Bioshares analysis: 60 of 101 biotech firms lifted market cap in 3 years, as Oventus reaches distribution deal

BIOTECH can be risky, but new study shows almost 60 per cent of life-science companies have grown in stockmarket size over three years.

Dr Chris Hart Clinical Director Oventus. Oventus are making a mouthguard-like device for sleep apnoea. Photo: Claudia Baxter

• Oventus tries to wake from crowded sector
• Impedimed shares revive on new data

BIOTECHNOLOGY can be risky, but a new study shows that almost 60 per cent of life-science companies have grown in stockmarket size over the past three years.

At least 25 out of 101 surveyed companies had doubled their market capitalisation, the study by sector analysts Bioshares found. Fifteen of the 101 companies listed since June 2015 had at least tripled.

It came as Brisbane-based sleep apnoea-treatment company Oventus, created by dentist Chris Hart, revealed a worldwide distribution deal that it hoped would pick up sales.

Some of the increases in the Bioshares study were off a small base — Brisbane-based Factor Therapeutics, for instance, had lifted from a $10 million market capitalisation in 2015 to $49 million capitalisation in mid-June this year. Its share price has risen from 3.1c in 2015 to 6c on Tuesday, but that’s far away from the 84c it hit in 2004.

Bioshares also found a return in stockmarket floats and the use of old company shells for biotechnology outfits. Thirty-five companies came to the stockmarket via those avenues since 2015, compared only five floats in the preceding three years.

Oventus was one company which floated last year at 50c. Its share price initially jumped to $1, but has since tumbled to 38c.

The company was raising additional funds on Tuesday after announcing a distribution deal with Hong Kong-based Modern Dental. Oventus, which uses a mouthguard-like device along with breathing tubes to counteract troubled sleeping, said the deal would help commercialise their product.

Oventus chief executive Neil Anderson told The Courier-Mail that Modern Dental had a “global footprint” and would help them push into markets such as the US.

It would take Oventus a long time to “form these relationships that (Modern Dental) already have”, he said. “It would be really slow going, and it would cost a lot of money.”

While Modern Dental does offer other sleep-related products, Mr Anderson argued Oventus’s device was at a premium end and different because of its airway technology.

Details on the contract were confidential. Mr Anderson said a typical fee to a distributor would be 25 per cent to 40 per cent of the sale.

Oventus are shooting to sell roughly 1500-2000 devices a month within two years from now. Currently, in their main market of Australia, they sell 50 devices monthly. “Sales had probably been a bit softer” than anticipated but Oventus hoped this distribution deal would lift results, Mr Anderson said.

The company’s last quarterly filing shows it had $5 million in cash as at March’s end, and anticipated an outflow of $2 million in the current quarter.