A look at the performance of the pharmaceutical and biotech sector over the month of September as well as a look at the role of diagnostics in Covid-19. 

Sector Overview

The IIR Pharma & Biotech Index was up 2.2% in September. This compares to the ASX All Ordinaries Accumulation Index which was down 3.4%. From March-end to 30 September 2020, the index is up an impressive 64%.

The index increase was driven by the smaller end of the market with the top 10 constituents increasing just 0.8%. The best performer in the top 10 was Mayne Pharma Group Limited (ASX: MYX) which increased 16.4% in the month of September. There didn’t appear to be any significant news flow driving the share price rise. The best performer in the index for the month of September was Rhythm Biosciences Limited (ASX: RHY) which was up 118.2% and is featured in our Company News section below. One of the best performers in recent months, Dimerix Limited (ASX: DXB), came crashing down in September after the company announced there was no significant difference between the use of DXB-200 and the placebo in the Phase II study in Diabetic Kidney Disease. The share price was down 58.8% for the month.

IIR Pharma & Biotech Index*


*The IIR Pharma & Biotech Index is a market capitalisation weighted index and currently includes 143 stocks across the Pharmaceutical, Biotech, Health Care Suppliers, Health Care and Equipment, Health Care Technology and Life Sciences GICs sectors. The index excludes the five largest companies in these sectors being ANN, COH, CSL, FPH and RMD.

The Role of Diagnostics in Covid-19

Discussion surrounding a vaccine dominates the airways, however, tackling the Covid-19 pandemic will rely on diagnostics, treatments and social distancing, particularly in the absence of a vaccine. In this edition, we take a look at the role of diagnostics in the Covid-19 pandemic and the companies participating in the market.

Diagnostics are an important tool in identifying the virus and containing outbreaks and will be a vital tool to getting back to some sort of normality. Testing those that are suspected of having Covid-19 provides the ability to determine treatment requirements as well as control strategies. Diagnostics provide valuable information for monitoring the extent of the pandemic.

The market for Covid-19 diagnostics has increased rapidly and is expected to continue to be in high demand as the pandemic continues to run rampant throughout the world. Market Study Report is expecting the global Covid-19 antibody detection kit market to reach USD$5.95 billion in 2021 and Grand View Research values the Covid-19 global diagnostics market at $USD19.8 billion. The demand for diagnostics is highlighted by the below chart, which shows the seven-day rolling average of daily testing rates for the five countries conducting the highest number of daily tests.

Seven-Day Rolling Average Daily Number of Covid-19 Tests*


*Data to 14 September 2020.

Source: World Health Organisation, IIR 

Diagnostic tests for SARS-CoV-2 (Covid-19) fall into two broad categories: (1) Detecting the presence of an infection through a nucleic acid test (NAT) or rapid antigen test; and (2) Detecting the presence of antibodies that identify those that have previously been infected with the virus using Serology tests. NATs and rapid antigen tests diagnose an infection, while Serology tests determine whether a person has previously been infected with the virus.

1) Detecting an Infectious Patient

Nucleic acid tests such as Reverse Transcriptase (RT) Polymerase Chain Reaction (PCR) tests detect whether a patient is infectious and therefore should quarantine so as not to spread the virus. PCR tests are considered the gold standard of testing and are the most sensitive (ie. provide the most accurate outcome). As a result, they are the most widely used in SARS-CoV-2 testing and in some cases the only type of test used. However, PCR tests take time and require specialised personnel and equipment which has resulted in limitations to the extent of testing that can be conducted.

In an effort to expand testing capabilities, rapid antigen tests have and are being developed which are intended for use at the point-of-care and detect the presence of viral protein from SARS-CoV-2 without the need for a laboratory. Rapid antigen tests are generally intended for use with a throat or nasal swab and can provide a result within 15-30 minutes. However, rapid antigen tests are generally considered to be less sensitive than a PCR test and therefore are less reliable at detecting the virus. Rapid antigen tests are best performed within the early stages of acute infection, when viral load is at its highest levels (within the first 5-7 days of symptoms).

At present rapid antigen tests are required to be administered by a healthcare professional. However, there is a push for at-home-testing to be developed and rolled out. This would operate similar to a pregnancy test. There are no at-home tests approved as yet as there are a number of concerns not only about the accuracy of these tests but also the potential misuse of these tests. For example, an individual gets someone else to take the test for them so they can continue to go to work.

