In the Canadian Life Sciences sector, 2015 was defined by one word: Valeant.
Valeant Pharmaceutical’s (Valeant Pharmaceuticals Stock Quote, Chart, News: TSX: VRX) 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. In fact some did very, very well.
A word on the voting process: the model for the Cantech Letter Awards has always been the same: we call on the analysts who cover Canadian tech to vote. This year, we had more than two dozen of them vote, from firms of various sizes. For the life sciences sector, each analyst submitted three choices. They are then asked rank the consensus choices. He is the list they have right now, listed in alphabetical order.
We give you the three nominees for Cantech Letter’s 2015 Life Sciences Stock of the Year.
ProMetic Life Sciences (ProMetic Life Sciences Stock Quote, Chart, News: TSX:PLI)
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.
Theratechnologies (Theratechnologies Stock Quote, Chart, News: TSX:TH)
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.”
TSO3 (TSO3 Stock Quote, Chart, News: TSX:TOS)
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.