Good morning, Armchair Army,
Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.
Oil is back above US$100.
The US 10-year Treasury yield is approaching 5%.
Inflation fears are climbing.
But what do oil and US financial instruments have to do with the price of small ASX-listed healthcare stocks?
Everything.
Higher oil prices lead to…
Higher inflation expectations, which lead to…
Higher yields on the 10-year Treasury, which lead to…
Investors asking why they should take a punt on a speculative biotech when they can earn close to 5% lending money to the US Government.
But Armchair… isn’t healthcare supposed to be defensive against inflation?
You’re right.
But only partly.
Sigma Healthcare, AFT Pharmaceuticals… established commercial businesses selling products…
THEY are safe from inflation.
The microcaps?
The cash-hungry biotechs and medtechs?
Those get hit hardest when yields rise, and capital is sucked out of the speculative end of the market.
THAT is how the price of a barrel of oil moving through a narrow passage in the Middle East can affect our biotech industry on the other side of the world.
I anticipated a rough day for our healthcare speckies.
… but on open, it looks like the low volumes that you’d see on the trading days between Christmas and New Year’s.
Not the sea of red I expected.
The stock traders have taken Friday off.
… and I don’t blame them; it’s a gorgeous spring day here in Melbourne.
Get outside!
Let’s dive in…
The Pulse Check
PYC Therapeutics (ASX: PYC) has dosed its first patient in Part D of the Open-Label Extension study for Polycystic Kidney Disease. (PYC)
🪑 Milestone ticked
BCAL Diagnostics (ASX: BDX) responded to speculation in yesterday's AFR article about a three-way merger between BCAL, Genetic Signatures and Microba. (BDX)
🪑 BCAL’s answer: No three-way merger proposal. No three-way merger discussions. Nothing to see here.
🍿
Immutep (ASX: IMM) outlines its clinical development plan for its “efti” platform technology following the root cause analysis from the failed clinical trial earlier this year. (IMM)
🪑 According to the root cause analysis, there were “identifiable subtle analytical differences” between the drug manufactured at 200 L (this trial) and the drug manufactured at 2,000 L (earlier successful trials).
This is what Immutep is pointing to as the root cause of the failed trial.
A new manufacturing run has been ordered, and a new study is set to start in the second half of next year.
Trajan Group Holdings (ASX: TRJ) Mitra blood testing product was used in the Polaris Dawn space mission.
🪑 Pretty cool.
(Source: LinkedIn)
Compass Pathways (NASDAQ: CMPS) published data from its 52-week open-label study on psilocybin-assisted therapy in treatment-resistant depression. Showing a 13-point drop in depression score. (CMPS)
🪑 More good durability results from the psychedelic drug developers.
Compass is on a “rolling New Drug Application”, which means the FDA gets the data in real time rather than waiting for a big package to review at the very end = faster timelines.
Compass, the largest psychedelics company in the world, will also be presenting to the FDA next week at the psychedelics hearing.
… right next to lil’ old Emyria (ASX: EMD, held, 🪑 Armchair Pick).
I was also on AusBiz yesterday talking about the healthcare market.
What I covered:
FDA invites Emyria (ASX: EMD) to speak at landmark psychedelics hearing in Washington
What is next for EchoIQ (ASX: EIQ) after the failed 510(k) application?
Two binary biotech catalysts that I’m watching closely over the next six weeks: Actinogen (ASX: ACW) and Paradigm (ASX: PAR)
See you all next week,
The Armchair Analyst
