Armchair on stage at Bio Connections

Good morning, Armchair Army,

Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.

I’ve just landed in Sydney and am gearing up for the Jane Morgan 20-year celebration event.

Following yesterday’s Bio Connections in Melbourne.

Key themes discussed?

Capital. 

Regulations - particularly the CGT tax changes and RDTI changes.

Australia's place on the global stage… particularly with the emergence of China biotech.

There were some great insights…

I particularly liked one from Amir Zalcenstien from the SYNthbioventures fund who talked about the perverse incentives created by the CGT Changes.

VC-backed startups and companies now need to think of a “get out of Australia” contingency.

Structuring companies by stacking convertible notes to keep the equity portion down as much as possible so that when (or if) they DO leave Australia, at a key inflection point, it is done at the lowest equity value.

The fact that companies are thinking about a “get out of Australia” contingency is pretty sad… and a likely consequence of the CGT changes if there are no carveouts for life sciences companies.

My talk was a bit different.

“Engaging Retail Investors for the Life Sciences Industry”. 

It was the first time I’ve stood up in front of a crowd as part of the Armchair Analyst, and I was nervous as anything.

But I think it went well.

A big thank you to the Informa team, all of the speakers, Tam for hosting and everyone involved in making the event happen.

Today I’m doing something a bit different.

I’ve posted my entire speech as part of today’s “Under the Microscope”.

(Careful, it’s long)

Enjoy!

Let’s dive in…

InteliCare Holdings (ASX: ICR) expands its agreement with Hardi Aged Care, 84 more beds (up from 580). (ICR) 

🪑Classic “land and expand” deal.

Clinuvel Pharmaceuticals (ASX: CUV) clarifies timelines for key catalysts. Topline results for Phase 3 vitiligo trial scheduled for December 2026, and its pivotal vitiligo trial (300 patients) scheduled to start November 2026. (CUV)

🪑I like this update. 

Clear catalyst timelines announced off the back of a recent NASDAQ listing.

Let’s see if this gets the US investors excited.

SomnoMed (ASX: SOM) CEO Amrita Blickstead will step down. (SOM)

Quite a few 4C reports coming out today; I won’t go through all of them but just highlight a couple that caught my eye.

Talius Group (ASX: TAL) reports Q2 revenue of $1.8M. But it’s two big deals (worth $2M) that were secured post-quarter. Cash position stable at $4.5M. (TAL) 

🪑 Business as usual quarter for TAL.

ImpediMed (ASX: IPD) reports a marginal quarter of growth, with ~$5M in operating cash outflows and raising a chunky $15 million in the quarter. (IPD)

🪑 Basically trading at cash backing.

Speaking to some of the people involved in the raise, this one was positioned as “the last raise before cash flow breakeven”.

The markets are not pricing it like that right now, and the company will need stronger growth to get there.

SomnoMed (ASX: SOM) reports preliminary FY26 revenue of $114-$115M and EBITDA within the guided $10-$12M range. (SOM)

Botanix Pharmaceuticals (ASX: BOT) reports a 25% increase in Q4 FY26 Sofdra prescriptions (QoQ) and $10.1M in revenue. (BOT)

🪑… still burning cash, though. Another $10 million in operating cash outflows. Still got $36M in the bank with a $15M debt facility.

Just like Impedimed, will need to start showing some levels of profitability for the market to re-rate.

This is a copy of the speech that I gave at Bio Connections. 

(Careful, it’s long)

First, I would like to thank all of the speakers today, the Informa team and Tom for hosting the Bio Connections event.

It’s important that we as an industry have these conversations, and I’ve learned a lot.

My name is Jason, but I also go by The Armchair Analyst.

I write a daily newsletter covering ASX-listed healthcare stocks, with the goal of making investing in healthcare stocks as approachable as possible for everyday investors.

So my expertise, if you’d call it that, is understanding the retail investor.

How they think, how they behave and how they make decisions.

Let’s first poll the audience.

Raise your hand if you've ever invested in a biotech company

[PAUSE]

Okay, now how about who here has raised for a biotech company?

[PAUSE]

Now clap if it was easy.

[SILENCE]

That sounds about right.

The thing about early-stage life sciences companies is that we are always raising capital.

Which means that getting a drug developed or a medical device sold is not just about the science… 

OR the regulatory landscape… 

OR even operating a commercial business…

You have to raise capital, which means you have to tell the story.

