Life science investors were cautious entering 2023. Only a few funding rounds were fully subscribed and several were cancelled waiting for better times. The broad market performed better, at least until the first major crisis in the wake of the rapid interest rate hikes.

So far in 2023, stock markets have been driven by central banks’ attempts to curb inflation. In mid-March, the interest rate hikes claimed their first victims, with Silicon Valley Bank (SVB) going under. The collapse of SVB and the Credit Suisse crisis created a wave of turmoil throughout the market.

Despite a shaky financial sector, the broad market performed well in the first quarter. The S&P 500 rose by 7 per cent and the Nasdaq Composite by 17 per cent. The biotech sector was weaker, with Nasdaq Biotechnology Index and Nasdaq Junior Biotechnology Index declining 2 and 7 per cent, respectively.

Some improvement in biotech

All in all, the larger companies fared better than the smaller ones – a clear indication of the market’s risk appetite right now. Among the larger companies, we note a continued strong development for Novo Nordisk, which is having significant success with its GLP1 inhibitors. During Q1, the Danish flagship’s stock climbed by 16 per cent.

Among the smaller companies, we saw some improvement, but investors continue to be cautious. We see signs of this in the capital market, where only a few financing rounds were fully subscribed during the quarter. One example is Spotlight-listed Spermosens, whose rights issue in January was oversubscribed by 21 per cent.

However, some believe that the market is about to turn around for the biotech sector. BioStock previously reported on an analysis from Sunstone Life Science Ventures. The report reviews the conditions for a turnaround in the sector. Learn more.

The top five life science stocks

Despite the troubled market, there are many biotech companies that have had great share price development. Medtech company Phase Holographic Imaging had the strongest development  following news that the Swiss distributor and investment company Altium took a corner in the company. Learn more. PHI shares rose by as much as 250 per cent.

Expectations are high for Danish medtech Fluoguide, whose shares climbed almost 170 per cent during the first quarter. This is despite the fact that the company announced that the phase IIb results regarding FG001 in aggressive brain cancer, will be delayed until the autumn.

Another winner is drug developer Asarina Pharma, which reported positive phase IIa data with the candidate Sepranolone, for the treatment of Tourette syndrome. Sepranolone combined with standard treatment was shown to have a higher effect than standard treatment alone. Asarina shares rose by over 200 per cent in Q1, to fall back some after the end of the quarter.

Another company that presented positive data was Lund-based Cantargia. The drug candidate CAN10, which is being developed for the treatment of myocarditis and systemic sclerosis, was well tolerated in the company’s tox study. The company will initiate a phase I study with the candidate in the first half of 2023. Cantargia shares were actively traded in Q1 and traded up by about 120 per cent.

Vaccine developer Ziccum has also shown progress in the first quarter. The company updated the market on their mRNA vaccine project, which was rewarded with a share price increase of 107 per cent.

Big declines following financing rounds

In the table below, we have listed the five best performing biotech stocks during the first quarter of 2023. We have covered several of them in our weekly review BörsRonden, while some have gone under the radar. For the companies that show the largest share price declines, the common denominator is that they have conducted or announced financing rounds.

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