Small biomed companies, which were among the first and hardest to be hit by the current crisis, yesterday capped a four-day rally which saw their share prices jump, in most cases without any specific news about the company or industry.
At the top of the list is Bio-Light Israeli Life Sciences Investments Ltd. (TASE:BOLT), which jumped 389% over the four days. In Bio-Light's case, it is possible to attribute the jump to news from last Wednesday that one of its units, Zetiq, reported positive news from a cancer treatment study. Nonetheless, in the darker days of 2008, even very significant news, from this company and others, did not merit such an enthusiastic market response.
Another gainer was Biocancell Therapeutics Ltd. (TASE:BICL), whose share nearly doubled in three days, and then saw its share price jump another 29% yesterday. Although the company reported the start of a pancreatic cancer treatment trial yesterday, this was an expected development that by itself doesn't explain the price rise.
Along with those two companies, which had news to report, there were steep and extraordinary price rises in many biomed companies that did not have news releases which could at least partially explain the jump. A prime example was LifeWave Hi-Tech Medical Devices Ltd. (TASE:LIFE), with a jump of 181%.
Other gainers were NasVax Ltd. (TASE: NSVX), with a four-day gain of over 40%, BSP - Biological Signal Processing Ltd. (TASE:BSP), which rose 54%, Sialo Technology Israel Ltd. (TASE: SALO), which rose 60%, Biomedix Incubator Ltd. (TASE:BMDX), with a gain of 40%, Can-fite, which rose 39%, Hadasit Bio Holdings Ltd. (TASE:HDST), which rose 37%, MCS Medical Compression Systems (DBN) Ltd. (TASE:MDCL), which rose 34%, and Clal Biotechnology Industries Ltd. (CBI), which, although it has been stable in recent days, has risen 100% since the beginning of last week.
These are just the biggest standouts among the advancers. You could count on one hand the number of shares that did not rise. The increases come despite two days of falls on the Tel Aviv Stock Exchange (TASE) last Wednesday and Thursday.
One possible explanation is a delayed reaction among biomed stocks to last week's first two days, when the TASE rose. Another possible explanation may be that, with the new year, a strategic investor has decided to get into the sector. A third explanation is that a large institutional investor got out of biomed shares at the end of last year, and now that the selling pressure is off, the shares are rising.
Obviously, when looking at these price rises, investors must take into account the overall low valuations (several of the companies mentioned have market caps below NIS 10 million, even though the main profitable ones are bigger), and also the low turnover in several of the firms. The recent price rises were generally accompanied by average turnover in the shares.
Published by Globes [online], Israel business news - www.globes-online.com - on January 12, 2009
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