October 23, 2014
Q3 2014 Share Price Performance (Part 2)
In this blog, I am going to comment on the Q3 performance of the group of 60 companies which had share prices of between $0.10 and $0.99 to start 2014.
Q3 Results
- Decliners barely outnumbered advancers by 30 to 29 (Welichem Biotech not included in this analysis)
- Average and median share price changes were +1% and -1%, respectively
- Six companies had a share price increase of 40% or more
- TSO3 (+105%) – positive updates on the U.S. FDA review of its STERIZONE VP4 sterilizer
- Microbix Biosystems (+71%) – started with litigation re. its VIRUSMAX patent against Novartis, followed by completion of a $2 million financing
- Miraculins (+66%) – bounce off share price bottom, completed $0.5 million financing and signed China partnership for diabetes screening device
- ProMetic Life Sciences (+59%) – ProMetic should be part of the senior group based on its market cap over $750 million and will probably be moved to the Therapeutics – Development group; announced product progress and a $20 million debt financing
- Revive Therapeutics (+56%) – bounce on sporadic trading
- GLG Life Tech (+40%) – bounce on changes to terms of convertible debt
- Six companies had a share price decline of more than 40%
- Diamedica (-40%) – continuance of share price decline from previous quarter
- Tribute Pharmaceuticals (-40%) – share price slide from pre-financing high; completed $30 million financing and made commercial progress
- Agility Health (-41%) – previously announced acquisition discussions were terminated; continuance of share price decline from previous quarter
- Trimel Pharmaceuticals (-46%) – decline probably related to U.S. regulatory discussions on restricting use of testosterone products
- Cardiocomm Solutions (-50%) – continuance of share price decline from previous quarter
- Sunshine Biopharma (-57%) – no negative news but declined on sporadic trading volumes
9-Month Summary
- Decliners slightly outnumbered advancers by 32 to 27
- Average and median share price changes were +26% and -8%, respectively
- Fourteen companies had share price increases of 40% or more, six of which were in the Therapeutics – Development sector
- Eleven companies had a share price decline of more than 40%, four of which were in the Therapeutics – Development sector
Conclusions
Overall, Q3 2014 share price performance reflects the continuing loss of momentum in the sector. This can be illustrated by the following table. The quarterly +40% / -40% ratio declined progressively during 2014 for both the senior and junior companies and the sector overall.
Among the senior group of companies, investors had been chasing the Therapeutics – Commercial companies, looking for acquisition candidates including those with ‘tax inversion’ potential. While this group slowed substantially in Q3, the remaining 8 companies (Nordion was acquired) in this group still had an average share price increase of +14% in Q3. It will be interesting to see what impact, if any, the termination of Auxilium’s proposed acquisition of QLT will have on valuations in this group.
In the junior group of companies, it was the Therapeutics – Development companies which had surged in the first half of 2014 but no group dramatically outperformed or underperformed in Q3.
My personal perspective is that Q4 will be quiet with limited sector momentum in either direction but there will still be some share price volatility and a number of companies with share price changes of 40% or more.
[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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