BGN bresagen limited

biotechs volatility

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    BresaGen in biotech puzzle

    January 23 2003
    By Scott Rochfort

    Biotech analysts were yesterday confounded by the latest erratic share price movements in the sector after BresaGen shares surged more 40 per cent without any announcement from the company, with Gradipore and Peptech also soaring.

    After opening at 43 cents, trading in the Adelaide company was relatively sedate until the late morning when its shares shot up to 62 cents before easing throughout the day to close up nine cents, or 20 per cent, at 52 cents, with more than three million being traded.

    Some dealers suggested the volatility - mirroring other recent share price spasms from companies such as Circadian and Gradipore - could be driven from the recent upsurge in day-traders' appetite for biotechs.

    Taylor Collison's Kym Masters said retail investors were most likely buoyed by the news that stem cell researchers at St Vincent's Hospital had found a possible treatment for brain diseases such as multiple sclerosis. The research, however, is unrelated to BresaGen's stem cell research, which focuses on the treatment of Parkinson's disease.

    Mr Masters even suggested that the visit to Australia of former Superman star Christopher Reeve could have raised awareness in stem cell research, and hence retail interest in BresaGen.

    Intersuisse's Peter Russell was at a loss to explain BresaGen's rise. "I'd like the answer to that too. We just can't fathom it.

    "Perhaps a few people are feeling that they can make money at the spec end," he said.

    Mr Russell said there were signs some investors were responding over-enthusiastically to the select group of biotechs that showed any hint of commercial promise, given the heavy sell-off across the whole sector in 2002.

    Novogen, Sirtex, Peptech were among the recent biotech favourites, and highlighted the artificial heart developer Ventracor, which started trials in late December, he said. The company's share price hit an all-time high of $1.38 yesterday, on heavy volume exceeding six million shares.

    Gradipore was recently asked by the ASX to explain why its shares rose 30 per cent in less than a week.

    Peptech was asked to explain why its shares rose from $1.66 to $2.07 in five days.
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