Over.

And over.

And over.

And over.

And over.

And over again.

My topic today: How to Activate Retail Investors for Life Sciences Companies

Spoiler… 

Tell them how they are going to make money.

Now, these are geared towards publicly listed companies.

BUT if you’re a private company or a startup, a lot of the principles still apply.

First, let's define WHAT a retail investor is.

The retail investor is fickle.

It gets FOMO.

Falls in love with a stock.

… and is generally irrational.

This brings me to my first rule of understanding the retail investor.

Rule #1: Your institutional investors underpin the company's value. The retail investors set the share price.

Now, to target retail investors, we have to understand who they are…

Now, for the second exercise of the day.

Everyone, close your eyes.

Close them tight, and just imagine what the typical retail investor looks like.

It might be a person that you know… a friend, a family member.

Hold that thought in your mind.

If you thought… 

The 22-year-old university student with a high-risk, high-reward tolerance.

You'd be right.

If you thought… 

An 80+ year-old senior who has a self-managed superfund and time in the day to read through all their favourite announcements.

You'd also be right.

If you thought… 

The 42-year-old wealth manager that is "all in" on a speckie drug development company with 10 days until results.

You'd also be right too.

The you professional that just secured his first paycheck.

The teacher. The tradie. The businessman.

The retail investor can be anyone.

But there is a shared trait amongst retail investors: a higher-than-average risk tolerance and a desire to make money.

This brings us to rule #2.

Rule #2: There is no such thing as a forced buyer. Only a forced seller.

A retail investor buying a stock has only one reason.

To make money.

A retail investor selling a stock?

Tax bill. Holiday. Divorce settlement. New car. School fees. 

… And my personal favourite: sell one stock to fund other investments.

So as a publicly listed company, there is only one way to move the share price.

Get more buyers than sellers.

More demand than supply.

More people who want to make money… than those forced sellers circling the market.

How do we make this happen?

To influence the retail investor, we need to understand how they think.

And WHY they actually chose to buy a stock.

This brings me to rule number 3.

Rule #3: Retail investors invest "Macro Theme First".

They spot a trend and want to bet on whether it will happen.

In healthcare we have…

Gut health. Brain-computer interface. Wearables. Psychedelic medicines. Peptides. GLP-1s. AI.

People invest in what they see around them, what they hear about in the news and in conversations in their personal life.

Now, as a sector, we start at a disadvantage.

If you take a look at the commodities sector, they have this beautiful thing.

It's called a commodities price chart.

An investor doesn't have to guess what's important; they have a price chart telling them every single day.

This means that depending on the price of gold, the look-through value of one piece of dirt can be higher than the next piece of dirt that is looking for nickel.

WITHOUT needing to spend a single dollar on the asset.

Its value goes up.

Which means for the healthcare sector, which is competing with the commodities sector for retail attention and capital, we need to work harder to explain why our company matters.

This brings me to rule number 4

Rule #4: Investors need to understand why your company matters before they invest.

For a person that uses your product, this is easy.

They understand your value proposition.

For a person with a friend or family member affected by the disease that you’re looking to treat.

They also understand your value proposition.

But this might only be a small fraction of the potential retail investment market.

… particularly if you’re developing a niche product with specific applications.

So it's imperative that you explain why your company matters.

Because there is no commodities price chart for heart attacks.

… or cancer.

But investors know that these are important.

Why?

Because four conditions that need absolutely zero explanation as to why they are important or how big the market is.

Cancer. Heart disease. Alzheimer's. Diabetes.

The what’s going to kill you index.

But what if you don’t fall into the what’s going to kill you index?

What if you’re developing a cure for a rare disease, or a workflow management solution for hospitals, or a specific product for specialist doctors?

How do we convince a retail investor that this product matters and will make money?

It all comes down to one thing.

External validation.

What is external validation?

Licencing deals. 

Partnerships. 

Large institutional investors (especially if they are specialist biotech funds). 

A trusted mate who made money them money on something else “backs it”. 

Their wealth advisor. 

Retail will hear a good story that they like and relate to, and follow other investors in.

This brings me to rule #5.

Rule #5: Retail investors don't know the actual value of something. They look to someone else to tell them what it is worth.

But the biggest thing that they will follow… the market.