In late August, the FDA provided Emergency Use Authorisation to Abbott Diagnostics Scarborough, Inc. for is BinaxNOW Covid-19 Ag Card, for the first rapid antigen test where results can be read directly from the testing card, a similar design to some pregnancy tests. The test works by taking swabs from an individuals nose and that sample is twirled on a test card with a testing reagent added. After 15 minutes the results are read directly from the testing card. The company is pairing the test with a mobile app, NAVICA, which is designed to work like a secure digital boarding pass to be scanned to enter organisations and public places.

There are 6 rapid antigen tests approved by the TGA at present, and four by the FDA, including the recently approved BinaxNOW Covid-19 Ag Card. While not as sensitive as PCR tests, rapid antigen tests will be an important tool to provide low cost, fast, wide spread testing particularly while we wait in hope for an effective vaccine.

2) Serology Antibody Tests

Serology tests are intended to detect IgG and/or IgM antibodies to SARS-CoV-2. These tests can be laboratory based or point-of-care. Point-of-care tests detect the antibodies from venous or finger prick blood samples that are placed on a test strip and produce results in 15-30 minutes.

Antibodies can take up to two weeks or more to become detectable after infection. Antibody tests do not detect viral shedding and therefore cannot detect if an individual is infectious. Serology antibody assays generally provide historic information about viral exposure. Antibody tests will be important in testing those that have been exposed to the virus and therefore have potential immunity. How long immunity lasts is not known at this stage. Further studies will be required to reveal more data regarding this.

There are currently 102 test kits that are included in the Australian Register of Therapeutic Goods (ARTG) for legal supply in Australia. 63 of these tests are classified as laboratory tests and 42 as Point of Care tests. Three tests are classified under both categories. Given the fast moving nature of Covid-19, a number of tests were given authorisation for use on limited data. The TGA is now reviewing rapid antigen and point-of-care serology tests to ensure they are meeting testing standards. The FDA is undertaking a similar review.

We have provided a selection of ASX-listed companies that have Covid-19 test kits approved or currently in development. AT1 and GSS have approved products that are commercially available while ADO’s and GTG’s products are in development. We have not included companies that are distributing international organisations test kits such as Cellmid Limited (ASX: CDY) and TBG Biotech Group (ASX: TDL).


The companies participating in the Covid-19 diagnostics market have performed well over the 12 months to 30 September 2020. The market support reflects the significant market that has arisen from the coronavirus pandemic.

ADO has been the best performing stock in the group, up 483.6% over the 12-month period. AT1 was listed on 16 April 2020. The stock is up 87.5% from the offer price of $0.20 per share for the IPO. 


*Based on the offer price of $0.20 per share for the IPO.

Let’s take a look at the companies and their Covid-19 tests in a bit more detail.

Anteotech Ltd (ASX:ADO)

ADO is progressing the development of a rapid antigen test that can provide a diagnosis within 15 minutes. The company has completed the Proof of Concept and Design Verification phases. If clinical trials are successful, the company will be applying for regulatory approval in Australia and the US, simultaneously, followed by other regions. The company expects the development and regulatory process to take 5 to 8 months. The company achieved a significant milestone in September, achieving ISO-13485 certification

The antigen test uses ADO’s AnteoBind activated Europium particle technology and associated conjugation competency, which the company believes will provide a higher sensitivity to the Gold particle-based tests currently in the market. The company reported that initial testing produced significantly higher sensitivity than the original sensitivity target of 0.1ng/ml. Covid-19 antigen was detected at 0.02ng/ml consistently through three different batch experiments using recombinant samples.

The company will be seeking to create another test to include Flu A and Flu B in addition to Covid-19. This test will be able to differentiate between Covid-19 and the flu within 15 minutes from a single sample. Given the limitations of PCR testing, there is a significant need for high sensitive rapid antigen tests to assist with widespread community testing in the absence of vaccine.

Atomo Diagnostics Limited (ASX:AT1)

AT1 has developed a rapid antibody test to determine whether an individual has previously contracted the SARS-CoV-2 virus by determining whether the immune system has developed antibodies to fight off the virus. The results are obtained from a drop of blood and results are received in 15 minutes. The company has received regulatory approval in Australia and Europe and is seeking approval in the US, Canada, Mexico and India.

The company undertook two independent tests to determine its accuracy. For both trials, the test showed high Sensitivity (97% and 96.8%) and 100% Specificity 15 days after the onset of symptoms.

