The biotech sector in Australia is known for its volatility and high stakes in clinical trials. Meanwhile, the performance of stocks is driven by company-specific developments, such as trial data as opposed to broad economic factors. This means that the sector is generally regarded as non-cyclical and equally provides benefits that are associated with diversification.
The ASX is home to several groundbreaking biotech companies that are pioneering innovative therapies such as Telix Pharmaceuticals Ltd (ASX: TLX) develops radiopharmaceutical diagnostic agents and therapeutic products that are reshaping oncological care. However, in this article, we present five biotech companies that have good potential to outperform over the long run due to their distinct and innovative approach. Here are five stocks likely to outperform in the next quarter;
Market cap: $1.06 billion AUD - CMP: $0.94 AUD
Mesoblast Limited is an Australian regenerative medicine company. It seeks to provide treatments for inflammatory ailments, cardiovascular disease, and back pain. The company is Led by Silviu Itescu, who founded the company in 2004, the company has a current market capitalization of 1.06 billion ZAUD, Mesoblast is using its proprietary mesenchymal lineage cell technology platform to develop and commercialize innovative allogeneic cellular medicines to treat complex inflammatory diseases resistant to conventional standard of care.Â
Its share price has risen by 219.4% on a year-to-date basis. It is doing well and likely will continue to do well in the future.
Market Cap: 20.38 million AUD - CMP: $0.0065 AUD
OncoSil Medical (ASX: OSL) is a global medical device company focused on Interventional Oncology. Their device, the OncoSil device, is a single-use brachytherapy device used to deliver a pre-determined dose of beta radiation directly into cancerous tissue and is used in combination with chemotherapy. The OncoSil device has been approved for sale in 30+ countries and is expanding across the world through commercial agreements - like in Saudi Arabia.
If you are looking for a highly undervalued biotech stock with a good risk-reward trade-off, OncoSil Medical (ASX: OSL) should be at the top of your list.
Market Cap: 6.05B AUD - CMP: $18.35 AUD
Telix is a biopharmaceutical company at the commercial stage that is focused on the development and commercialisation of therapeutic and diagnostic (‘theranostic’) radiopharmaceuticals. The Aussie-based company has an extensive pipeline for urologic oncology (prostate and kidney), neuro-oncology (glioma), musculoskeletal oncology (sarcoma), and bone marrow conditioning that is driven by strong global supply, manufacturing, and distribution. On a year-to-date basis, the share price has risen by 79.5% to trade at A$ 18.
The company is equally approved by the Australian Therapeutic Goods Administration (TGA), the U.S. Food and Drug Administration (FDA), and Health Canada for its prostate cancer imaging agent, with over 18 clinical trials underway worldwide.
Market Capitalization: AUD $533.86 million - CMP: $0.32 AUD
Emerging biotech firms that are beginning to make their mark include Botanix Pharmaceuticals Ltd (ASX: BOT), which develops dermatological products and drug treatments. The company is preparing for the upcoming commercial launch of a topical treatment for underarm sweating.
Federal Drug Administration (FDA) approval for the treatment is expected by late June 2024 and the stock has already rallied by 125% from one year ago and is currently trading at A$0.32.
Market Capitalization: $123.42 million AUD - CMP: $0.060 AUD
Actinogen Medical Limited (ASX: ACW) is a biotechnology company developing innovative treatments for Alzheimer's disease and cognitive decline as well as metabolic diseases, like Type 2 diabetes. Actinogen’s lead compound, Xanamem, has been specifically designed to reduce the production of intracellular cortisol - the stress hormone - through the inhibition of the 11β-HSD1 enzyme in the brain.
Actinogen Medical recently announced the Peer-Reviewed Publication of its Phase 2a Biomarker and the share price has risen a splendid amount of over 200% year to date. The trial involved 167 patients with major depressive disorder (MDD) and cognitive impairment and it is a unique trial because of its focus on the ability of Xanamem to improve cognitive function in patients with MDD, by reducing levels of the 'stress hormone', cortisol, in the brain, while leaving normal cortisol stress response intact in the body.
Should you invest in biotech stocks?
Biotechnology stocks, regardless of selection criteria, are subject to significant price volatility, experiencing considerable gains and losses over short periods.
While these stocks may offer substantial potential for growth, they can also provide significant returns if the underlying companies succeed. Before purchasing any of these stocks, conduct thorough research to ensure they align with your financial goals and risk tolerance.
