Bioforum Edition 45

BioForum Edition 45 Quarter 1 FY14 October 2013

Medical devices – Impeccable timing?

www.pwc.com.au/bioforum

Highlights

Highlights

2

Key developments• The new Coalition Government announced its ministry, naming

the Honourable Ian Macfarlane MP as Minister for Industry.

• The Government says it is open to the idea of a ‘patent box’ tax incentive, which comprises lower company tax rates on income attributable to patented IP to encourage commercialisation activities in Australia.

• A national survey by Auspoll found that the scientific literacy of Australian adults has fallen over the past three years. The survey asked respondents a series of questions on basic scientific facts.

• Flinders University Associate Professor Michael Sorich expressed concern about the trend towards personalised medicine, particularly in cancer treatment. He said this was putting pressure of the Australian Government to subsidise more treatments.

Q4FY13 key statistics

7.0% Life Sciences Index (up 2.4% Q4FY13)

15.4% Life Sciences Index ex Majors (up 0.4% Q4FY13)

20.7% Nasdaq Biotech(up 8.6% Q4FY13)

9.3% ASX All Ordinaries(down 4.1% Q4FY13)

10.8% Nasdaq Composite(up 5.1% Q4FY13)

PwC | BioForum: October 2013

The broader sector performed strongly in the September quarter, with the PwC Life Sciences index up 7 per cent and the Ex-majors index up 15.4 per cent. Despite this, there were some lacklustre results from some mid-sized Pharmaceutical firms due to disappointing clinical trials and regulatory hurdles, headed by QRx Pharma (-26 per cent), Phosphagenics (-35 per cent) and Prima Biomed (-43 per cent). These falls serve as a reminder to investors to beware of clinical and regulatory risks and that investing in this sector is a long run game.

This quarter saw AusBiotech increase their discussions about a ‘patent box’ tax incentive. Under this scheme, to incentivise firms to keep their commercialisation activities within Australia, income attributable to patented IP will be subject to lower tax rates.

Commercialisation and R&D are critically important and we welcome these discussions for ongoing tax reform. However, to be successful, R&D needs to be supported by some degree of manufacturing. More incentives to grow and sustain Australian manufacturing would benefit the entire industry, allowing for greater ingenuity in both the design and prototype phase of commercialisation.

Introduction

pwc.com.au/privateclients

Manoj Santiago PwC Private Clients

3

In the first quarter...

The Ex- major Medical Devices sector has emerged as the stand-out performer in this edition of Bioforum, suggesting renewed investor confidence in this previously volatile sector. And perhaps the timing for this sector could not be better. With the new government focused on advancing Australian exports beyond the resources sector, will the Medical Devices sector (Med Device) emerge as a key industry to drive economic growth?

Over the past year, the Med Device sector recorded a substantial 67 per cent growth, up 14.1 per cent for the quarter. Leading this charge was Isonea, which has returned a staggering 1129 per cent during the year off the back of the Australian launch of AirSonea, its smartphone based wheeze monitoring device.

So, what’s driving this success? One school of thought is that it is a market correction driven by a greater sense of optimism in the prospects of Australian Med Device firms; however, we think there’s more to it.

PwC’s 2011 Medical Technology Innovation Scorecard outlined the five pillars of innovation that make a successful Med Device industry. These included powerful financial incentives, leading resources for innovation, a supportive regulatory system, demanding and price-insensitive patients, and a supportive investment community. We believe these foundations are increasingly strong in the Australian economy and the Med Device industry is ripe to grow and prosper.

In another optimistic sign for the Life Sciences sector, this quarter saw the first Australian IPO since Q4FY12. Regeneus, a regenerative medicine company, raised $10.5m for a total valuation of $46m. The Med Device sector backed up its impressive market performance with total secondary raisings of $78m, the highest result since Q2Fy10, led by large raisings from Isonea and GI Dynamics.

Introduction

4

PwC’s 2011 Medical Technology Innovation Scorecard outlined the five pillars of innovation that make a successful Med Device industry. These included powerful financial incentives, leading resources for innovation, a supportive regulatory system, demanding and price-insensitive patients, and a supportive investment community. We believe these foundations are increasingly strong in the Australian economy and the Med Device industry is ripe to grow and prosper.


06 Quarterly key findings

08 Market performance

18 Announcements

24 Appendix

28 Methodology

30 Contacts

Contents5

Contents

6

01Quarterly key findings


Quarterly key findings

7

Quarterly key findings

Market performance Q1FY14 Page

Life sciences industry total MCap A$51,304m 11

Life sciences industry growth 7.0%

Pharma/biotech sector total MCap A$38,507m 12

Pharma/biotech sector growth 7.7%

Medical device sector total MCap A$12,797m 12

Medical device sector growth 5.0%

Individual company performance

Top individual performer Isonea Limited 16

Change in market cap over the past four quarters 1129%

Bottom individual performer Pharmaxis Limited 17

Change in market cap over the past four quarters -89%

Financing

Australian IPO count 1 13

Total raised A$46m

US IPO count 11 13

Total raised A$757m

Australian secondary financing count 32 15

Total raised A$113m

US secondary financing count 67 15

Total raised A$2,337m

Announcements Q1FY14 Page

Australia

Partnerships 14 19

Mergers & acquisitions 6 20

Clinical trials 12 21

Regulatory 18 22

Other 9 23

8

02Market performance


-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

ASX All Ordinaries (Index) NASDAQ Composite (Index) NASDAQ Biotech (Index) Life Sciences (market cap A$m)

Life Sciences ex majors (market cap A$m)

% Change (Mar-Jun) % Change (Jun-Sep)

-4.1%

5.1%

8.6%

2.4%0.4%

9.3%10.8%

20.7%

7.0%

15.4%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

ASX All Ordinaries NASDAQ Composite NASDAQ Biotech Life Sciences Life Sciences ex majors

