In the Canadian Life Sciences sector, 2015 was defined by one word: Valeant.
Valeant Pharmaceutical’s problems, which would eventually spill over into U.S. and Canadian biotechs alike, arguably began in mid-September when the New York Times reported on the egregious drug pricing behaviour of a fellow specialty pharma company; privately held Turing Pharmaceuticals. Turing had increased the price in the U.S. for an orphan disease drug it had recently acquired from $13.50 a pill to $750, not only drawing the attention of the Times, but also the ire of Democratic leadership candidate Hillary Clinton. In the days following the media coverage of Turing’s pricing decision, Clinton frequently made pharmaceutical price gouging and the need for drug pricing reform a key talking point, drawing even greater attention to the issue.
Then, things got worse for Valeant and shareholders of most other pharma stocks. In October, shares of the company fell sharply after a report accusing it of impropriety was released by a short-seller called Citron Research. “Citron Research has delivered the proof that something really stinks at Valeant and it goes beyond their egregious price hikes,” concluded the report.
While Valeant’s shares tumbled to about a third of their August highs, its negative wake to not catch all Canadian life sciences stocks in 2015. We count down the top ten life sciences stocks listed on the TSX for 2015, by comparing their price as of December 31, 2014 to that of December 24, 2015. Stocks that began the year at less than ten cents were excluded, as were stocks that did not trade for the entire year.
1. Theratechnologies (TSX:TH) +406%
Price on December 31, 2014: $0.36
Price on December 24, 2015: $1.82
After spending 2010 through 2012 in freefall, Theratechnologies climbed back in a meaningful way in 2015. In March, Cantech Letter’s Hogan Mullally said he believed the company was “reinventing itself”. He expanded on a timeline of its ups and downs.
“FDA approved EGRIFTA in 2010 for the reduction of excess abdominal fat in HIV-infected patients with lipodystrophy and EMD Serono launched the drug in the U.S. in January 2011, he explained. “That really was the end of the good times for the Theratech story. For the next three years the company was embattled, dealing with regulatory rejections and withdrawals from Europe to Columbia, lackluster U.S. sales, and manufacturing issues. Finally in May 2014, Theratech made the bold move to purchase the U.S. rights for EGRIFTA back from EMD Serono for $20 million and begin writing the next chapter of its story, as a stand-alone specialty pharma company.”
2. Resverlogix (TSX:RVX) +235.2%
Price on December 31, 2014: $0.51
Price on December 24, 2015: $1.71
In April, Resverlogix and Shenzhen Hepalink announced a financing, along with a fifteen-year licensing arrangement for the company’s lead offering, RVX-208, that could deliver milestones and royalty payments of more than (U.S.) $400 million. Calgary-base Resverlogix’s name is derived from resveratrol, an antioxidant that is commonly found in plants. In 1997, researchers found that the substance may have cancer chemopreventive activity.
3. Spectral Medical (TSX:EDT) +129%
Price on December 31, 2014: $0.35
Price on December 24, 2015: $0.80
Etobicoke-based Spectral Medical is a Phase 3 company that is developing the first treatment for patients with septic shock that comprises a therapeutic device guided by a companion diagnostic. In March, shares of the company spiked after it announced the results of the Data Safety and Monitoring Board (DSMB) that recommended Spectral’s EUPHRATES trial proceed as planned.
4. CRH Medical (TSX:CRH) +114.2%
Price on December 31, 2014:
Price on December 24, 2015:
CRH Medical’s 2015 results were powered by the company’s new anesthesia division, which now account for the bulk of its revenue. The company celebrated the year in September by ringing the opening bell at the NYSE, where it recently listed. In a note accompanying its Q3 results, CEO Edward Wright said he thinks the company can continue its upward trajectory.
“With two acquisitions and an NYSE listing, we are very pleased with the operational progress we have made in the third quarter,” he said. “To generate record revenue and operating EBITDA for another quarter, reinforces the financial strength of our underlying business. We believe there is a significant opportunity for CRH to continue to grow”.
5. Trillium Therapeutics (TSX:TR) +69.2%
Price on December 31, 2014: $10.47
Price on December 24, 2015: $17.72
Toronto-based cancer treatment company Trillium’s lead program is a SIRPaFc antibodylike fusion protein that blocks the activity of CD47, a molecule that is upregulated on a wide variety of tumors. CD47 binds to SIRPa on macrophages and delivers a “do not eat” signal that inhibits the ability of macrophages to phagocytose (engulf and destroy) malignant cells. The company spent much of 2015 providing updates of the treatment at various conferences.
6. Prometic Life Sciences (TSX:PLI) +67%
Price on December 31, 2014: $1.91
Price on December 24, 2015: $3.19
Prometic, says Paradigm Capital analyst Christoper Lam, delivered “remarkable” results in 2015. Early in December, the analyst said new data from its plasma-derived plasminogen-replacement therapy phase 1 clinical trial for the treatment of congenital plasminogen deficiency that confirmed that the therapy is safe, well tolerated and does not have any serious side effects, was a “de-risking” event for the company’s stock.
7. Telesta Therapeutics (TSX:TST) +48.9%
Price on December 31, 2014: $.225
Price on December 24, 2015: $.335
In November, Telesta Therapeutics had its price target slashed at Euro Pacific after the company announced a negative result in its biologics licence application (BLA) for MCNA. The FDA voted 18 “no’s” to six “yes’s” to the question “”Does MCNA have an overall favorable benefit-risk profile for the treatment of non-muscle invasive bladder cancer at high risk of recurrence or progression in adult patients who failed prior BCG immunotherapy, e.g., in patients who are BCG-refractory or BCG-relapsing?”. While he cut his one-year price target from $1.70 to $0.30, analyst Doug Loe cautioned that there were a number of aspects of the vote he thinks were simply “baffling”.
8. TSO3 (TSX:TOS) +33.5%
Price on December 31, 2014: $1.61
Price on December 24, 2015: $2.15
In late November, TSO3 announced it had granted Getinge Infection Control AB the exclusive global rights to distribute its Sterizone VP4 sterilizer for (U.S.) $7.5-million, plus performance minimums. The agreement contains a shipment requirements that require Gentinge to reach 10 per cent of the annual global replacement market, which TSO3 estimates at $450-million annually, or 3000 units. The deal, said Laurentian Bank Securities analyst Nick Agostino, heightened the possibility that Gettinge may buy TSO3.
9. Concordia Healthcare (TSX:CXR) +22.2%
Price on December 31, 2014: $46.75
Price on December 24, 2015: $57.15
Had it not been (most unfairly, says its CEO) thrown into the middle of the whole Valeant drama, Concordia would have been much higher on this list. But Cantor Fitzgerald Canada analyst Scott Curtis says Concordia is now trading below below its peer group on an EV/EBITDA basis and a steep discount on a P/E basis.
10. Cynapsus Therapeutics (TSX:CTH) +19.3%
Price on December 31, 2014: $17.60
Price on December 24, 2015: $21.00
Cynapsus which owns apomorphine, the only FDA approved drug for Parkinson’s Disease off episodes. Off episodes refer to the common reemergence of symptoms such as slow movement and muscle stiffness in patients currently taking medicine for Parkinson’s. In June, the company enrolled its first patient in a pivotal Phase 3 efficacy study to evaluate sublingual film strip delivery of apomorphine. The company had an active 2015, raising $89.3 million (USD$72.5 million) and listing on the NASDAQ.