Biotech surges & pot-stocks reach new highs

By Zoe Gross. Published at Oct 22, 2018, in Features

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Last week was a powerhouse one for biotech and pot-stocks — spaces that of course often converge.

As Meagan Evans explored earlier in the week, these kinds of high-impact performances have sparked a salient question — is biotech finally back?

One such stock is Biotron (ASX:BIT) — an $128 million-capped company that’s developing a new class of antiviral therapies.

After lifting as much as 1600% since late September, to hit a high of 33 cents after announcing significant immunological outcomes in an HIV-1 clinical trial for its lead drug, BIT225, Biotron pulled back some, ending the week at 25.5 cents.

BIT225 is in Phase 2 development for the treatment of HIV-1 and Hepatitis C virus infections. Importantly, BIT225 inhibits HIV-1 replication in macrophage reservoir cells offering the potential, when used in combination with other anti-retroviral compounds, to eradicate HIV-1.

The company also has a robust pre-clinical pipeline, including an impressive portfolio of compounds with activity against a broad range of viral diseases.

Another biotech stock that’s soaring is biopharma drug discovery and development company, Antisense Therapeutics (ASX:ANP), which ended last week at 1.8 cents, and then went on to a high of 6.2 cents this Wednesday, as it attracted attention for its current clinical trial at the Royal Children’s Hospital (RCH) in Melbourne. ANP ended the week at 5.5 cents for a 205% gain. Not a bad run indeed.

ANP has two drug candidates — ATL1102 and ATL1103 — which it has been studying in clinical trials for use in three diseases: Duchenne Muscular Dystrophy (DMD), Multiple Sclerosis (MS) (ATL1102) and acromegaly (ATL1103).

It is currently conducting a Phase II clinical trial with its flagship drug to treat DMD at the RCH. Interestingly, this treatment is the same drug previously used by ANP in successful Phase II trials in MS patients.

Meanwhile, Canada’s landmark legalisation of recreational weed has pushed pot-stocks on multiple stock exchanges (including the ASX) to centre stage.

Canada has become the second country in the world to fully legalise the drug — the first was Uruguay — ending almost a century of prohibition.

Legal cannabis sales in Canada could reach $6.5 billion by 2020, according to a recent report by CIBC analysts — more than the $5.1 billion that Canadians spent on spirits in 2017, and coming close to the $7 billion spent on wine.

ASX pot-stocks like eSense-Lab (ASX:ESE), MGC Pharma (ASX:MXC), and RotoGro International (RGI) are on overall upward trajectories. Of those three, only RGI has direct exposure to the buzzing Canadian market. These and others were discussed in my article, A definitive guide to ASX pot stocks.

Other Australian weed stocks with leverage to Canada include MMJ Phytotech (ASX:MMJ), ASX newcomer Althea (ASX:AGH), AusCann (ASX:AC8), and Creso Pharma (ASX:CPH).

Notably CPH is the only Australian cannabis stock that owns a facility in Canada — and one with the capacity to be able to supply to this newly opened market.

Earlier this month, CPH’s Canadian subsidiary, Mernova Medicinal Inc, had its application for a cultivation licence approved by Health Canada — one of only a few to be issued to local companies in Nova Scotia.

Mernova’s purpose-built, GMP-compliant indoor growing facility in Windsor, Nova Scotia, is designed to produce three to four tonnes per year of its premium Ritual Green brand of dry cannabis.

Given that demand is expected to immediately outstrip supply within the Canadian weed landscape, CPH’s timing is clearly strategic.

You can read more about ASX pot-stocks with Canadian exposure in Zoe Gross’s 420 Report last week, which can be found here.

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