30-Sep-11 31-Dec-11 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13 30-Sep-13

Figure 1: Weekly performance over the quarter of the Australian life sciences compared to major indices

ASX All Ordinaries Life Sciences Life Sciences ex majorsNASDAQ BiotechNASDAQ Composite

0%

5%

10%

15%

20%

25%

30-Jun 05-Jul 12-Jul 19-Jul 26-Jul 02-Aug 09-Aug 16-Aug 23-Aug 30-Aug 06-Sep 13-Sep 20-Sep 30-Sep

Graph 1: Quarterly movements of the Australian life sciences sector compared to major indices

Market perform

ance9

Performance overview

Figure 2: Two-year comparison of the Australian life sciences sector by market capitalisation compared to major indices

Table 1: Quarterly movements of the Australian life sciences sector compared to major indices

Value

31-Mar-13 30-Jun-13 30-Sep-13% Change (Mar-Jun)

% Change (Jun-Sep)

ASX All Ordinaries (Index) 4,980 4,775 5,218 -4.1% 9.3%

NASDAQ Composite (Index) 3,239 3,403 3,771 5.1% 10.8%

NASDAQ Biotech (Index) 1,669 1,813 2,189 8.6% 20.7%

Life Sciences (market cap A$m) 46,804 47,932 51,304 2.4% 7.0%

Life Sciences ex majors (market cap A$m) 7,207 7,232 8,345 0.4% 15.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

ASX All Ordinaries (Index) NASDAQ Composite (Index) NASDAQ Biotech (Index) Life Sciences (market cap A$m) (market cap A$m)

Life Sciences ex majors

% Change (Jun12-Jun13) % Change (Sep12-Sep13)

15.5% 16.0%

34.1%37.6%

9.0%

18.4%21.0%

47.3%

29.3%

16.6%

10

Lif e Sciences Lif e Sciences ex majors Pharma/Biotech Pharma/Biotech ex CSL Med Device Med Device ex COH, RMD

-10%

-5%

0%

5%

10%

15%

20%

30-Jun-13 07-Jul-13 14-Jul-13 21-Jul-13 28-Jul-13 04-Aug-13 11-Aug-13 18-Aug-13 25-Aug-13 01-Sep-13 08-Sep-13 15-Sep-13 22-Sep-13 29-Sep-13

Figure 3: Quarterly performance of the Australian life sciences sector and subsectors

Graph 2: Yearly performance of the Australian life sciences sector by market capitalisation compared to major indices

Market perform

ance

Table 2: Yearly performance of the Australian life sciences sector by market capitalisation compared to major indices

% Change (Jun12-Jun13) % Change (Sep12-Sep13)

30-Jun-12 30-Jun-13 % Change 30-Sep-12 30-Sep-13 % Change

ASX All Ordinaries (Index) 4,135 4,775 15.5% 4,406 5,218 18.4%

NASDAQ Composite (Index) 2,935 3,403 16.0% 3,116 3,771 21.0%

NASDAQ Biotech (Index) 1,352 1,813 34.1% 1,486 2,189 47.3%

Life Sciences (market cap A$m) 34,842 47,932 37.6% 39,692 51,304 29.3%

Life Sciences ex majors (market cap A$m) 6,638 7,232 9.0% 7,154 8,345 16.6%

Table 3: Quarterly summary of the Australian life sciences indices’ performance

MCap (A$m)

% of total value

Companies with share price gains

Proportion of subsector

up

Companies with share

price losses


down

Companies with share

price flat


flat

Total number of companies

Pharma/Biotech 38,507 75% 34 67% 14 27% 3 6% 51

Pharma/Biotech ex CSL 6,579 79% 33 66% 14 28% 3 6% 50

Med Device 12,797 25% 25 74% 7 21% 2 6% 34

Med Device ex COH, RMD

1,766 21% 24 75% 6 19% 2 6% 32

Life Sciences 51,304 100% 59 69% 21 25% 5 6% 85

Life Sciences ex majors 8,345 100% 57 70% 20 24% 5 6% 82


Market perform

ance11

Life Sciences Life Sciences ex majors Pharma/Biotech Pharma/Biotech ex CSL Med Device Med Device ex COH, RMD

-30%

0%

30%

60%

90%

180%

150%

120%

30-Sep-11 30-Dec-11 30-Mar-12 30-Jun-12 30-Sep-12 30-Dec-12 30-Mar-13 30-Jun-13 30-Sep-13

Figure 4: Two-year comparison of the Australian life sciences indices’ performance by market capitalisation

Graph 3: Quarterly performance of the Australian life sciences sector and subsectors by market capitalisation

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

% Change (Mar-Jun) % Change (Jun-Sep)

Pharma/Biotech Pharma/Biotech ex CSL Med Device Med Device exCOH,RMD

Life Sciences Life Sciences ex majors

0.4%

8.9%

46.6%

2.4%0.4%

7.7%

15.7%

-7.6%

5.0%

14.1%

7.0%

15.4%

Table 4: Quarterly performance of the Australian life sciences sectors by market capitalisation $A$m

Market capitalisation (A$m)

31-Mar-13 30-Jun-13 30-Sep-13% Change (Mar-Jun)

% Change (Jun-Sep)

Pharma/Biotech 35,611 35,741 38,507 0.4% 7.7%

Pharma/Biotech ex CSL 6,152 5,685 6,579 -7.6% 15.7%

Med Device 11,193 12,191 12,797 8.9% 5.0%

Med Device ex COH, RMD 1,055 1,547 1,766 46.6% 14.1%

Life Sciences 46,804 47,932 51,304 2.4% 7.0%

Life Sciences ex majors 7,207 7,232 8,345 0.4% 15.4%

12

0

10

20

30

40

50

Capi

tal R

aise

d (A

$m)*

Medical Devices Biotech

46

Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14


0

500

1,000

1,500

2,000

2,500

3,000

Cap

ital

Rai

sed

(A$m

)


