SYDNEY, Australia - Australian biotechnology stocks are doing well, with the overall market jumping 43.7 percent in just five months. But due to a lack of stocks involved in human genetics, the local market still lags far behind the performance of the U.S. markets.
An index of biotechnology stocks collated by the accounting firm Deloitte Touche Tohmatsu and consisting of 32 stocks, or almost all the listed Australian companies involved in biotechnology, showed the 43.7 percent increase between Oct. 1 and March 1.
However, a report on the index issued by Deloitte notes that the Nasdaq biotech index increased 151.3 percent during the same period.
Glen Sanford, a Deloitte partner specializing in the life sciences, said the sharp increase in the index indicated that biotech stocks would do well this year.
He also commented that the main difference between the Nasdaq biotech index and the Deloitte index was that Nasdaq listed a number of stocks involved in human DNA such as Celera Genomics of Rockville, Md., and Incyte Genomics Inc., of Palo Alto, Calif. All those stocks had increased many times in price over the five-month period, partly due to public excitement over the Human Genome Project.
Although stock prices have declined recently, they still are priced at many times their original issue price.
In contrast, the Australian exchange has only one stock considered to be involved in human DNA research, that of Bionomics Ltd. in Adelaide, which is identifying the genes involved in epilepsy and breast cancer. Bionomics' share price has increased fourfold since it was listed in late December.
Besides the sharp rise in the index, Sanford's report on the Australian biotech market notes that the single biggest issue facing the local biotechnology industry is that of raising additional finances.
He said different players in the industry were adopting different approaches to the problem of raising money, including mergers, share issues, joint ventures and distribution agreements.