Aussie biotech equities under perform wider market for Q1: PWC

PricewaterhouseCoopers has released its Q1FY11 BioForum report on Australia’s life sciences and biotech equities, revealing that the sector went backwards slightly as the wider market advanced.

While the ASX All Ordinaries rose by 7.2 per cent over the three months to 30 September, PWC’s Life Sciences index fell 0.9 per cent.

This was in contrast the NASDAQ Biotech index, which rose 11.9 percent, roughly in line with the NASDAQ Composite index which rose 12.3 percent.

The Australian medical devices ( ex majors ) sector saw a reversal of fortunes throughout the quarter. After growing strongly in the past nine months it lost 4.6 percent in the September quarter. However PWC reported that reduced volatility, shorter commercial time frames and smaller risk profiles pointed to underlying strength in the sector.

One sector which saw its fortunes change for the better was pharmaceuticals, with PWC reporting that the Pharma/ biotechs index increased by 1.9 percent after falling a whopping 16.5 percent in Q4FY10.

“Anecdotally the biotech market is patchy but there are positive signs,” said report author and PWC partner Craig Lawn. “US venture capital market investors are reaching out abroad and Australia’s smaller venture capital sector is also seeking worthwhile opportunities.”

IPO activity was, however, non existent in Australia for the quarter with only one IPO taking place in the US.

Furthermore, secondary raisings fell sharply to $27 million from $56 million, in contrast to Nasdaq where they increased 11.9 percent.