QRXPharma (QRX)
QRXPharma has the potential to emulate the success of CSL, Cochlear and ResMed in the years ahead. This is not just my personal opinion. Just ask around inside and around the industry today. Everyone talks "quality" and "strong management". The company is effectively an old dog which has developed a few new tricks. Built upon the combination of two existing pain killers, management is now en route to convincing regulators and investors worldwide that two painkillers combined are much better than what is being used in hospitals and sold via pharmacies around the world today. And clinical trials have been backing up the claim.

Admittedly, the fact that QRX is combining two existing, already approved productsshould make life much easier in terms of achieving regulatory approval. Management displayed flexibility in developing the company and its main product line. Soon QRX's MoxDuo will be put under scrutiny by the FDA in the US in the form of a New Drug Application. All the preceding signals have been positive and those stockbrokers who cover the stock have become quite excited. Note the company's board is chaired by Peter Farrell, otherwise known as the founder of ResMed.

In share price terms, QRX shares have significantly outperformed the share market since December, with the share price more than doubling while others were struggling. While the (blue) sky remains the limit, it would appear the shares have now run into temporary headwinds after peaking above $2.40 only days ago. As such, QRX seems to have already followed in the footsteps of Cochlear with temporarily too expensively priced shares.

Anteo Diagnostics (ADO)
In very simple terms, Anteo Diagnostics has developed a chemical glue that improves pathology tests in about every manner possible. It makes them easier to assemble and more effective in their end results. Similar to Phosphagenics, Anteo's management is already looking beyond the medical sector for wider usages of its "surface coating", called Mix&Go. We all might be surprised by what type of consumer products could benefit from a little extra, microscopic glue. For company management, nothing seems too far fetched. It is publicly contemplating options such as bank notes with a tiny microchip attached (so tracing and identification becomes much easier). Science-fiction from a Brisbane lab? You bet!

In the short term, all eyes will be on further licenses for Mix&Go in the pathology sector. Anteo has already licensed Bang Laboratories in the US and Merck KGaG in Germany, but is ultra-confident others will follow in due course (exact timing remains uncertain). More such deals significantly reduce the odds of further capital raisings. Management is confident.

Meanwhile, the share price characterises all the hallmarks of a micro-cap stock, trading between $0.05 and $0.10 since early 2010. If management can deliver on the current promise, this stock will re-rate and start trading on actual revenues and profit metrics. When and whether that will happen is related to deals, deal, deals. As said, management is confident. All that needs to follow is... deals!

Alchemia (ACL)
Carbohydrate-based drugs are the new black in modern medicine, according to some market experts. If true, that would be good news for Alchemia, considered one of global leaders in the field. The company is awaiting FDA approval for its lead product, blood thinning drug fondaparinux. It goes without saying, from the moment the news of approval hits PC screens across the globe, Alchemia's share price will rally. However, investors be warned, analysts at RBS Morgans predict this will trigger profit taking by others, potentially turning the immediate post-FDA response into a tricky and volatile one.

Further in the pipeline are cancer drugs and HyACT, a technology device to deliver drugs into tumours. Post FDA-fondaparinux, the next focus will be on Phase III trials for HA-Irinotecan, a cancer drug. CEO Pete Smith is an experienced old hand in the industry with a solid reputation and quality tag attached. Alchemia shares have spent most of their time in between $0.60 and $0.80 since late 2009 (it has to be said: they also revisited $0.40 at some point in 2010). Target prices and earnings projections amongst analysts covering the stock vary a lot, similar as to all others mentioned (even including Cochlear).

Bottom line: if FDA approval follows and Indian partner Dr Reddy's Laboratories manages to successfully penetrate what is believed a large and growing market currently dominated by GlaxoSmithKline (US$274m per annum sales in the US), today's share price will prove exceptionally cheap on (let's say) FY13 earnings. That too goes for all of the above (not so much for Cochlear).

Mesoblast MSB
The list wouldn't be complete without the mentioning of adult stem cell specialist Mesoblast which recently became a member of the ASX200. Mesoblast received a big boost in market credibility when US company Cephalon decided to buy a 19.9% equity stake in addition to signing off on a deal that can potentially lead it to paying some $1.7bn to its Australian partner in the coming years. Cephalon is about to be swallowed up by Teva Pharmaceutical, but management at Mesoblast appears confident the end outcome will be an even better one for Mesoblast and its shareholders.

Mesoblast's stem cells will initially be used to reduce the occurrence of heart failures post heart attacks. Further down the track lie bone marrow transplant applications. Alas, despite the ASX200 membership and a market capitalisation of more than $1.6bn, the shares are still awaiting coverage from any of the leading stockbrokerages in the market. This too is evidence the re-invigorated life sciences sector still has a long way to catch up.

Biotech and the Unintended Consequences of Moore’s Law
By Pat Cox, Editor - Breakthrough Technology Alert

Transistor density doubles roughly every two years, as Moore's law attests. Information technology therefore advances exponentially. You don't even have to know what a transistor is to feel the impact of this extraordinary phenomenon. Mobile computing is an example. From new phone features and tablets to the bandwidth that connects them to the cloud, the innovation is dizzying.

Elsewhere, however, even greater advances are being enabled by exponential improvements in processor power. I'm referring to biotechnology but not just high-tech medical gadgets, though they do exist.

Echo Therapeutics is a great example, with a device on track for approval that will replace hypodermic needles in many medical applications. Smaller than an electric toothbrush, the transdermal skin permeation device utilizes integrated circuits and sensors to painlessly remove the top dead layer of skin using microdermabrasion. With direct access to the epidermis, drugs can be infused with absolutely no discomfort. Analytes such as glucose, lactic acid or drug levels can be measured and transmitted to anybody with a cell phone or mobile device.

