Now that we have entered the new year, it is time to sum up 2023 on the stock market. BioStock has listed last year’s strongest and weakest life science stocks and taken a closer look at a couple of companies that stand out. 

2023 was a generally strong year for stock markets, with the S&P500 and Nasdaq Composite indices rising more than 20 percent and 40 percent, respectively. In Life Science, however, things have been heavier, with the Nasdaq Biotechnology Index barely managing to keep its head above water, gaining just about 2 per cent. If we look at the medtech sector, we see that the Nasdaq US Mid Cap Medical Equipment Index lost just over 10 per cent.

Last year’s winner in the biotech and medtech sectors can be found on the other side of the strait: Danish Cessatech has three development projects in its portfolio, where the main candidate CT001 is a pain-relieving nasal spray for children. Last year, the candidate was tested in the phase III study 0205, where it was compared with placebo and the two substances ketamine and sufentanil. The Cessatech share got a real boost in September, when it was reported, among other things, that the last participant in the study had been recruited.

After taking a short breather, the stock got off to a flying start again at the end of December, when the study results were published. The company was able to show that CT001 was superior to placebo and ketamine, and that its efficacy was on par with sufentanil. During the year, the share price gained approximately 350 per cent, and now the market is anxiously awaiting the next step in the company’s development.

Another biotech stock that has performed well is Ziccum. The company’s technology enables new formulations of vaccines and biologics, and this past autumn, a new agreement with an American manufacturing company was announced. Looking at the full year, the Ziccum share increased approximately 245 per cent.

Pressured by a weak capital market

As is well known, risk is high for these types of drug development companies. In the development phase, there is a race against the clock and not everyone achieves the expected success. The harsh capital market environment for such companies has not made the situation any easier. Among last year’s losers, we find QuiaPEG, which lost 99.5 per cent.

The company has developed a technology that aims to extend the release of drugs, thus creating improved versions of already approved drugs. The strategy has been to secure a licensing deal at a relatively early stage, and to then take the projects through clinical studies together with a major partner. However, no such agreement has yet been reached, with steady pressure on the share price as a result. In November, it was announced that the company intends to carry out a reverse takeover of the health food company Rosemonkey.

Save what can be saved

QuiaPEG is not alone in having been forced into this type of solution to save the assets in the company. We have seen similar deals in, for example, Promore Pharma, which is carrying out a reverse takeover of PMD Device Solutions. Here, too, we had a blood-red 2023 and a stock that fell almost 90 per cent.

Another example is Emplicure. After the failure of the drug candidate Empli03, the company was acquired by a consortium to continue to operate in an unlisted environment.

However, not all companies have managed to reach this type of solution. Bioservo, for example, has been forced to close down operations and propose voluntary liquidation. This means, among other things, that the company will delist its shares from Nasdaq First North Growth Market.

Some bright spots among capital raises

As mentioned above, one of the factors that has weighed on development companies is the current situation in the capital market. It has become increasingly difficult to attract capital to support development. The subscription rate for new issues has been low, and guarantors have often received a large piece of the pie. However, by the end of 2023, we have seen some early signs that the situation may be about to turn:

At the beginning of December, AcouSort announced that they had achieved full subscription in their rights issue of just under 25 MSEK and that no guarantees were utilised. Just a few weeks later, medtech company Sensodetect announced that it had achieved a subscription rate of almost 95 per cent in its rights issue. At the same time, Annexin announced that their rights issue had been oversubscribed, and that they had reached a subscription rate of 127 per cent.

Strong finances are a prerequisite for success

It is, of course, difficult to predict how the willingness to invest will evolve going forward. What we can say is that during the winter, the capital market has shown some signs of life. The hope is that this will make life easier for the capital-hungry companies in life science, as continuous financing is absolutely crucial to achieve success in the development.

One company that has been in the news in recent months and is on this year’s list of winners is the Phase Holographic Imaging. The medtech company recently carried out a share issue of 9.9 MSEK directed at Altium, which through the transaction became the company’s largest shareholder. Phase Holographics’ share has had a strong 2023 and gained just over 190 per cent in total.

Winners of 2023

Losers of 2023

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