95229

4

2,361

55

1,544

757

57

Figure 5: Quarterly comparison of IPOs in Australia

Figure 6: Quarterly comparison of IPOs in the US

Market perform

ance

Quarterly financing

IPO financing

Note: * Amount shown is total market cap addition to the LS Index from IPOs on first day of trading

Note: * Amount shown is total amount raised

Table 5: Number of quarterly Australian IPO listings

Biotech Med Devices ASX

Q1FY14 1 - 8

Q4FY13 - - 11

Q3FY13 - - 12

Q2FY13 - - 17

Q1FY13 - - 9

Table 7: Total of quarterly US IPO listings

Biotech Med Devices

Q1FY14 11 -

Q4FY13 9 1

Q3FY13 6 2

Q2FY13 3 1

Q1FY13 1 1

Table 6: Listing of quarterly Australian IPO listings

Company Listing date

Capital raised

(A$)Valuation on listing Sector

Regeneus Ltd

9/19/2013 10.5m 46m Biotech

Total -

Table 8: Listing of quarterly US IPO listing

Company Listing date

Capital raised

(A$m) Sector

Agios Pharmaceuticals Inc 23/07/2013 116 Biotech

Heat Biologics Inc 23/07/2013 27 Biotech

Cellular Dynamics Intl Inc 24/07/2013 50 Biotech

Conatus Pharmaceuticals Inc 24/07/2013 72 Biotech

Onconova Therapeutics Inc 24/07/2013 85 Biotech

Tonix Pharm Hldg Corp 09/08/2013 13 Biotech

Sophiris Bio Inc 16/08/2013 72 Biotech

Regado Biosciences Inc 22/08/2013 48 Biotech

Five Prime Therapeutics Inc 18/09/2013 67 Biotech

Evoke Pharma Inc 24/09/2013 27 Biotech

Ophthotech Corp 24/09/2013 180 Biotech

Total 757


Market perform

ance13


0

100

200

300

400

500

600

Capi

tal R

aise

d (A

$m)

FY10 FY12 FY13 FY14FY11

7

145

360

352

46


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

FY10 FY11 FY12 FY13 FY14

Capi

tal R

aise

d (A

$m)

1,662

251

368

458586

107

4,181

211

757

Figure 7: Annual comparisons of IPOs in Australia

Figure 8: Annual comparison of IPOs in the US Table 10: Number of IPO listings in the US

Biotech Med Devices

FY14 11 -

FY13 19 5

FY12 12 4

FY11 6 8

FY10 7 2

Yearly financing

Table 9: Number of IPO listings in Australia

Biotech Med Devices ASX

FY14 1 - 8

FY13 - - 49

FY12 - 2 75

FY11 1 1 127

FY10 1 - 53

Quarterly financing

Secondary finance market

14


0

50

100

150

200

250

Capi

tal R

aise

d (A

$m)

28

5111

25

201

6

68

3

35

78



15,541

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Capi

tal R

aise

d (A

$m)

1,055

721

15,541

349

1,323

473

2,016

3224,084

2,524


Figure 9: Quarterly comparison of secondary financing in Australia

Figure 10: Quarterly comparison of secondary financing in the US

Table 11: Number of secondary deals (AU)

Biotech

Avg. amount

raised ($m)

Med Devices

Avg. amount

raised ($m)

Q1FY14 22 1.6 10 7.8

Q4FY13 32 2.1 4 0.8

Q3FY13 25 8.0 7 0.9

Q2FY13 22 5.1 12 2.1

Q1FY13 24 1.2 8 0.6

Table 12: Number of secondary deals (US)

Biotech Med Devices

Q1FY14 48 19

Q4FY13 38 22

Q3FY13 33 24

Q2FY13 52 18

Q1FY13 29 21 M

arket performance


Yearly financing

Market perform

ance15


0

100

200

300

400

600

500


Capi

tal R

aise

d (A

$m)

246

383

294

408

35

271

95

55

39

78


0

5,000

10,000

15,000

20,000

30,000

25,000


Capi

tal R

aise

d (A

$m)

5,974

2,400

1,279

5,5785,250

781

22,003

4,067

2,016

322

Figure 11: Annual comparison of secondary financing in Australia

Figure 12: Annual comparison of secondary financing in the US

Table 13: Number of Australian secondary raisings

Biotech Med Devices

FY14 22 10

FY13 103 31

FY12 99 39

FY11 154 43

FY10 107 39

Table 14: Number of US secondary raisings

Biotech Med Devices

FY14 48 19

FY13 152 85

FY12 125 43

FY11 66 121

FY10 122 57

Market perform

ance

16

Performers over past four quarters

Top 10

01 Isonea Ltd Return: 1129% Closing price $0.75 MCap A$200.89m

Isonea completed a $13.5m capital raising in late June ahead of the September launch of its AirSonea device in Australia and the US. A poll of 100 medical professionals showed 80% recommended the iPhone-based wheeze monitoring system for asthma sufferers.

02 Oncosil Medical Ltd Return: 400% Closing price $0.13 MCap A$39.28m

Oncosil acquired Enigma Therapeutics, a UK-based cancer company, in February. Dr Neil Frazer was appointed CEO in early July and multiple capital raisings were heavily oversubscribed.

03 Allied Healthcare Group Ltd

Return: 287% Closing price $0.09 MCap A$94.96m

Coridon, in which Allied Healthcare owns a 47% stake, was approved to begin a phase I trial of its herpes simplex virus vaccine. European approval of its cardiovascular patch CardioCel appears more likely in the first quarter of FY14. The company increased revenue 15% to $7.4m and cut its operating loss to $2.4m, down from $10m in the prior year.

