Biotech is a hugely interesting and potentially lucrative hunting ground for investors on the ASX but it comes with big caveats – the news flow in biotech stocks can giveth and taketh away, in nerve-racking falls and heart-pumping rises. The sector can potentially turn world-class research and biochemical discoveries into big dollars, and should be on the radar of any investor, in the speculative, high-risk area of the portfolio, where a small proportion of funds are put aside for an informed (hopefully!) punt that could pay off big-time. Here are 4 candidates – that all come with the standard warnings.
1. Biotron (BIT, 7 cents)
Market capitalisation: $42 million
One-year total return: 288.9%
In September-October last year, Sydney-based infectious diseases specialist Biotron showed just how speculative the biotech industry can be, when its shares rocketed from 2 cents to as high as 45 cents – a 2,150% surge – in just three weeks. The trigger was Biotron announcing that its flagship drug candidate, BIT225, was “having a unique effect in patients, over and above viral suppression seen with current anti-retroviral drugs” in patients suffering from HIV, in phase 2 trials.