – no major news, slow drift down from a Q1 high
    • Lattice Biologics (-45%) – no major news, slow drift down from a Q1 plateau
    • Eternity Healthcare (-47%) – no major news, bouncing along a bottom after an early 2017 price spike
    • CVR Medical (-47%) – no major news, slow drift down from a Q1 high, partially impacted by pricing of a financing
    • BlueOcean NutraSciences (-48%) – no major news, slow drift down from a Q1 plateau
    • GeneNews (-49%) – no major news, slow drift down from a Q1 high; slight uptick at end of Q2 on financing news
    • Antibe Therapeutics (-55%) – no major news, slow drift down from a Q1 high with a drop also due to pricing of a financing
    • Titan Medical (-60%) – no major news, decline appears to be mostly due to the pricing of a financing
    • Luminor Medical (-67%) – no major news, steady drop from a Q1 high

 

There is nearly always more volatility in the share prices of Tier 2 companies than the share prices for Tier 1 companies. In Q2, 10 out of 53 (19%) Tier 1 companies had share price changes of 40% or more (positive and negative), whereas 20 out of 65 (31%) Tier 2 companies had share price changes of 40% or more.

For all 11 Tier 2 companies with share price decreases greater than 40%, my comment started with ‘no major news’.

H1 2017 Summary

  • Decliners outnumbered advancers by 36 to 29
  • Average and median share price changes were +7.7% and -7.4%, respectively
  • 29 out of 65 companies (45%) had share price changes, positive or negative, greater than 40%
  • 16 companies in this group had share price increases of 40% or more
    • VentriPoint Diagnostics (+150%)
    • DMD Digital Health Connections (+143%)
    • Patient Home Monitoring (+143%)
    • IBEX Technologies (+140%)
    • Hamilton Thorne (+107%)
    • Oncolytics Biotech (+96%)
    • Imperial Ginseng Products (+92%)
    • Revive Therapeutics (+83%)
    • ImmunoVaccine (+75%)
    • Vigil Health Solutions (+60%)
    • Spectral Medical (+60%)
    • ProMIS Neurosciences (+59%)
    • BELLUS Health (+53%)
    • Theralase Technologies (+51%)
    • Diamedica (+42%)
    • Vaxil Bio (+40%)
  • 13 companies had a share price decline of more than 40%
    • NeutriSci International (-40%)
    • Delivra (-40%)
    • Antibe Therapeutics (-47%)
    • Luminor Medical (-50%)
    • Lattice Biologics (-50%)
    • BlueOcean NutraSciences (-50%)
    • Liberty Biopharma (-52%)
    • Titan Medical (-56%)
    • Pascal Biosciences (-60%)
    • KDA Group (-60%)
    • Bionik Laboratories (-61%)
    • Hemostemix (-63%)
    • Eternity Healthcare (-82%)

 

Medical/Retail Marijuana Group

Nineteen public Canadian marijuana companies are being monitored for share price performance in 2017. Most companies in this sector are in the early stages of commercialization, either still seeking Health Canada licenses or not yet profitable.

  • There were 3 advancers and 16 decliners in Q2; 7 advancers and 12 decliners in H1
  • Average and median Q2 share price changes were -14.0% and -20.3%; +1.5% and -12.8% in H1
  • Only one company (True Leaf Medicine) had a Q2 share price increase of 40% or more while two companies (THC Therapeutics, Maple Leaf Green World Inc.) had Q2 share price decreases of 40% or more

The Canadian government announced some details on the decriminalization/legalization of marijuana use in early Q2. The stock market had anticipated that the legislation would create a highly-controlled market with large potential revenues but with many unknowns. The continued lack of information and clarity led to the Q2 sector share price declines and we do not expect any major clarification in Q3.

Looking Ahead

U.S. indices continue to climb higher. Q1 earnings were good but there was a mixed message about future growth. The pharma and biotech companies are still hoping for tax reductions and trusting that there will not be any agreement on drug price controls. I see no reason to change the following comment from the last few blogs.

You are probably going to have to pick individual winners in Canadian healthcare – whether you choose to bottom-fish, look for near-term events or expect improved financial 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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