For known reasons, it has been a rough first half of the year for the stock market. Several of the world’s leading indices lost more than twenty per cent and the Stockholm All Share Index followed suit. The harsh interest rate climate and the declining risk appetite had not least an effect on the life science sector, where the smaller companies were particularly affected. Despite the falling trend, some companies broke the pattern – see the list of the five best performing life science stocks here.
The US index S&P 500 fell 21 per cent while the Nasdaq Composite fell nearly 30 per cent. In Stockholm, the stock exchange’s All Share index fell by 28 per cent, while the large-cap index OMXS30 fell 23 per cent and First North by 32 per cent.
For the life science sector, the picture was not notably brighter – although the world’s major pharmaceutical companies included in the MSCI Global Healthcare Index fell only 11 per cent.
The Nasdaq Biotechnology Index lost 30 per cent and here in Stockholm, the First North Healthcare Index fell by a whopping 43 per cent in the first half of the year.
Of the circa 215 companies in the sector, only 15 showed positive development. Among the stocks that rose, we find two of the larger companies, AstraZeneca rose by 26 per cent and Sobi by 19 per cent. The OMXS30 constituent Getinge, which posted a profit warning in June, joined the losers’ list with its 40 per cent decline.
Issues squeeze stock prices
Many of the shares that have declined during the year, are those that have carried out or announced new issues – the dilution and the possible subscription discount often put pressure on the share until the capital raise is completed. This is particularly evident in the current market climate where risk appetite is low and where many of the issues have been filled by subscription commitments and guarantee commitments.
The share with the biggest loss in the sector during the first half of the year was biotech company RhoVac which fell 97 per cent. The reason was that the efficacy results in the company’s phase II study with onilcamotide in prostate cancer did not reach the primary endpoint.
Big ups on the winners list
Although most stocks in life science are down, the stocks on the winners’ list exhibit significant price movements.
In May, medical device company Bonesupport received approval from the FDA for its bone graft substitute Cerament G to treat bone infection. At mid-year, the market capitalisation amounted to SEK 4.6 billion after the share rose by 57 per cent until the end of June.
The market value of Gothenburg-based Vicore Pharma amounted to approximately SEK 1.9 billion at the end of June. The company showed positive phase II data in February with its candidate C21 in idiopathic pulmonary fibrosis. The stock has since performed well and was at the top in the first quarter with a rise of 63 per cent. Learn more. At mid-year, we can conclude that the trend for the share is continuing and that the Vicore share has risen by 94 per cent during H1 2022.
Oncopeptides rose by 176 per cent
The best performing life science stock on the Swedish lists during the year’s first half was Stockholm-based Oncopeptides. In midsummer, the EU Committee for Medicinal Products for Human Use, CHMP, issued a recommendation to the Medical Products Agency (EMA) to approve Oncopeptide’s Pepaxti for the treatment of relapsed refractory multiple myeloma. The stock rose 176 per cent in the first half of 2022.
What the next six months will bring remains to be seen, but the market is likely to continue to be affected by the new interest rate environment and high inflation. An important factor for the risk appetite will also be the development of the war in Ukraine, as well as how much the outcome of economic growth deviates from forecasts.
Top 5 life science stocks – first half of 2022