This week’s tech report is dominated by merger and acquisition activity with Vocus Communications indicating it has acquired a 10 per cent stake in Amcom, while Telstra’s recent subsidiary Ooyala has acquired London-based Videoplaza to expand into the video advertising market.
The rise of tech is pervading every industry, but the pharmaceutical and healthcare sectors have seen major impacts from innovation with new devices and formulations being the seed of an exciting new Australian industry.
This week we’ve seen shares in Pharmaxis surge on news it has enrolled its first US FDA phase 3 trial patient to test Bronchitol in adults. CSL indicated that it will acquire the global influenza vaccine business from Novartis for $US275 million; and Acrux has reported net sales of Axiron of $US36.3 million in the third quarter by its US licensee Eli Lilly.
Commentary
Finance News Network spoke with AMP Capital Investor’s Head of Investment Strategy and Chief Economist Dr Shane Oliver about the benefits and the pitfalls of adding the biotech sector to your portfolio.
Biotech is getting increasing attention from both the government and investors: What is your outlook for the biotech sector?
"The biotech sector as a whole is in a strong growing part of the economy. More spending on health, people living longer and wanting to take advantage of technologies out there. So this is a strong growing part of the economy and overall the sector will do pretty well."
"You’ve got to be careful though, It’s one of those sectors that goes from one extreme to the other, it gets pushed too high recently, in fact earlier this year the comments from Federal Reserve Chair Janet Yellen in the US saying, “well maybe the biotech sector has got a bit too hot”. So that’s one reason to be careful."
"The other one is you really need to kick the tyres. If you buy the wrong company that just happens to have the wrong technology, then, with a bit of bad luck the market goes this way instead of that way, then you do poorly. But if you get the right company in the biotech sector, you can do really fantastically well."
Pharmaceutical technology
Shares in Pharmaxis Limited
(ASX:PXS) have surged on news it has enrolled its first phase 3 trial patient to test Bronchitol in adults with cystic fibrosis. The specialist pharmaceutical company says the phase 3 trial is operating in accordance with US FDA requirements in a bid to gain approval for use in the US.
CSL Limited
(ASX:CSL) will acquire the global influenza vaccine business from Novartis for $US275 million. The business will combine with CSL subsidiary bioCSL.
Acrux Limited
(ASX:ACR) has reported net sales of Axiron of $US36.3 million in the third quarter by its US licensee Eli Lilly. The drug delivery company says sales by Lilly, of its key product Axiron, were sitting at $US122.9 million in the 9 months to the end of the third quarter.
ResMed Inc
(ASX:RMD) says it has had a successful start to the new financial year and reported a 6 per cent rise in first quarter revenue. The manufacturer of medical equipment generated quarterly revenue of $US380 million.
M&A action
Vocus Communications Limited
(ASX:VOC) says it has acquired a 10 per cent stake in Amcom revealing plans to merge the two businesses. Vocus has approached the Amcom board of directors with an all scrip offer for Amcom shareholders. Vocus CEO James Spenceley says the two businesses are, “highly complementary and the potential combination offers and enhanced growth platform, while creating a truly national player to capitalise on the evolving opportunities in the telecommunications sector.”
The takeover of Wotif.com Holdings Limited
(ASX:WTF) by global travel giant Expedia has been delayed as it waits for clearance from the New Zealand Commerce Commission.
Information technology services company Empired Limited
(ASX:EPD) has inked a deal to buy Intergen Limited for $17.4 million, describing the deal as a transformational acquisition. Intergen in one of New Zealand's leading IT services companies with annualised revenue of $60 million, almost equal to Empired’s annual revenue of $67 million.
Telstra Corporation Limited
(ASX:TLS) most recent subsidiary Ooyala has acquired London-based Videoplaza to expand into the video advertising market. Australia’s biggest telco describes Videoplaza as a leader in video advertising technology and monetization who deliver ads to viewers across all devices.
Social media entertainment company Migme Limited
(ASX:MIG) has acquired Singaporean mobile app company LoveByte. The company says the purchase price will be 757,939 migme shares which were trading yesterday at $0.33 each.
Focussed on growth
Shares in Mint Wireless Limited
(ASX:MNW) soared up to 20 per cent in morning trade after the mobile payment and transactions processing company provided an update. The company has announced eftpos certification, a strategic review to explore growth opportunities and the departure of its chief.
1-Page Limited
(ASX:1PG) has entered a strategic equity and sales partnership, exactly one week after listing on the ASX in a reverse takeover. The Silicon Valley-based human resources start-up has struck the deal with its existing client, a major IT services company called UST Global.
