The ‘everything bubble' is back. But this time it's different
Had a new doughnut variety been released? Was there a Willy Wonka-style promotion going on? Had Nvidia made a takeover offer? Nope, this was the return of one of the worst Wall Street traditions: meme stock mania.
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News.com.au
10 hours ago
- News.com.au
Precision Points: When it comes to biotechs' messaging, a lingering KISS goes a long way
In Precision Points, Precision Funds Management executive directors Dermot Woods and Andy Clayton draw on insights from two decades on the front lines of equity markets to share their expertise with Stockhead readers. Today, Dermot Woods outlines the Perth based fund's approach to investing in the biotech space, which has parallels with its more familiar ground of the resources sector. As with its more familiar bailiwick of resources, the Precision Funds Management deploys the KISS acronym when investing in the biotech sector. Keep It Simple Stupid. 'The information has to be presented simply enough so that we semi understand it,' Precision executive director Dermot Woods says. 'It helps if can pronounce the name of a disease, or it has an action we can remember.' Woods deploys plenty of rock-kicking analogies to describe the entity's nascent interest in the biotech sector. For a start, the risk and reward parameters are strikingly similar. As with each new 'Olympic Dam-style' copper play, the chances are that the latest in-vogue drug program won't be the next Neuren Pharmaceuticals (ASX:NEU). (Neuren and its partner Acadia famously commercialised the Rett syndrome drug Daybue and the achievement is a rare exemplar of ultimate achievement). But who says investors can't have fun along the way? Have a crack Along the convoluted drug development path, it's a case of getting that risk-reward equation down pat. 'Investing in West African gold stocks is risky, but everyone knows they are risky, so the risk is priced in,' Woods says. In contrast, the biotech sector is still emerging from its post-pandemic nuclear winter that descended in late 2022. Despite notable capital raisings such as Clarity Pharmaceuticals' (ASX:CU6) $200 million whip-'round, local biotechs still are starved of capital. The upside? There's plenty of 'mispriced risk' and now is the time to 'have a crack'. More than a punt As with an iron ore explorer that chanced on lithium, Precision tentatively embraced biotech for the wrong reason. 'Like most fund managers, we had a 'zero biotech' rule for about 20 years,' he says. 'We then thought the aggregation of big data would mean that drug discoveries became quicker. 'It hasn't happened yet – but it will.' (Big data aggregation refers to collecting, combining, and summarising large labs of data into more manageable and useful formats). In the mining sector, Precision likes to see a certified resource, 'rather than punting on a piece of ground'. Precision's life sciences ethos is similar: avoid the whimsical preclinical and phase I stuff in favour of the mid-to-late pointy end. If that means writing a bigger cheque, then so be it. To date, Precision has weighed in on four ASX drug developers. The biggest, Dimerix (ASX:DXB), accounts for 4% of the fund's circa $100 million of assets. Stroke drug developer Argenica Therapeutics (ASX:AGN) comprises around 1%. Dimerix goes from 'really cheap to cheap' Precision's centrepiece biotech exposure is Dimerix, which is in phase III with its drug candidate for the kidney disease focal segmental glomerulosclerosis. The fund initially took part in the company's $20 million placement in March 2024 at 30 cents a share, after its successful interim readout. After that, Dimerix inked four global partnership deals that raked in $65 million, with up to $1.4 billion in potential milestones. Woods says Dimerix's funding position substantially derisks the company. Dimerix won't need money until the 'moment of truth': the outcome of the phase III study. Woods admits the fund could have got in cheaper, with Dimerix stock trading at a paltry six cents two years ago. He says it's a case of a stock going from 'really cheap' to cheap – with significantly less risk. Argenica was a stroke of luck The Perth-based Argenica is testing its stroke drug candidate in a local phase II trial. Having enrolled 92 patients across eight hospitals, investors should expect a data readout in early September. Ultimately, Argenica eyes a phase III trial, but the US Food & Drug Administration has asked for more safety data before it can approve the study. Given the company needs to wait for its phase II trial anyway, time is on its side. Woods says the fund weighed into Argenica three years ago, at about 40% below current levels. He says the fund was drawn to Argenica partly because of CEO Dr Liz Dallimore's 'clear vision' on the company's strategy. 'If this trial , we can buy a decent return for a very decent price," Woods says. Not PYC-ing out on a punt Despite being mining focused, Perth-based drug maker PYC Therapeutics (ASX:PYC) once was Precision's biggest holding, before the fund flipped the stock at a profit. By combining existing ribonucleic acid (RNA) drug design with its proprietary delivery platform, PYC is developing precision therapies for patients with genetic diseases that have no treatment options. PYC's lead program covers the rare eye disease retinitis pigmentosa. It is also targeting autosomal dominant optic atrophy, Phelan-McDermid syndrome and autosomal dominant polycystic kidney disease. The company's once-muddled story is gaining traction, with the stock more than doubling over the last years and pushing its market valuation over $700 million. 'They have done a really good job,' Woods says. 'But for us it's probably a bit too early stage.' Precision also took a profitable punt on a fourth non-WA drug developer, which Woods declines to name. KISS and take up Woods' overriding message to biotech management is to go for the big KISS – and enjoy the investor passion. He says KISS is especially relevant when presenting to fund managers who might look at thousands of stocks. Beyond the dense Powerpoints, Precision seeks an unequivocal answer to a precise question. It's not number 42 and the meaning of the universe, but 'are they asking for more money?'