04 Neuren Pharmaceuticals Ltd


The US Food and Drug Administration awarded a fast track designation for Neuren’s Rett Syndrome treatment and Neuren began a phase II clinical trial in April 2013.

05 Atcor Medical Holdings Ltd


AtCor Medical’s SphygmoCor Xcel system for measuring central aortic blood pressure received an ‘excellent’ rating from the European Artery Society. Results from a randomised clinical study demonstrated the benefits of using central blood pressure measurement to manage the health of patients with high blood pressure.

06 Psivida Corp. Return: 157% Closing price $4.11 MCap A$112.53m

The date is approaching when pSivida’s Iluvien implant could be approved under the US Prescription Drug User Fee Act, triggering a $25m milestone payment. The potential approval could allow the company to file an NDA for the diabetic macula oedema treatment earlier than expected. There has been speculation about pSivida becoming a takeover target.

07 Novogen Ltd Return: 129% Closing price $0.17 MCap A$25.24m

A major oncology study showed Novogen’s CS-6 was highly active against ovarian cancer stem cells, which are considered some of the hardest cancer cellsto kill.

08 Medigard Ltd Return: 127% Closing price $0.03 MCap A$2.28m

Medigard entered into an exclusive agreement with Shanghai Sol-Millennium Medical Products, which will manufacture and distribute Medigard’s blood collection device and blood flash needle.

09 Cryosite Ltd Return: 124% Closing price $0.65 MCap A$30.32m

Cryosite’s revenue rose 9% and its profit was up 22% compared to the prior financial year. The company paid two one-cent dividends during the year.

10 Bionomics LtdReturn: 120% Closing price $0.82 MCap A$323.24m

Bionomics acquired Eclipse Therapeutics in September 2012 and raised $15.6m through a rights issue. Preliminary data from a phase I trial of its ovarian cancer drug BNC105 was positive and enrolment for a phase II trial in metastatic renal cancer was completed.

0% 400%200% 600% 800% 1000% 1200%

ISN OSL

AHZ NEU

ACG PVA

NRT MGZ CTE

BNO


Market perform

ance17

Performers over past four quarters

Bottom 10

-100% -90% -80% -70% -60% -50% -40% -30% -20% -10% 0%

IMU

AMT

IMC

BNE

AGX

SFP

ACW

PRR

BXN

PXS

10 Imugene Ltd Return: -47% Closing price: $0.01 MCap: A$3.03m

Imugene offered a share purchase plan at a 10% discount in April and posted a loss of $1.26m after tax for the half year ended December 2012. It is moving from its animal vaccine portfolio to a pharmaceutical business with an emphasis on drug delivery technologies.

09Advanced Surgical Design & Manufacture Ltd

Return: -48% Closing price: $0.07 MCap: A$2.41m

ASDM made a loss after tax of $570k, up from $170k the prior year. A rights issue during the year raised $800k. A debtors’ financing facility was secured and the company cut its total debt to $2.6m in FY13 from $1.9m in FY12.

08 Immuron Ltd Return: -66% Closing price: $0.00 MCap: A$4.14m

Immuron posted a $3.5m loss for the financial year after revenue fell $1.1m. CEO Joe Baini resigned in February. A rights issue in February raised $1.86m.

07 Bone Medical Ltd Return: -67% Closing price: $0.00 MCap: A$1.08m

Funding arrangements with La Jolla Cove investors have become strained, with La Jolla delaying payments, and the company engaged DH Flinders to source new capital. Revenue effectively fell to zero with a net loss of $1.85m leaving Bone Medical in a negative working capital position and lacking funding to continue R&D.

06 Agenix Ltd Return: -74% Closing price: $0.02 MCap: A$2.07m

Agenix was advised that no further payments from a working capital facility would be made from December 2012. This required directors, senior management and some shareholders to provide unsecured funding. Agenix secured funding with Baycrest Capital of up to $3m over three years and reported a $3.26m loss for FY13 due to significant impairment of R&D intangibles.

05 Safety Medical Products Ltd

Return: -75% Closing price: $0.002 MCap: A$.89m

FY13 losses totalled $940k, more than double the prior year, after the company purchased a gold company in May. It disposed of all non-Australia patents relating to its SecureTouch syringe.

04 Actinogen Ltd Return: -79% Closing price: $0.01 MCap: A$.62m

Actinogen posted a loss of $160k, significantly less than the FY12 result of $1.6m. It announced it would close its Nedlands laboratory in a cost-saving exercise and made two scientist positions redundant.

03 Prima Biomed Ltd Return: -80% Closing price: $0.039 MCap: A$49.15m

Prima’s share price slumped after an early stage study showed no observed difference between patients taking its ovarian cancer treatment and the control group, although the study was not sufficiently powered to detect statistical significance.

02 Bioxyne Ltd Return: -87% Closing price: $0.00 MCap: A$.98m

The company’s phase IIb COPD trial had disappointing results, revealing no statistically significant clinical benefit across the entire cohort of patients. However, benefits were observed for patients under 65 years. A proposed transaction with Vitality Devices was terminated after a due diligence process. The ASX queried Bioxyne’s cash position in August.

01 Pharmaxis LtdReturn: -89% Closing price: $0.13 MCap: A$43.20m

Pharmaxis received a negative recommendation from a US committee advising the FDA on the use of Bronchitol in cystic fibrosis patients. The FDA also added Aridol to its Import Alert list, effectively stopping imports of the product until removal.

Announcements

18

03


Announcem

ents19

Australia – partnershipsCompany Partner Application Value (A$m) Comments

Biotechnology Total 6

Benitec Biopharma Ltd (BLT)

UNSW Lung cancer N/A Benitec announced that it has executed a licensing agreement with the University of New South Wales (UNSW) related to the company’s Tribetarna program, a therapy for lung cancer.