In FY20, AT1 generated sales of $3.4 million from the rapid antibody test with 1.08 million units sold through its partnership with NG Biotech in France. The company has a number of commercial agreements in place including: (1) An agreement with US based Access Bio for the product to be sold in the US, Canada and Mexico upon the relevant regulatory approvals being obtained. Under the agreement, Access Bio is obliged to sell a minimum of two million products by 30 September 2021; and (2) A non-exclusive agreement with DIVOC Labs to distribute AT1’s tests in India. AT1 will provide an initial 77,000 test kits upon receipt of regulatory approval in India.

Genetic Signatures Limited (ASX:GSS)

GSS developed the EasyScreen SARS-CoV-2 Detection Kit, a PCR test using its 3base technology. Customers can screen for SARS-CoV-2 on its own or as part of GSS’s existing EasyScreen Respiratory Pathogen Detection Kit which identifies more than 14 common respiratory pathogens. The test has been approved for distribution in Australia and Europe with the company submitting a request for Emergency Use Authorisation (EUA) from the FDA for distribution in the US.

The company has experienced significant demand for its SARS-CoV-2 test kit with the company reporting revenue of $7.0 million in 4Q’FY20, a 351% increase on the pcp. The strong 4Q’FY20 saw the company report revenue of $11.3 million in FY20, a 131% increase on the pcp. On 2 October, the company provided a 1Q’FY21 sales update. Sales for the September quarter were ~$10.5 million, 50% higher than the previous quarter. With the likely addition of US sales in FY21 we expect the upward revenue trajectory to continue throughout the financial year.

The company has ramped up production to satisfy the increasing demand and is continuing to further ramp up production using existing infrastructure. In a phone call with the CEO, John Melki, he commented that the company is very aware of the potential supply constraints of materials for the test kit. The company takes a responsible approach to onboarding new customers, only taking on new customers when the company knows the orders can be fulfilled.

Genetic Technologies Limited (ASX:GTG)

Unlike the other three companies, GTG’s diagnostic test does not test for an existing or previous SARS-CoV-2 infection. GTG develops and manufactures polygenic risk score tests, which are used to predict the risk of patients developing serious diseases. The company currently has a risk assessment test for breast cancer and colorectal cancer with tests for a number of other designations expected to be released to the market over the next 12 months, including cardiovascular and Type 2 diabetes. The company is using its platform to develop a Covid-19 risk severity test, which will seek to determine those individuals that are at high risk of developing severe symptoms and likely hospitalisation should they contract the virus.

The company envisages that this diagnostic tool could be of use in pandemic management with the potential for the test to be used to prioritise vaccine candidates in the event a vaccine is successfully created. In the absence of a vaccine, the test could be used to safely implement herd immunity and it could be a way to determine the level of risk for employees to return to work during the pandemic.

The company is in discussions with US and Australian regulators and is targeting a market release in 4Q’CY2020.

Diagnostic tests have been and will continue to be critically important in the fight against Covid-19 and the continued research and development of new testing pathways will be imperative to identify and control outbreaks, particularly in the absence of a vaccine. In determining whether an individual is infectious, PCR tests are currently the gold standard however take time and a laboratory to process the sample and deliver an outcome. The ability to process the sheer number of tests to determine the level of infectious people in the community is limited by resources and has resulted in restrictions having to be placed on testing. Rapid antigen tests have enabled for greater levels of testing across the community in some countries, such as the US and India. Rapid antigen tests are faster, cheaper and easier to administer, however they are not as sensitive as PCR testing and as such may not identify infectious people. Rapid antigen tests are typically most effective at detecting those patients who are the height of their infectivity. The question is whether this strategy is sufficient enough to reduce hospitalisations from the virus. Only time will tell.

Company News

Below we look at stocks in the IIR Pharma & Biotech Index that made notable announcements during the month that were received well by the market. These include Rhythm Biosciences Limited (ASX: RHY), Rhinomed Limited (ASX: RNO), Cyclopharm Limited (ASX: CYC), Imricor Medical Systems, Inc (ASX: IMR), and Antisense Therapeutics Limited (ASX: ANP).

Rhythm Biosciences Limited (ASX: RHY)

RHY was the best performing stock in the IIR Pharma & Biotech Index in September, up 118.2% for the month. During the month, the company raised $3.6 million through an entitlement offer and announced the addition of two new sites for the ColoSTAT clinical trial. ColoSTAT is RHY’s simple, low-cost blood test for the early detection of colorectal cancer. The company now has six trial sites. The company embarked on a 1,000 patient study of ColoSTAT in early 2019.