Echo Therapeutics' first customers will be hospital staff who will use the technology to quickly anesthetize needle sites in preparation for transfusion or blood extraction. Cosmetic surgeons, however, want this technology to quickly prepare patients for dermal filler and Botox procedures.

Combined with a dollar-sized sensing wafer that attaches to the skin, the technology can be used to provide continual needle-free glucose and other analyte monitoring. Real-time readings can be sent wirelessly to a medical display or phones belonging to doctors, nurses, parents or the users themselves. While this continual needle-free technology will make outpatients' lives more pleasant and healthier, the biggest impact is likely to be on both the cost and quality of hospital care.

Continual glucose monitoring would cut hospital costs by freeing several hours of the average nurse's day from tedious manual blood sugar testing. More importantly, studies indicate that close observation and control of glucose levels in hospitals improves every indicator, from costs, length of stay and mortality, by about a third. Given the serious need to manage health care expenditures, this cost-saving manifestation of Moore's law will have a dramatic beneficial impact on health care.

Moore's law is yielding far greater benefits in regenerative or stem cell medicine, the only technology capable of directly addressing age-related degenerative disease. Breathtaking advances are taking place daily in stem cell science thanks to advances in bioinformatics, the application of statistics and mathematics to cellular biology via information processing. ...

Typically, the public hears about new biotechnologies only when they achieve regulatory approval and come to market. Winning approval for a drug or device, however, is an enormously expensive and drawn out process.

As a result, most biotech products coming to market today are five to ten years old. Some are much older. If personal computing had to jump the same kind of preclinical and clinical hurdles as biotech companies, we would still be using computers the size of suitcases with cathode ray tube monitors. The latest phones would do little more than provide intermittent voice communication.

Information about new biotechnologies is further limited by researchers themselves. Those working on emerging technologies may not want to attract competitors by trumpeting accomplishments.

Even when private sector and academic researchers want to get word out about a new technology, they often cannot find journalists capable of understanding and telling their stories. Financial distress in the publishing business has exacerbated this problem. The bottom line is that widely-held opinions about biotech are often very wrong ....

http://agorafinancial.com/reports/VPI/l ... e=LVPIM600

* Biota (BTA, Buy, Price Target $1.79) is expected to release the results of a Phase II trial for Human Rhinovirus (HRV) in patients with
chronic asthma within one month. Although the HRV program only makes up 10 per cent of our valuation, we believe the market is not putting any value on this program, and if results are positive we would expect to see the share price closer to 90c. The Phase IIa results achieved in June 2009 provide us with reasons to be optimistic about this more targeted Phase II trial.

* Analysts are re-jigging their sales estimates for Johnson & Johnson's prostate cancer pill Zytiga, on the promise that it could target a much larger set of patients. Yesterday, J&J (JNJ) said it unblinded a study of the drug in patients who'd never had chemotherapy, on indications that Zytiga slowed the cancer's growth and might improve survival. If Zytiga can win a new indication in that patient group, that would more than double its target market, analysts say. And with pre-chemo patients using the drug for a longer time frame, the gain in sales could be even larger. (Source: FierceBiotech)

* The FDA has officially denied AstraZeneca's petition to hold off generic versions of its antipsychotic drug Seroquel. The agency turned down AZ's (AZN) request that it withhold final approval of any knockoff version that didn't bear the same safety warnings as the branded drug. Seroquel is expected to face generic competition after the company's pediatric exclusivity expires later this month.

Credit AstraZeneca for trying: Seroquel is a multi-billion-dollar drug, and watching those sales erode will be painful for the drugmaker. Indeed, the FDA's decision only underscores how needy AstraZeneca soon will be. The company has announced another big round of cost cuts, but cutting can't continue forever.

Analysts are expecting the company to go on an acquisition spree, to make up for the fact that its internal pipeline has offered up several
disappointments lately. Bernstein's Tim Anderson listed a few prospects, as the Philadelphia Inquirer reports: Amylin Pharmaceuticals (AMLN), which recently won approval for its long-lasting version of the diabetes drug Byetta, a deal that could run $4.5 billion. Shire, the growing UK drugmaker, a much bigger deal at $30 billion. Or Abbott Laboratories's (ABT) soon-to-be-split-off drug business at $52 billion. But he figures that sub-$10 billion deals are most likely. (Source: FiercePharma)

* Bayer Healthcare is on a roll in Asia. The German company toted up a 9.4 per cent increase in Asia Pacific sales last year, for a regional total of 3.6 billion euros, or $4.8 billion. And it has even bigger ambitions: The company said it expects Asia sales to grow to 11 billion euros by 2015, with six billion of that coming from the China region.

"We are confident about our growth prospects in the region based on the dynamic development of the economy and the innovative potential of the pipeline," regional chief Alok Kanti told Reuters. One of the best new performers is the clot-fighter Xarelto, which grew 109 per cent in the region last year in the hip-and-knee surgery market. With anticipated approvals for stroke prevention, Xarelto growth there is expected to accelerate. (Source: FiercePharma)

Near-term milestones to watch
*****************************
* Acrux (ACR) - 1QCY12 - Patent extension for under-arm application.
* Biota (BTA) - 2QCY12 - HRV Phase 2b results.
* Impedimed (IPD) - 1QCY12 - Securing 20m covered lives with US insurance companies (under review with explanation of benefits being a
better measure).
* Phylogica (PYC) - 1HCY12 - Sign two deals with large pharma.
* QRX Pharma (QRX) - June 25 - Drug approval date set by FDA.
* Sunshine Heart (SHC) - 2QCY12 - EU approval for C-Pulse.
* Tissue Therapies (TIS) - 2QCY12 - EU approval for VitroGro.

Source: RBS Morgans, Company Data