Benitec Biopharma Ltd (BLT)

Regen BioPharma Cancer vaccines Undisclosed Benitec has licensed its ddRNAI gene silencing technology to Regen for the development of cancer vaccines.

Bionomics Ltd (BNO) Merck Chronic pain Undisclosed Bionomics signed an option and license agreement with Merck to discover and develop novel small molecule candidates for the treatment of chronic pain, including neuropathic pain.

Cellmid Ltd (CDY) Natural Garden Distribution of hair growth lotions

Undisclosed Natural Garden agreed to distribute 30,000 units of Cellmid’s FGF-5 inhibitor hair growth lotions.

Cellmid Ltd (CDY) Abcodia Midkine testing N/A Cellmid signed a collaboration agreement with Abcodia, a UK biomarker validation company, to test midkine in its collection of longitudinal serum samples using Cellmid’s MK-ELISA.

Cellmid Ltd (CDY) Fujikura Kasei Midkine diagnostic technology

$440k Fujikura will exercise its option to license Cellmid’s midkine diagnostic technology by paying the milestone fee under a previous arrangement.

Medical Devices Total 3

Nanosonics Ltd (NAN)

GE Disinfection system Undisclosed GE Healthcare announced a sales and marketing investment to accelerate the roll-out of Trophon EPR, a system for disinfecting ultrasound systems.

Tyrian Diagnostics Ltd (TDX)

Bayer Crop Science N/A N/A Tyrian and Bayer CropScience agreed to terminated their license agreement on 1 September 2014.

Unilife Corporation (UNS)

Sanofi Syringe technology Up to $15m in milestone payments and royalties

Unilife signed a long-term supply contract with Sanofi for 150m Unifill syringes a year, after a four-year ramp-up period.

Pharma Total 5

Mayne Pharma Group Ltd (MYX)

HedgePath Pharmaceuticals

Cancer Equity stake in HedgePath of 30-45%

Mayne signed a supply and license agreement with HedgePath to develop, register and commercialise Mayne’s drug Suba-Intraconazole for treatment of a variety of cancers.


ISDIN and Glenmark Fungal infections Undisclosed Mayne signed two marketing and distribution agreements for Subacap, an improved formulation of Itraconazole used to treat fungal infections, in four key European pharmaceutical markets.

Phylogica Ltd (PYC) Janssen Biotech Peptide drug conjugates

Phylogica expanded its collaboration with Janssen Biotech to discover, develop and commercialise new peptide drug conjugates derived from Phylogica’s phylomer drug discovery platform.

QRxpharma Ltd (QRX)

Aspen Pharma Moxduo pain relief $1.25m in milestones and double digit royalties

QRx and Aspen Pharma signed a deal for the immediate release of Moxduo in Australia, New Zealand and Oceania.

Starpharma Holdings Ltd (SPL)

Gowan Company Pripostar dendrimer technology

Undisclosed Starpharma and Gowan announced a new partnership using Starpharma’s Priostar dendrimer technology in crop protection formulations.

20

Announcem

ents

Mergers, acquisitions and divestmentsDominant company Other company Type of deal Value (A$m) Comments


Genetic Technologies Ltd (GTG)

Simavita Holdings Acquisition Undisclosed Genetic Technology’s subsidiary Gtech merged with Sydney-based company Simavita, which develops solutions for incontinence.


Advanced Surgical Design & Manufacture Ltd (AMT)

Orthofix Australia Divestment Undisclosed ASDM entered into a 12-month transitional distribution services agreement with Orthofix, which has acquired ASDM’s spinal business.

ITL Ltd (ITD) N/A Asset purchase $1.5m ITL acquired long-term leasehold land and a medical device facility in Malaysia.

Medical Australia Ltd (MLA)

MediVet Acquisition $11m Medical Australia announced it would acquire MediVet for $11m through a share issue. MediVet is a leading animal health company.

Suda Ltd (SUD) NovaDel Pharma Acquisition Undisclosed Suda acquired NovaDel Pharma, including its NovaMist technology.

Pharma Total 1


Libertas Pharma Acquisition Undisclosed Mayne Pharma acquired US-based Libertas Pharma, a generic pharmaceutical company.


Announcem

ents21

Clinical trialsCompany Drug Application Comments

Phase I Total 2

Biotron Ltd (BIT) BIT225 HCV and HIV The study of Biotron’s BIT225 formulation demonstrated that the capsule administered drug is better absorbed and has a relative bioavailability more than 1.6 times greater than the previous powder formulation.

Medical Developments International Ltd (MVP)

QT/QTc Penthrox Pain relief The trial of QT Penthrox met the primary endpoint and all secondary endpoints.

Phase II Total 3

Allied Healthcare Group Ltd (AHZ)

CardioCel Tissue repair Five-year data from the trial in CardioCel patients showed no signs of calcification at site of repair.

Patrys Ltd (PAB) PAT-SM6 Cancer treatment Additional data released from a phase I/Iia trial showed that PAT-SM6 is active in patients with end-stage disease who are resistant to other marketed therapies.

Viralytics Ltd (VLA) Cavatak Melanoma Viralytics achieved the primary endpoint in its phase II trial of Cavatak in late stage melanoma patients.

Phase III Total 2

Suda Ltd (SUD) ArTiMist Malaria The phase III trial of ArTiMist, Suda’s malaria treatment, showed it was superior to intravenous quinine and a rapid and effective treatment for young children.

Viralytics Ltd (VLA) Cavatak Melanoma Interim results of the phase II trial were positive, with solid progress towards meeting the primary endpoint.

Pre-clinical and other Total 5

Cogstate Ltd (CGS) Lurasidone Cognitive function test A peer-reviewed paper showed that Lurasidone, an atypical antipsychotic drug, improved cognitive function of schizophrenia patients, as measured by the Cogstate tests, significantly more than the control group.

