biotechs back in favour

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    Biotechs back as flavour of the month
    Sourced from Courier Mail

    Scott Murdoch
    19aug03

    ONCE considered market duds, biotech stocks have been named as the next big movers by a market-wide survey.

    PricewaterhouseCoopers annual BioForum research was released yesterday and found public companies in its biotech index had increased shareholder value by a hefty 34 per cent in the past quarter.

    Biotechs have endured a tumultuous history but PwC director Lisa Springer said the sector was now well positioned for strong growth.

    The best performing stock in the three months was Benitec which grew 39.7 per cent as it revealed it had obtained a patent on gene silencing technology and entered a collaborative agreement with Tranzyme.

    On the other end of the scale though was Virax Holdings.

    Its recent good run came to a quick halt after it was was belted 62.5 per cent when it shocked the market by announcing its hyped therapeutic vaccine for the HIV virus did not elicit an immune response.

    The company is understood to be carrying out further trials as to why the initial results were not in line with expectations.

    Dr Springer said while the sector-wide results were healthy, investment in the industry was still associated with risk.

    "The difference now is that investors appear to be paying attention and rewarding companies which meet critical development milestones rather than simply ignoring the progress which is a sign of a more positive sentiment," Dr Springer said.

    "The PwC biotech index was up 19.2 per cent for the year. While the stocks performed well, performance was highly varied so the message is that you can't invest in just any biotechnology stock – you must choose very carefully."

    Meanwhile in Queensland, biotech Xenome is continuing trials into pain relief treatments made from deadly venoms.

    The company became the first beneficiary recently of the Queensland Government BioCapital Fund which bought $4 million worth of stock.

    Xenome hopes to use the funding to take the trial of its lead drug, Xen2174, through to clinical trials.

    Cheers,

    Fig Jam
 
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