The company also announced that it had technical validation of the final two adjunct biomarkers, delivering five technically validated biomarkers (one lead, four adjunct) for the ColoSTAT test. With the core antibody technology technically validated, the company will focus on completing the next phase in the development program which includes refining the test kit algorithm, transferring the core technology to a high volume manufacturer, and further verification testing to finalise the first prototype test kit.

Rhinomed Limited (ASX: RNO)

RNO’s share price jumped significantly on the news that the company was developing a new low invasive, high yielding nasal swab for influenza and coronavirus. The nasal swab is designed for self-collection in the home, the workplace or a clinical setting and seeks to respond to the issues with current nasopharyngeal swabs which can be invasive and uncomfortable.

The nasal swab is considered unique as it collects samples from both nostrils and is able to collect samples from a far greater surface area than standard swabs.

The company is scoping out manufacturing and is assessing 3D printing solutions. The company will be seeking to register the device in Australia, US and Europe as a Class 1 medical device and has commenced defining the protocol for a clinical trial to be carried out in Melbourne.

RNO’s share price was up 98.8% in September.

Cyclopharm Limited (ASX: CYC)

CYC’s share price performed strongly in September driven by the company announcing that it had met its primary endpoint in the Phase III Technegas clinical trial in the US. The primary endpoint being that Technegas ventilation imaging was not inferior to Xenon-133 ventilation imaging. An independent Data Monitoring Efficacy Committee (DEMC), requested by the FDA as part of the assessment process, unanimously recommended that the clinical trial be terminated because of its success. The company seeks to commence sales in the US in 2021.

Technegas is a lung ventilation imaging agent used to diagnose pulmonary embolisms (PE). The patient inhales an ultrafine dispersion of Technegas particles. Once inhaled and deposited into the lungs, Technegas images are then captured by using conventional nuclear medicine scanning equipment. The images provide the clinician an understanding of how well the patient’s lungs are functioning.

Technegas is currently sold in 59 countries. The US provides a significant new market opportunity for Technegas as the US is the largest market for nuclear medicine ventilation procedures.

During the month, the company also announced that it had partnered with McMasters University and other industry leaders to study the short-and-long term effects of Covid-19 on lung ventilation and perfusion injury. The study is expected to assess 100 individuals, including both healthy individuals and Covid-19 recovered asthmatics. Enrolment for the study is expected in 2Q’2021.

CYC’s share price charged through its 12-month high after the announcement of approval from the DEMC, finishing the month 74.6% higher.

Imricor Medical Systems, Inc (ASX: IMR)

IMR’s share price was up 62% in September. During the month IMR signed three purchase agreements for its MRI-guided cardiac ablation products. The company signed agreements with Leipzig Health Centre, Bad Neustadt Campus and Maastricht University Medical Centre (MUMC). The MUCM marked the first sale of IMR’s products under the non-exclusive sales distribution agreement with Philips Electronics Nederland B.V. that was announced in July. According to the latest investor presentation, there are two more sites with agreements in the final stages and a further 14 sites with well-progressed discussions. The company has received CE mark approval for its key products, allowing for the company to market and sell its products throughout the European Union. The company is seeking to gain approval in Australia using the data to gain CE approval and is in discussions with the FDA regarding a clinical trial to gain approval for distribution in the US.

Antisense Therapeutics Limited (ASX: ANP)

ANP was up 61.1% in September. After announcing to the market that they had submitted Orphan Drug applications in the US and European Union for ATL1102 in August for the treatment of Duchenne Muscular Dystrophy (DMD), the company announced that the FDA had granted Rare Paediatric Disease Designation to the drug candidate for the treatment of DMD. This makes the company potentially eligible for a Priority Review Voucher which is a valuable commodity.

ATL1102 is an antisense inhibitor of CD49d, for DMD patients. According to ANP’s website, DMD affects 1 in every 3,500 to 5,000 males worldwide and occurs as a result of mutations in the dystrophin protein. Children with DMD have dystrophin deficient muscles and are susceptible to contraction induced injury to muscle that triggers the immune system and exacerbates muscle damage. Ongoing deterioration in muscle strength leads to impaired mobility. The current treatment, corticosteroids is considered to provide insufficient efficacy and is associated with significant side effects. ANP is seeking to provide a more effective treatment for DMD through ATL1002.

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