Good morning,
Welcome to today’s edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.
More conflict in the Middle East over the weekend.
Key oil shipping route, the Strait of Hormuz, is shut.
Oil could go to US$100 a barrel if it stays like this, leading to rising inflation.
While this isn’t a geopolitics newsletter, these global macro trends are important to pay attention to for evaluating healthcare stocks in the market.
Generally, the biotech/medtech sector thrives in a risk-on environment (particularly for pre-revenue drug and device developers), and global conflict uncertainty is bad for the business.
(Especially if you’re trying to raise capital).
During times of conflict, risk appetite can drop, capital tightens, funding becomes more expensive, and inflation can rise (particularly if oil prices rise).
Nothing changes about your stocks… but if market sentiment changes, and forward values of future cash flows compress, then the outlook for risk-on assets looks different.
Stocks I’m expecting to rise: defence/military, oil, precious metals, defensive (cash-flowing) businesses.
Stocks I’m expecting to take a hit: risk-on assets like speckie biotechs.
But as we’ve seen with a few of these global macro shifts (most notably tariff fears last year)...
… as quickly as it comes, it goes.
Such is the whim of the market.
Risk On. Risk Off. Risk On. Risk Off.
Let’s dive in…
The Pulse Check
Avecho Biotechnology (ASX: AVE) completes recruitment of ~210 patients for the interim analysis of the pivotal Phase III trial of its CBD TPM® insomnia capsule; results expected in June 2026. (AVE)
🪑 This is a huge milestone for Avecho. There was a very big exclusion criterion for participants in this clinical trial, so “recruitment” was always the biggest limiting factor.
Now the attention turns to the interim results scheduled in June. The ASX is littered with cannabis stocks failing trials for insomnia, but Avecho has taken the time to get its trial just right.
SDI Limited (ASX: SDI) has entered into a Scheme Implementation Deed with Beijing Guoci Kebo Technology to be acquired for A$1.40 per share, valuing SDI at A$166.4M, a 65% premium. (SDI)
🪑 Late deal announced Friday night. I’m not so familiar with the stock, but well done to shareholders.
Beamtree Holdings (ASX: BMT) initiates a six-month operations review, appointing existing Chair Emma Gray to oversee a strategic review (paid $30,000/month in company equity). (BMT)
🪑 This one is a strange one. Not sure why there is a $30,000 per month payment to the chairman for business review… shouldn’t the chairman constantly be reviewing the business and strategy as part of the job?
If you’re a Beamtree shareholder… let me know what you think.
On Friday, the US Health and Human Services secretary went on the Jo Rogan podcast. What I found most interesting was his take on psychedelic medicine in the US (discussed at 1:36:00).
🪑 Important takeaways:
The government is currently working on a legislative framework to make psychedelics available for people with PTSD.
Veterans and police officers (first responders) are in most need of psychedelic therapies
Bipartisan support for psychedelics in the US.
This interview follows Phase 2a data from AtaiBeckley (NASDAQ | ATIA) that showed psychedelic efficacy in social anxiety disorder, but durability, effect size and dosing frequency need to be clarified. (Biocentury)
Australia is the most advanced in the psychedelic therapy space, downscheduling psychedelic substances so that they can be taken under the supervision of an Authorised Prescriber.
Companies like Emyria (ASX: EMD), which is developing psychedelic clinical services right here in Australia has a big head start on companies in the US who will likely look to EMD for therapy protocols and a business model blueprint.
Emergent BioSolutions (NSY: EBS) secures ~$140M CAD government contracts for medical countermeasures in Canada. (PR Newswire)
🪑 This contract highlights the potential for biodefence contracts for a company like Island Pharmaseuticals (ASX: ILA).
ILA just moved into a trading halt for “pending agreement with two strategic US-based defence institutions”.
Zelira Therapeutics (ASX: ZLD) has been suspended from quotation due to failing to lodge its half-year report by the due date. (ZLD)
🪑 Naughty, naughty.
Cash Injection
Generate Biomedicines caps off a strong month for biotech IPOs in the US, raising US$400M for its AI drug discovery platform. (Biopharma Dive)
🪑 US IPO market is strong. So is the appetite for AI drug discovery.
M&A, Big Pharma Wants a Wife
Boehringer Ingelheim inks US$500m deal with Sitryx Therapeutics for an early-stage immunometabolic program with several oral small-molecule inhibitors and an undisclosed novel mechanism of action. (Pharmaceutical Technology)
See you all next week,
The Armchair Analyst
