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biotechs show signs of life

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    Biotechs show signs of life
    Aug 19
    Chris Milne



    There were positive signs that investors were coming back to the biotech sector, Australian Stock Exchange head of business development Richard Murphy said yesterday.

    "Very recently there've been signs of a turnaround in Australia and the rest of the world," Mr Murphy told the AusBiotech 2003 national conference in Adelaide.

    "The IPO market, which was definitely closed a year ago, is reopening."

    Following the recent Select Vaccines listing, there were several more issues in the pipeline.

    Sharebroker Taylor Collison's head of research, Kym Masters, said there was increasing interest from retail investors, helped by several listed biotechs performing "really well" in the past two to three months.



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    Investors were looking more closely at issues such as management experience, stage of product development and route to market this time around.

    "But I don't know whether biotechs have turned the corner yet," Mr Masters said.

    "Certainly there are plenty of potential floats, but it would be a brave man who takes a research biotech to the market just yet."

    Mr Murphy said the ASX was seeking ways to assist the sector to be better understood by the investment community, particularly in overcoming the problem of scientific jargon in company announcements. The mining industry had adopted a code of reporting to make its industry jargon more accessible to investors and the ASX was considering a similar approach with guidelines for biotech announcements, to make them more understandable.

    It also was encouraging an expansion of independent analysts' research in the sector, which was needed by stockbrokers, institutions and financial planners before they recommended biotech stocks.

    However, Mr Murphy said the ASX had no plans to lift the "very low" bar to IPOs, with a minimum $2 million capital raising, as this could cut off a source of early-stage funding, but he agreed many biotechs had gone to market too early.

    The ASX would not reintroduce the second board, which would mean dropping - rather than raising - standards for listings.
 
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