The performance of the biotech sector has improved in the past three months, with increased interest in pharmaceutical groups helping to boost the sector, PricewaterhouseCoopers says in a new report.
It also says that biotech companies must have clear visions for their companies, and recommends further capital raisings to shield them against the downturn.
PwC says in the three months to 31 March, all sectors of the industry have recorded “strong performances” in terms of share price gains. PwC’s index for the biotech/pharmaceutical sector jumped by 19.6% during the quarter, with its medical device sector index increasing 15%.
On an annual basis, the Life Sciences Index fell 4%, but this was better result than the All Ordinaries Index which fell by 34.6% in the quarter.
“Biotechs have weathered volatility in the market well,” PwC’s life sciences industry leader Craig Lawn says.
“The message for those in the biotech industry is that despite the strong results, nothing has changed. Focus on the positives and the signs which give you confidence. The messages are the same – stick to your strategy, get back to fundamentals and remember that cash is king in this market.”
Lawn also pointed to the fact the biotech/pharma sector raised $34 million in capital during the third quarter, saying “institutions and venture capitalists are cautiously showing interest in the market”.
“While it is reassuring to see support for Australian biotechs from overseas, further activity is expected to come from consolidation locally,” he says.
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Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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