Living Cell Technologies Ltd (LCT)

Ntcell Parkinson’s disease Pre-clinical trial data for cell therapy Ntcell in a non-human primate model of Parkinson’s disease demonstrated recovery from movement abnormalities, improvements in neurological defects, and an increase in neural connections and the number of dopamine-producing neurons in the affected area of the brain.

Neuren Pharmaceuticals Ltd (NEU)

NNZ-2591 Fragile X Syndrome Neuren announced positive results from a validated animal model using its drug molecule NNZ-2591 for Fragile X Syndrome.

Osprey Medical (OSP) Avert System Contrast-induced nephropathy

Osprey received FDA approval to undertake a clinical trial of its Avert System to study a marketing claim expansion to include “reduction of contrast-induced nephropathy ” for patients undergoing angiogram or stenting procedures.

Starpharma Holdings Ltd (SPL)

Oxaliplatin Cancer A pre-clinical study showed improved tumour-inhibiting efficacy and reduced overall toxicity using a dendrimer enhanced version of the blockbuster cancer drug, Oxaliplatin.

22

Announcem

ents

RegulatoryCompany Product Application Comments


Analytica Ltd (ALT) N/A Burette technology A Chinese patent was granted for Analytica’s core AutoStart system intellectual property.

Bioniche Life Sciences Inc (BNC)

Folltropin Animal health Regulatory authorities in seven European countries have agreed to register Bioniche’s top-selling animal health product Folltropin.

Bone Medical Ltd (BNE) Axcess II Musculoskeletal diseases Bone Medical received a notice of allowance for its Axcess II patent application in Canada.

Circadian Technologies Ltd (CIR)

VEGF-D Lymphangioleiomyomatosis (Lung disease)

The US FDA designated Circadian’s VEGF-D assay kit as a humanitarian use device for “the detection of circulating VEGF-D intended to monitor patients who have been diagnosed with lymphangioleiomyomatosis for disease progression and response to therapeutic intervention”.

Imugene Ltd (IMU) Linguet Drug delivery technology The European Patent Office said it would grant Imugene’s patent application protecting its Linguet drug delivery technology.

Imugene Ltd (IMU) Linguet Drug delivery technology The Japan Patent Office granted a key foundation patent application protecting Imugene’s Linguet drug delivery technology.


Allied Healthcare Group Ltd (AHZ)

CardioCel Cardiac defects CardioCel received a CE Mark in Europe.

Atcor Medical Holdings Ltd (ACG)

SphygmoCor Measurement of central aortic blood pressure

AtCor’s SphygmoCor Xcel system was approved for sale in Mexico.


SphygmoCor Measurement of central aortic blood pressure

AtCor’s SphygmoCor Xcel system was approved for sale in the Republic of Korea.


SphygmoCor Aortic blood pressure measurement

Atcor announced that its European patent application, “Method and apparatus for determination of central aortic pressure”, has been successful.

Isonea Ltd (ISN) AirSonea Wheeze monitoring AirSonea received a CE Mark in Europe.

Isonea Ltd (ISN) AirSonea Wheeze monitoring The Therapeautic Goods Administration approved the company’s AirSonea technology for sale in Australia.

Nanosonics Ltd (NAN) Trophon EPR Ultrasounds Trophon EPR was approved for use in South Korea following receipt of a product licence from the Korean Food and Drug Administration.

Pharma Total 5

Neuren Pharmaceuticals Ltd (NEU)

N/A Neuropeptide formulations The US Patent Office issued a notice of allowance for two Neuren patents.

Patrys Ltd (PAB) PAT-SM6 Anti-cancer Patrys’s anti-cancer drug PAT-SM6 has been granted orphan drug designation by the European Medicines Agency for multiple myeloma.

Pharmaxis Ltd (PXS) Bronchitol Cystic fibrosis Pharmaxis received approval for simplified access to Bronchitol for cystic fibrosis treatment under the Pharmaceutical Benefits Scheme.

pSivida Corp (PVA) Iluvien Eye disease The French National Health Authority approved Iluvien for the treatment of chronic diabetic macular oedema considered insufficiently responsive to available therapies. Patients will be reimbursed 100% of the cost of Iluvien under a French program for treatment of severe diseases.

QRxpharma Ltd (QRX) Moxduo Pain relief The FDA issued a complete response letter regarding the company’s new drug application for Moxduo requiring it to resubmit its application. QRx plans to complete its refiling in Q4 2013. The delay has been caused by timing issues in data included in the original submission.


Other news

Announcem

ents23

Company Product Application Comments


Bioniche Life Sciences (BNC)

N/A N/A Bioniche founder and CEO Graeme McRae will step down from his position once a replacement is found, but will remain in the role of chairman.

Imugene Ltd (IMU) Ibuprofen Pain relief Imugene discontinued development of its fast-melt ibuprofen tablets due to unsuccessful testing.


Isonea Ltd (ISN) AirSonea Wheeze monitoring device

Isonea launched its flagship product AirSonea in Australia.

Nanosonics Ltd (NAN) N/A N/A Former Cochlear executive Michael Kavanagh was appointed as the CEO of Nanosonics.

Pharma Total 5

Calzada Ltd (CZD) N/A N/A Calzada refuted allegations in major newspapers that it had been involved in a secret drug trial at the Essendon Football Club.

Pharmaxis Ltd (PXS) Bronchitol Cystic fibrosis Pharmaxis announced pricing of Bronchitol in France was delayed due to issues in agreeing a reimbursed price with authorities.

Phosphagenics Ltd (POH) N/A N/A Dr Esra Ogru stepped down as CEO after she was suspended when the board discovered irregular invoicing and accounting transactions at Phosphagenics.

Phylogica Ltd (PYC) N/A N/A Phylogica appointed Dr Richard Hopkins as CEO.