It’s called the "Me Too" trade.

Investors will see a stock go up, and want to find the “cheaper” version of that same stock.

The “me too”.

Let me see if you have been paying attention.

In the last financial year, what was the best-performing healthcare stock?

[ASK THE AUDIENCE]

Correct, it was 4DMedical.

An AI-based lung imaging company that secured 510(k) clearance and an investment from Pro Medicus around 10 months ago.

Up more than 1,200% in a year.

I remember getting a phone call in January from an analyst at a top-tier broking firm, and we were just chatting about healthcare trends for 2026.

And I asked him… what’s the trend? What are investors going to like this year?

His big bet… AI medical imaging.

Lots of phone calls from investors lamenting how they “missed” 4D Medical, and were looking at what’s next.

Now here's the chart for EchoIQ.

As you can see, 4D Medical started running in June last year.

Atraya (another medical imaging company) ran alongside Pro Medicus.

Then, about 4 months after the Pro Medicus news… EIQ started to run as well.

On no news.

From about a $100 million market cap to over $1 billion in the space of six months, without securing a 510(k).

All off the back of being the next 4D Medical.

Now everyone’s asking… what’s the next EIQ.

Well, there was a capital raise that completely caught me off guard two weeks ago

At the time, the company had an $8 million convertible note and a ~$4M market cap.

It raised $15 million with Barrenjoey on the ticket.

Barrenjoey are a large brokerage firm, and generally won’t touch any company less than $100 million.

But here it was, down in the nanocap space, recapitalising a $4 million nanocap.

Can anyone guess who it is?

Correct, Enlitica.

Now, I don’t know exactly what Enlitica does; I know that it sells some medical imaging technology to hospitals.

But what was clear was that the company is positioning itself as the next EIQ.

Here is a graph that was flicked to me:

As you can see: AYA, EIQ, 4DX, PME… then ENL.

The “next trade”.

4D Medical made it possible for EIQ, and EIQ made it possible for Enlitica.

Which brings me to Rule #6.

Rule #6: Winners create winners.

What builds a healthy public-market industry is winners.

You need winners to roll back into earlier investments.

Otherwise the capital is locked up.

Once a winner emerges, you get liquidity.

Whether it's an M&A or an index inclusion.

This is a waterfall chart that I like.

The more winners that there are, the more water fills at the top.

These then trickle down, so that results (510(k) and clinical readouts) are rewarded.

Then there is capital available.

Finally, the speculators enter… and we get a full-blown bull market.

Taking the medical imaging space as an example.

4D Medical and Atraya had big runs.

These investors then cashed out and looked for earlier investments.

EIQ.

Now, those that made money on EIQ go looking for even earlier investments.

And that’s how you get Barren Joeys putting $15 million into a $4 million nanocap.

This has been happening in the US biotech market for about 12 months now.

The US Biotech index is up 40% in the last 12 months, almost double the NASDAQ 500:

How has this happened?

This year has been one of the biggest on record for M&A transactions.

I remember one of the first dominoes to fall was the Pfizer-Metsera takeout for $10 billion in November last year.

It was an upsized deal, outbidding Novo Nordisk for a weight loss drug.

This kicked off a cascade of transactions and licencing deals driven by two things.

FRIST, big pharma companies (Eli Lilly in particular) are printing cash from the sales of weight loss drugs like Ozempic and Wegovy.

SECOND, big pharma is heading towards one of the biggest patent cliffs ever. 

Headlined by Keytruda, the US$29 billion (per year) chemotherapy drug that is coming off patent in the next few years.

These two things have led to over US$100 billion in licencing and M&A deals in the last six months alone, which means that we are on track for one of the biggest years ever.

In the US markets, these exits have trickled down to the IPO markets.

Every week it feels like there is a new biotech IPO on the NASDAQ. 

AND, every single one of them upsized.

More IPOs in the first half of this year than twice the amount that were from last year.

This creates FOMO, and biotech stocks in the US are actually moving after IPO, which means that the speculators have entered.

Here are the M&A transactions in the second half of last year.

This next bit is anecdotal, but a lot of the bitcoin and crypto trades have moved to stocks.

… and their favourite type of stock? 

Biotechs.

Mainly because they have the binary high-risk, high-reward nature that was so popular in the crypto trades.

So that’s the US biotech market. But where is Australia?