Sydney Morning Herald
2 days ago
- Sydney Morning Herald
Helicopter parent? Yep. Hypocrite? For sure. Why more and more of us are tracking our kids
I slipped into the Apple Store furtively, not quite sure what I was doing was right. My child would soon be walking to school on her own, I said. And I wanted to track her. The shop assistant met my query with total approval. As though what I was seeking – to digitally surveille my own kid – was perfectly normal. So I bought the AirTag, which would nestle into her school backpack and assure me that she had arrived at school safely. Electronic stalking of children by their parents is increasingly common. And it's a controversial topic. Is it a valid and respectful way to ensure our children's safety? Or is it an invasion of privacy which is contributing to the anxiety epidemic among kids who have only ever known a world dominated by the smartphone? The phenomenon brings to mind comedian Tina Fey's quip about using Photoshop to digitally alter images: 'it is appalling and a tragic reflection on the moral decay of our society … unless I need it, in which case, everybody be cool'. Whether it's right or wrong, a bias towards surveillance is clearly the prevailing parental sentiment – this week the California-based family tracking app Life360 reported its half-yearly earnings, which showed record revenue growth. The business is worth $9.5 billion, and is expanding into the tracking of ageing relatives and family pets. In Australia, use of Life360 has surged from 1.9 million monthly active users in 2023 to 2.7 million in 2024. 'We're seeing the rise of what we call the anxiety economy – a shift where families are making more values-based decisions and prioritising peace of mind in how they spend,' said the company's newly announced chief executive, Lauren Antonoff. 'I think of us as the antidote for the anxiety. We're not telling people that there's danger around every corner, but we know that people think about this stuff.' The company recently released an advertisement that went viral, which satirised the very parental anxiety it monetises. The ad featured a mother singing a Disney-style song to her teenage daughter called I think of you (dying) in which the mother voices her catastrophic thoughts about the fatal disasters that could befall her child while she's out of sight. They include getting stuck in a mine, being kidnapped by bandits and bleeding out on the street.
The Age
2 days ago
- The Age
Helicopter parent? Yep. Hypocrite? For sure. Why more and more of us are tracking our kids
I slipped into the Apple Store furtively, not quite sure what I was doing was right. My child would soon be walking to school on her own, I said. And I wanted to track her. The shop assistant met my query with total approval. As though what I was seeking – to digitally surveille my own kid – was perfectly normal. So I bought the AirTag, which would nestle into her school backpack and assure me that she had arrived at school safely. Electronic stalking of children by their parents is increasingly common. And it's a controversial topic. Is it a valid and respectful way to ensure our children's safety? Or is it an invasion of privacy which is contributing to the anxiety epidemic among kids who have only ever known a world dominated by the smartphone? The phenomenon brings to mind comedian Tina Fey's quip about using Photoshop to digitally alter images: 'it is appalling and a tragic reflection on the moral decay of our society … unless I need it, in which case, everybody be cool'. Whether it's right or wrong, a bias towards surveillance is clearly the prevailing parental sentiment – this week the California-based family tracking app Life360 reported its half-yearly earnings, which showed record revenue growth. The business is worth $9.5 billion, and is expanding into the tracking of ageing relatives and family pets. In Australia, use of Life360 has surged from 1.9 million monthly active users in 2023 to 2.7 million in 2024. 'We're seeing the rise of what we call the anxiety economy – a shift where families are making more values-based decisions and prioritising peace of mind in how they spend,' said the company's newly announced chief executive, Lauren Antonoff. 'I think of us as the antidote for the anxiety. We're not telling people that there's danger around every corner, but we know that people think about this stuff.' The company recently released an advertisement that went viral, which satirised the very parental anxiety it monetises. The ad featured a mother singing a Disney-style song to her teenage daughter called I think of you (dying) in which the mother voices her catastrophic thoughts about the fatal disasters that could befall her child while she's out of sight. They include getting stuck in a mine, being kidnapped by bandits and bleeding out on the street.