Progen Pharmaceuticals Ltd (PGL)

N/A N/A Progen appointed Heng Hsin Tang as acting managing director.

24

Appendix

04


Closing MCap (A$m) Quarterly return Annual return

Medical device

AMT Advanced Surgical Design & Manufacture Limited 2.406 -33.3% -48%

AHZ Allied Healthcare Group Limited 94.960 81.6% 287%

ADO Anteo Diagnostics Limited 46.991 1.7% 3%

ACG Atcor Medical Holdings Limited 28.077 171.4% 217%

BRC Brain Resource Company Limited (The) 33.566 22.2% 32%

CLV Clover Corporation Limited 85.894 -9.6% -3%

COH Cochlear Limited 3,500.290 -2.0% -10%

CGS Cogstate Limited 35.912 30.6% 24%

CMP Compumedics Limited 12.350 47.3% 16%

CYC Cyclopharm Limited 11.490 14.3% -2%

ELX Ellex Medical Lasers Limited 26.322 55.0% 82%

GBI Genera Biosystems Limited 9.275 9.5% -23%

GID Gi Dynamics Inc 371.422 37.8% 15%

IPD Impedimed Limited 32.621 100.0% 6%

ISN Isonea Limited 200.893 106.9% 1129%

ITD Itl Limited 25.038 7.1% 50%

LBT Lbt Innovations Limited 7.552 -22.1% 48%

MLA Medical Australia Limited 10.894 30.6% 96%

MGZ Medigard Limited 2.275 -16.7% 127%

MDG Medtech Global Limited 3.509 66.7% -22%

NAN Nanosonics Limited 222.085 35.5% 67%

OBJ Obj Limited 22.922 60.0% 14%

OSL Oncosil Medical Limited 39.284 202.3% 400%

OIL Optiscan Imaging Limited 9.434 -11.4% -31%

OSP Osprey Medical Inc 75.168 46.9% 118%

RMD Resmed Inc 7,486.246 13.0% 47%

RVA Reva Medical 187.863 7.1% -12%

SFP Safety Medical Products Limited 0.893 -50.0% -75%

SOM Somnomed Limited 52.064 28.6% 43%

SUD Suda Limited 20.058 8.0% -23%

TDX Tyrian Diagnostics Limited 1.022 0.0% 0%

UNS Unilife Corporation 321.265 0.0% 20%

UBI Universal Biosensors, Inc. 132.779 8.2% -16%

UCM Uscom Limited 12.302 5.9% 9%

Companies in the PwC Life Sciences Index

Companies in the Pw

C Life Sciences Index25


Pharma and Biotech

ACR Acrux Limited 551.187 -5.98% 3.12%

ACW Actinogen Limited 0.625 -65.00% -79.41%

AGX Agenix Limited 2.068 -17.39% -73.87%

ACL Alchemia Limited 191.360 90.63% 17.31%

ALT Analytica Limited 10.080 -10.00% -14.29%

ANP Antisense Therapeutics Limited 21.614 40.00% -26.32%

AVX Avexa Limited 13.563 7.14% -25.00%

AVH Avita Medical Limited 39.037 -7.69% -11.11%

BLT Benitec Biopharma Limited 32.745 5.71% -7.50%

BDM Biodiem Limited 4.974 6.06% -43.55%

BNC Bioniche Life Sciences Inc 37.712 -10.00% -32.50%

BNO Bionomics Limited 323.236 141.18% 119.96%

BPO Bioprospect Limited 5.746 100.00% 0.00%

BIT Biotron Limited 22.601 3.66% -5.56%

BXN Bioxyne Limited 0.978 0.00% -86.67%

BNE Bone Medical Limited 1.077 0.00% -66.67%

CZD Calzada Limited 31.674 15.71% 76.09%

CDY Cellmid Limited 18.864 12.50% 80.00%

CIR Circadian Technologies Limited 13.617 19.15% -22.22%

CUV Clinuvel Pharmaceuticals Limited 60.765 -12.15% 1.27%

CTE Cryosite Limited 30.316 51.16% 124.14%

CSL Csl Limited 31,928.804 3.93% 39.13%

GTG Genetic Technologies Limited 40.337 -16.84% -28.18%

HCT Holista Colltech Limited 9.072 16.67% 25.00%

IDT Idt Australia Limited 20.291 80.00% 60.00%

IMC Immuron Limited 4.142 0.00% -66.39%

IMU Imugene Limited 3.025 125.00% -47.06%

IVX Invion Limited 30.076 103.13% 14.04%

CBB Life Corporation Limited 12.433 40.00% 40.00%

LCT Living Cell Technologies Limited 31.416 109.76% 68.63%

MYX Mayne Pharma Group Limited 354.980 50.00% 124.11%

MVP Medical Developments International Limited 79.241 3.94% 5.60%

MSB Mesoblast Limited 1,818.421 7.55% -15.18%

NEU Neuren Pharmaceuticals Limited 125.085 39.71% 251.85%

NRT Novogen Limited 25.236 -15.38% 129.17%

NSP Nusep Limited 8.246 -4.00% -15.79%

PAB Patrys Limited 16.085 26.09% -23.68%

PXS Pharmaxis Limited 43.197 -7.14% -88.79%

POH Phosphagenics Limited 86.740 -35.38% -32.80%

PYC Phylogica Limited 9.338 5.88% -40.00%

26

Companies in the Pw

C Life Sciences Index



PBT

PBT Prana Biotechnology Limited 199.629 81.63% 97.78%

PRR Prima Biomed Limited 49.148 -42.65% -80.00%

PBP Probiotec Limited 17.467 17.86% -4.35%

PGL Progen Pharmaceuticals Limited. 13.268 6.67% 2.13%

PVA Psivida Corp. 112.526 2.75% 156.88%

QRX Qrxpharma Limited 117.276 -25.71% 14.71%

RGS Regeneus Limited 28.822 N/A N/A

SIE Scigen Limited 27.614 100.00% -11.11%

SRX Sirtex Medical Limited 770.930 13.61% 43.26%

SPL Starpharma Holdings Limited 289.644 26.38% -31.33%

TIS Tissue Therapies Limited 68.560 165.22% -22.78%

VLA Viralytics Limited 34.035 53.06% 41.51%

Notes:

ACU CompanyremovedfromindexastradinghasbeensuspendedindefinitelypendingproposedacquisitionofBiolifeScienceLtd

TEO CompanyremovedfromindexastradinghasbeensuspendedindefinitelypendingproposedacquisitionofMimeticaPtyLtd

HIN Company delisted from ASX

RGS Company added to index after IPO

CBB Company changed name from Cordlife Limited to Life Corporation Limited

27Com

panies in the PwC Life Sciences Index

28

05Methodology


SourcesBioForum draws on historical data from the following sources:• Capital IQ• Connect 4• The Australian Stock Exchange• Company websites• PwC Global Pharma and Life Science Quarterly

Newsbriefs

Market performanceThe Australian life sciences sector’s market performance is tracked through two indices:1. PwC Life Sciences Index2. PwC Life Sciences Index ex majors (CSL, ResMed

and Cochlear)

Analysis is provided without the large-capitalisation stocks (majors) so the performance of smaller-capitalisation stocks can be observed.The PwC Life Sciences Index is based on the performance of life sciences companies listed on the Australian Securities Exchange (ASX). It comprises two subsectors:1. Pharmaceutical/Biotechnology2. Medical devices

These sectors have been classified according to the Global Industry Classification Standard. The index includes life sciences companies primarily involved in research, development, commercialisation and manufacturing of pharmaceutical and biotechnology products and medical devices. It excludes healthcare, medical software and distribution companies. Companies included in the PwC Life Sciences Index are listed at the end of each issue of BioForum.The PwC Life Sciences Index is based on the combined market capitalisation of the listed companies and calculates the change of their value over the quarter and change over the previous year. Only the changes in market capitalisation of companies are reflected in the index to ensure that companies entering or leaving the index do not bias the results. Due to methodology changes it is not appropriate to compare current values of the PwC Life Sciences index with values calculated in previous Bioforum reports.

These changes are compared to the changes in the market performance of the following indices:• ASX All Ordinaries• NASDAQ Composite• NASDAQ Biotech

Different formulae are used to calculate the value of these indices and track their performance. These formulae use a combination of company market prices and a weighted average of market capitalisation. Because of these different methods of calculating value, the absolute value of the indices cannot be directly compared. Only their changes over time can be sensibly compared.The Life Sciences index is designed as a measure of the health and performance of the industry, not as a measure of returns to investors.

Top and bottom performersAnnual data on these companies is sourced from Bloomberg each quarter. Company announcements are sourced from company websites.

IPO and secondary finance marketsIPO and secondary financing data is sourced from the Connect 4 database’s health-care industry category. We include data from companies on the PwC Life Sciences Index only. Data on options, rights and bonus issues is excluded. The US IPO and secondary financing data is sourced from Thompson Reuters.

AnnouncementsThese are from companies listed on the PwC Life Sciences Index only. They are sourced from Connect 4 using the health-care industry category. We include announcements on partnerships, mergers and acquisitions and divestments, clinical results, regulatory activity and other information.Announcements on the following are excluded:• trading halts• capital raisings• proposed (versus actual) mergers, acquisitions and

partnerships• progress reports on clinical trials (results only

are included)• market registration approval

Methodology

29M

ethodology

30

06Contacts


31

Tax and Legal

Craig Lawn P: +612 8266 0147 E: [email protected]

Sandra Mason P: +612 8266 0470 E: [email protected]

Stephanie Fabian P: +612 4925 1278 E: [email protected]

National Pharmaceuticals Leader

John Cannings P: +612 8266 6410 E: [email protected]

PwC Australia Life Sciences and Innovation Practice contacts

Australian Industry Leaders – Life Sciences

PwC Australia Life Sciences

Craig Lawn P: +612 8266 0147 E: [email protected]

Michelle Chiang P: +612 8266 7575 E: [email protected]

Manoj Santiago P: +612 8266 4494 E: [email protected]

Assurance

Manoj Santiago P: +612 8266 4494 E: [email protected]

Michelle Chiang P: +612 8266 7575 E: [email protected]

32

Written and edited by:PwC (pwc.com.au), a global professional services organisation serving the life sciences sector and other industries with the help of editor and proofreader Karen Hunt.

Research, analysis and writing:Max Oke, Consultant

PwC Life Sciences Practice contributors:Craig Lawn, Partner, National Life Sciences Industry Leader

Manoj Santiago, Partner, Sydney Life Sciences Industry Leader

Michelle Chiang, Partner, Sydney Life Sciences Industry Leader

Acknowledgements

Acknow

ledgements

This document is provided by PwC as general guidance only and does not constitute the provision of accounting, legal advice, tax services, investment advice, or professional consulting of any kind. The information is provided ‘as is’ with no assurance or guarantee of completeness, accuracy or timeliness of the information and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will PwC or its professionals be liable in any way to you or to anyone else for any decision made or action taken in reliance on the information or for any direct, indirect, consequential, special or other damages related to you or your use of information, even if advised of the possibility of such damages. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all the pertinent facts relevant to your particular situation.

© 2013 PricewaterhouseCoopers. All rights reserved. In this document, ‘PwC’ refers to PricewaterhouseCoopers a partnership formed in Australia, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

PricewaterhouseCoopers201 Sussex StreetSydney NSW 2000+61 2 8266 0000

WL127010304

www.pwc.com.au/bioforum

Bioforum Edition 45

Documents

Transcript of Bioforum Edition 45