According to investment bank EG Capital, the 121 biotech companies on the ASX have a total market capitalisation of $6.9 billion. That's equal to the market cap of just one US biotech company, Chiron (the fifth-biggest US biotech stock).
Curing pigs:
MAYBE we should have known that a company selling a cure-all for pigs and chickens might be risky. But I do feel sorry for anyone who bought the failed biotech wonder stock Chemeq in recent years — especially those who paid $8 a share back in 2004.
Because the way things are going, the last share trade at 21 cents is beginning to look a little on the high side.
The managers of Chemeq are holed up in Perth this weekend wondering how they can come up with $60 million they have been ordered to pay bond holders by the WA Supreme Court. It won't be easy — the total value of the company is $21 million.
Chemeq is not the first biotech company to lose heaps of money for shareholders and make a joke of the sector, and it won't be the last. But it's worth looking at why this company, which planned to develop and manufacture an alternative to antibiotics in farm animals, has bitten the dust. ...
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