Cause for cheer, cause for gloom

Two dedicated market watchers have decreed that it is time for an upturn in the biotech sector, not just in the US but in Australia too. But local fund managers may not yet have the ticker to make it happen.

Stuart Roberts, industrial biotech analyst at stockbroking and investment banking operation Southern Cross Equities, said the current market here had been giving off indicators that it was time to reconsider the biotech sector as a vehicle for growth.

“I look at science and report back to the investors. At the moment few brokers are providing information on what is worth buying and what isn’t in this sector.

And I see biotech as being the number one of the more important industry areas into the next century, where IP will be the most critical asset,” he said.

Established local industry watcher Mark Pachacz of the Bioshares report also noted the industry aspect was improving – to the extent that his report made it to the prestigious Biospace website.

“The dismal times faced by Aussie biotechs may be set to end,” he said. “The (NASDAQ turnaround) has the potential to stimulate interest in Australian biotech and pharmaceutical stocks,” he added.

Listing such luminaries as Clover, Epitan, Peptech, Novogen, Psivida and Benitec, as particularly strong recent performers, Bioshares noted there were many others with strong potential in the wings.

However, despite the indicators of potential, Roberts was scathing about the performance of local fund managers when it came to offering fiscal support.

“We have found many institutional managers willfully ignorant of the biotech sector as a whole. Most see it just as an adjunct of medical stocks, not as a highly developed area in its own right. They just want to play safe and go with the proven options for the most part,” he added.

“The knowledge based economy demands investment in coming years, but many fund managers just play it according to the existing rules,” he asserted.