Tier 2 Canadian Healthcare Companies: Moderately Negative with Usual High Volatility

In this blog, I am going to comment on the Q3 and 9-month 2017 share price performance of the group of 64 companies with share prices of between $0.10 and $0.99 to start 2017 (excludes Immunotec which was taken private in Q2 and OncoGenex which was acquired-RTO in Q3).

Q3 2017

  • Decliners almost doubled the number of advancers by 40 to 24
  • Average and median share price changes were -4.4% and -9.3%, respectively
  • Five companies in this group had share price increases of 40% or more
    • Titan Medical (+143%) – announced hospital partnerships for the testing of its robotic surgical system
    • Diamedica (+65%) – announced a Phase 2 clinical trial of DM199 in patients who have suffered an acute ischemic stroke
    • InMed Pharmaceuticals (+56%) – the increase does not appear t be related to any specific announcement
    • Hemostemix (+47%) – the increase may be related to completion of a financing and perhaps also a bounce from a share price bottom
    • Pascal Biosciences (41%) – appears to be volatility as the share price bounces along a bottom
  • Five companies had a share price decline of more than 40%

  • Agility Health (-42%) – no major news; appears to be a continuation of a share price decline
  • Vaxil Bio (-43%) – no press releases and sporadic, low-volume trading
  • GeneNews (-50%) – no major news; appears to be a continuation of a share price decline
  • DMD Digital Health Connections Group (-55%) – positive financial report but sporadic, low-volume trading
  • Imaging Dynamics (-70%) – appears to be a continuation of a share price decline, perhaps affected by the impact by a financing of the Chinese subsidiary

 

Tier 2 share price changes were 40% or more (positive and negative) for 10 out of 64 companies (16%) in Q3 versus 20 out of 65 (31%) in Q2. For all five Tier 2 companies with share price decreases greater than 40%, there was no major negative news.

9-Month 2017

  • Decliners outnumbered advancers by 38 to 26
  • Average and median share price changes were +1.6% and -8.3%, respectively
  • Thirty-two of sixty-five companies (49%) had share price changes, positive or negative, greater than 40%
  • Fifteen companies in this group had share price increases of 40% or more
    • Oncolytics Biotech (+138%)
    • IBEX Technologies (+135%)
    • Diamedica (+133%)
    • Imperial Ginseng Products (+131%)
    • InMed Pharmaceuticals (+117%)
    • VentriPoint Diagnostics (+104%)
    • Patient Home Monitoring (+94%)
    • Theralase Technologies (+86%)
    • Hamilton Thorne (+62%)
    • ImmunoVaccine (+62%)
    • ProMIS Neurosciences (formerly Amorfix; +53%)
    • Spectral Medical (+53%)
    • Revive Therapeutics (+52%)
    • Vigil Health Solutions (+52%)
    • Microbix Biosystems (+45%)
  • Seventeen companies had a share price decline of more than 40%

  • NeutriSci International (-40%)
  • Breathtec BioMedical (-41%)
  • Pascal Biosciences (-44%)
  • Hemostemix (-45%)
  • Antibe Therapeutics (-47%)
  • RepliCel Life Sciences (-48%)
  • Liberty Biopharma (-49%)
  • Luminor Medical Technology (formerly Miraculins; -50%)
  • Agility Health (-50%)
  • Delivra (-55%)
  • Lattice Biologics (-58%)
  • BlueOcean NutraSciences (-64%)
  • Bionik Laboratories (-66%)
  • GeneNews (-69%)
  • KDA Group (-72%)
  • Imaging Dynamics (-76%)
  • Eternity Healthcare (-84%)

Medical/Retail Marijuana Group

Nineteen public Canadian marijuana companies are being monitored for share price performance in 2017. There are now more than 50 marijuana companies listed on Canadian exchanges. Most companies in this sector are in the early stages of commercialization, either still seeking Health Canada licenses or not yet profitable.

  • There were 12 advancers and 7 decliners in Q3; 8 advancers and 11 decliners in the first 9 months of 2017
  • Average and median Q3 share price changes were +17.2% and +17.5%, respectively; +19.6% and -1.0% in the first 9 months of 2017
  • Four companies (tickers MJ, THCT, MJN, MGW) had a Q3 share price increase of 40% or more while no companies had Q3 share price decreases of 40% or more

The Canadian government intends to legalize recreational marijuana on July 1, 2018 as originally announced. Ontario has announced a highly-controlled retail distribution system but there are still enormous unknowns about how the market will function.

Looking Ahead

Most of the Canadian healthcare companies in our analysis are microcaps and, unless US trends drive investors to the sidelines, there is no correlation between their performance and US market performance. The share price changes which I have summarized and assessed each quarter generally reflect Canadian trends in retail trading, general sector sentiment, broad stock market trends and, most importantly from my perspective, corporate events and performance. Larger share price increases were generally related to positive product or financial news whereas the larger decreases were usually related to concerns about financial viability or volatility from low-volume trading.

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.]

As with all our posts, please see our full legal disclaimer.