November 8, 2017

Q3 Share Price Performance in 2017 - Part 2


Tier 1 Canadian Healthcare Companies: Mixed and Volatile Performance

In this blog post, I am going to comment on the Q3 and 9-month performance of the group of 51 companies with share prices of $1.00 or more to start 2017. Novadaq Technologies and Merus Labs are not included in this analysis as they were acquired in Q3.

Q3 2017 Analysis

  • Decliners outnumbered advancers by 31 to 20
  • Average and median share price changes were +0.9% and -4.8%, respectively: 
  • Eight companies had share price increases of 40% or more
    • CohBar (+109%) – is developing mitochondrially-active drug candidates for several diseases, starting with NASH and obesity; in Q3, the company completed a US$5.2 M financing, presented at a Rodman & Renshaw conference and continued to move its lead drug candidate towards clinical trials to start in 2018
    • Æterna Zentaris Inc. (+99%) – announced that FDA has designated a PDUFA date of December 30 for Macrilen, by which it will be almost 3 years since the FDA issued a complete response letter to the company’s NDA
    • Helius Medical Technologies (+76%) – announced an extension of its agreement with the U.S. Army for the development of its PoNS device for treatment of patients with traumatic brain injury
    • Arbutus Biopharma (formerly Tekmira; +72%) – Alnylam Pharmaceuticals announced positive Phase 3 data from the APOLLO Phase 3 study of patisiran, for which it intends to file an NDA in late 2017 and an MAA in early 2018; this drug candidate uses a drug delivery technology for which Arbutus would be owed single digit royalties on sales
    • Fennec Pharmaceuticals (formerly Adherex; +71%) – announced the company’s listing on the NASDAQ capital market and an oral presentation of more Phase 3 data for its lead drug candidate at a conference on October 14th
    • Aralez Pharmaceuticals (+63%) – the company made no announcements which would account for the mid-September share price movement
    • Covalon Technologies (+60%) – announced Q2 results with increased sales and profitability
    • biOasis Technologies (+57%) – the share price movement appears to be linked to management changes
  • When a company share price has doubled in a quarter after essentially not moving for a year, investors should ask what could make the share price move further. After its share price doubled in Q3, CohBar’s share price almost doubled again in the first few days of October after announcing that preclinical animal data will be presented in a poster session at a conference on October 23rd. An investor should then ask what quality of data the market is expecting and what is the relative likelihood of the market being disappointed or pleasantly surprised by the data release. These are general questions which could be asked of many large share price moves in many sectors including healthcare. The question of when to sell your winners also must be asked – do you sell all or part of your position at predetermined price gains/losses, incrementally buy as the price climbs based on data and/or momentum, hold forever or use other criteria.
  • Five companies had share price declines of more than 40%

  • ESSA Pharma (-49%) – no negative news in Q3, just the share price settling lower after the disappointing clinical news in Q2
  • IntelliPharmaCeutics International (-53%) – an FDA advisory committee voted 22 to 1 recommending that the Company’s NDA for Rexista™ abuse-deterrent oxycodone hydrochloride extended release tablets should not be approved at this time
  • Cardiome Pharma (-54%) – the FDA advised Cardiome that the proposed data package for a resubmission of the BRINAVESS® NDA would not be sufficient
  • CRH Medical Corporation (-56%) – Q2 results were good but the share price was impacted by lower reimbursement expected in 2018 and Q3 guidance that was below market expectations
  • DelMar Pharmaceuticals (-63%) – no negative news but the decline starting in mid-2016 highs continued

Tier 1 Companies Q3, 2017

9-Month 2017 Analysis

  • Decliners more than doubled the number of advancers by 35 to 16
  • Average and median share price changes were +1.5% and -10.5%, respectively
  • Volatility creates trading opportunities as 20 of 51 (39%) of the companies had share price changes of 40% or more
  • Seven companies had share price increases of 40% or more
    • Fennec Pharmaceuticals (formerly Adherex; +424%)
    • Aurinia Pharmaceuticals (+176%)
    • Theratechnologies (+174%)
    • Arbutus Biopharma (formerly Tekmira; +153%)
    • Covalon Technologies (+123%)
    • Helius Medical Technologies (+84%)
    • CohBar (+72%)
  • Thirteen companies had share price declines of more than 40%
    • Helix Biopharma (-42%)
    • Æterna Zentaris (-47%)
    • Crescita (-47%)
    • Concordia Healthcare (-48%)
    • Aralez Pharmaceuticals (-52%)
    • CRH Medical Corporation (-55%)
    • Xenon Pharmaceuticals (-62%)
    • IntelliPharmaCeutics International (-66%)
    • Ceapro (-67%)
    • DelMar Pharmaceuticals (-74%)
    • TearLab Corporation (-74%)
    • Critical Outcome Technologies (-77%)
    • ESSA Pharma (-88%)

If the top performer in the group is dropped from the analysis, the average share price change drops from +2.5% to -6.0%. If the top 3 performers in the group are dropped from the analysis, the average share price change drops to -13.5%.

In the next blog, I will asses the Q3 and 9-month 2017 share price performances 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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