We still sit at the top of the waterfall.

Outside of those two medical imaging sub-sectors.

Biotech is still waiting for some big winners in the space before the waterfall of capital flows.

In fact, the top of the waterfall has dried up… Two high-profile dusters in Immutep, Opthea and Cynata don't help.

But there have been some signs this year.

Telix signed a big deal with Regeneron, and PYC managed to secure a $600 million capital raise from big US investors.

But we need more.

More external validation.

More acquisitions.

More licensing agreements.

More successful clinical results.

And more companies like 4D Medical across drug development, diagnostics and medical devices.

Because winners create winners.

But it takes time for a sector-level bull market to emerge… 

And as early-stage life sciences companies, you need capital now.

… so what do you do?

Well, you tell the story over, and over, and over, and over again.

… and this brings me to Rule #7.

Rule #7: In order to get noticed, it takes someone seeing you 11 times.

And that can come from anywhere.

An ASX announcement - that's your bread and butter.

An article online.

A mate texts them a ticker.

A podcast. A conference. A tweet.

Whatever it is, if someone hears your company 11 times (particularly in a short space of time), they will notice you.

So, what’s the best way to get to those 11 notices as quickly as possible?

Get your shareholders to do the job for you.

This brings me to rule #8…

Rule #8: Turn your shareholders into advocates

The easiest way to do this is to make them money, and I guarantee that if they are asked, at 4:00 pm on a Friday, with a beer in their hand, what their favourite stock is?

They are going to tell all of their friends, it’s the one that has been making them money.

But that’s not enough…

You need to train your shareholders on the elevator pitch for the stock.

What is it?

Why does this matter?

How does this make money?

And they need to do this in 45 seconds.

For the “me too” trades, this is easy.

Let’s take EIQ for example.

What is it? 

It’s the next 4D Medical… but for heart attacks.

It is an AI trained on millions of images that makes the cardiologist's job a lot easier.

… and have you seen what they are working with? It’s a grainy black-and-white image of the heart. A miracle that they are able to detect anything at all.

Why does it matter?

It’s got deals with all of the top hospitals, including the Mayo Clinic, the #1 hospital in the US.

How does it make money?

It makes money every time someone does a scan. There are millions of echograms done each year. That’s the market EIQ is going for.

Each company needs their own version of this.

… and if you can’t explain it in 45 seconds. What hope does the retail investor have?

It’s hard to do in practice… to distil an entire company down to something that mate can tell someone else at the pub.

But it's the most important thing that you can do.

So you tell that story.

Again.

And again.

And again.

And again.

Because moving a share price is not just about the story.

It is the story married with execution.

This brings me to Rule 9

Rule #9: Moving a share price is like playing tennis.

You need a really good ball toss to hit a really good serve.

The ball toss is everything you do before the news.

The conferences that you attend. The 11 notices. The telling the story.

The serve is the news itself. The result. The "ask."

By telling the story over and over and over again, you collect what I call potential energy.

Pent-up demand, sitting there, waiting.

So that when you finally hit the serve, it hits big.

You can have the best news in the world.

But if you haven't set it up, if the expectations aren't managed, if nobody understands why it matters…

Then things fall flat.

On the other side, a great ball toss can’t paper over the cracks of a poorly hit serve.

You still need to execute.

This brings me to the last rule.

Rule #10…

Rule #10: Share price movements on news are a function of expectations and reality.

Just because you publish good news doesn’t guarantee that the price goes up.

It’s all about whether you meet OR beat those expectations.

So make sure to keep a few things in your back pocket to surprise the market to the upside.

No company’s journey is ever linear.

Which is why it's so important that even though you've just hit this wonderful serve…

you go right back to the baseline and get ready for the next one.

But this is the rhythm of newsflow.

Ball toss. Serve. Ball toss. Sever.

Set the expectations. Then beat them.

Set the expectations. Then beat them.

… and it is a rhythm.

Because once you’ve hit that serve, made that announcement or closed that deal.

The market will have their finger on the sell button unless you’re back at the baseline setting up for the next one.

And you do that again… and again… and again… and again…

So here are the 10 rules that you can use to activate your retail investors

So… how do we activate the Retail Investors?

Who knows, I’m just the armchair analyst…

Thank you.

See you all tomorrow,

The Armchair Analyst