The Best ASX Biotech Stocks
to buy Now In
July 2024

Check out our Industry Experts’ report and
analysis on the Best Biotech Stocks right now on the ASX

The Best ASX Biotech Stocks to buy Now In July 2024

Check out our Industry Experts’ report and analysis on the Best Biotech Stocks right now on the ASX

What are Biotech stocks?

ASX biotech stocks alludes to listed companies on the ASX in the biotechnology industry. They are involved in discovering, developing and commercialising drugs and medical devices to fight against or aid with medical conditions. They range from large companies with good sold all over the world like Cochlear and CSL, to smaller companies at the clinical or pre-clinical phases.

Why Invest in Biotechnology Companies in Australia

Investing in biotech stocks is like having a front hand seat to the future of medicine and making a difference to the health of the population. These companies are often on the cutting edge, developing groundbreaking treatments for a range of illnesses, sometimes even those that have eluded cure for years. When their research hits the mark, the financial rewards can be substantial.

What's more, the biotech sector tends to resilient by the ups and downs of macroeconomic conditions.

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What to look for when investing in Australian Biotech Stocks

When considering biotech stocks, a thoughtful approach is essential. Start by examining the company's research pipeline. What kinds of drug candidates are they developing? Are these diverse and promising? The strength and experience of the management team are also crucial, especially their ability to handle complex clinical trials and regulatory hurdles.

Equally important is the company's financial stability. Biotech firms often require substantial funding for research and development, so robust financial health is a key indicator of their potential for success. Regulatory milestones are significant influencers of stock value and should be monitored closely. Also, assess the market demand for their products and the competitive landscape.

The Future Outlook of the ASX Biotechnology Sector

The Australian biotechnology sector is on the cusp of an exciting era. Known for hitting targets and making significant breakthroughs, this industry is set for a surge in growth. A key driver of this upswing is the expected pause in U.S. interest rate hikes, which traditionally boosts biotech investment.

Additionally, the sector is buzzing with mergers and acquisitions, as big pharma companies and life sciences industry are eager to snap up innovative biotech startups. This flurry of activity signals a vibrant future for the industry, filled with opportunities and advancements.

3 Best ASX Biotech Stocks to Buy Now in 2024


CSL (ASX:CSL)

CSL is the largest biotech stock on the ASX, as well as one of the ASX's 5 largest companies - capped at over $150bn. It is best known for its flu vaccine and blood plasma businesses although has a significant R&D pipeline including the Vifor business is bought in 2021.


Dimerix (ASX:DXB)

Dimerix is developing a drug against a kidney condition known as FSGS. It is currently in a Phase 3 trial which is the last step before it can be commercialised, and interim results in March 2024 show positive results so far.



Telix Pharmaceuticals (ASX:TLX)

Telix Pharmaceuticals successfully launched Illucix, its prostate cancer imaging product, and has never looked back in the last year, continually growing its sales in the US. The company faces further upside in the future as it commercialises Illucix in other markets as well as continues work on its products in its clinical pipeline.

3 Best ASX Biotech Stocks to Buy Now in 2024

CSL (ASX:CSL)

CSL has two primary businesses: flu vaccines and blood products – it takes plasma from donors and turns it into life-saving therapeutics, particularly immunoglobin products. Plasma is the substance that carries red and white blood cells through the body – these therapies are relevant for disorders such as hemophilia, primary immune deficiencies, hereditary angioedema and inherited respiratory disease.

CSL was once a government entity, established in 1916. It was privatised in 1994 at $2.30 a share, although it undertook a three for one share split in 2007 making its IPO price 76.7c in real terms, meaning it has been more than a 300-bagger since listing!

The company has a long R&D pipeline that grew substantially after the 2021 acquisition of Switzerland’s Vifor Pharma, which cost US$11.7bn.

And it had some exciting catalysts to come including earnings from Vifor and the potential FDA approval of Hemgenix (the world’s first gene therapy for haemophilia B).

Telix Pharmaceuticals (ASX:TLX)

Telix Pharmaceuticals is one of the few biotechs that has gone from a microcap clinical stage company to a fully commercial company, having successfully bought prostate cancer imagine agent Illuccix to market. With a market capitalisation of approximately $3.5 billion (US$2.3 billion), Telix now ranks as the fourth-largest radiopharmaceutical company globally, trailing only behind giants such as Switzerland’s Novartis AG, Germany’s Bayer AG, and U.S.-based Lantheus. Yes, even though it has just one product.

  • A$55.3m in the September quarter of CY22
  • A$78.2m in the December quarter of CY22
  • A$100.1m in the March quarter of CY23
  • A$120.7m in the June quarter of CY23
  • A$133.6m in the September quarter of CY23
  • A$148.1m in the December quarter of CY23

 

Dimerix (ASX:DXB)

Dimerix is focused on kidney disease. Its flagship asset DMX-200 is targeting a condition known as Focal Segmental Glomerulosclerosis (FSGS).

When you have FSGS, the filters (glomeruli) of your kidneys become inflamed and are damaged by scarring. This makes the filters “leaky” and allows protein from your blood to collect in your urine (proteinuria). For patients with FSGS, the kidneys’ ability to purify (clean) the blood is impaired. This can lead to kidney failure that may eventually requires dialysis or a kidney transplant.

The company is currently in a Phase 3 trial and interim results in March 2024 led to a significant re-rating of shares. The company could potentially have the drug commercialised in the next 3 years.

Pros and Cons of Investing in Biotech Stocks ASX

The biotech sector is forecasted to grow at a compound annual rate of 8.7% until 2030. This growth is driven by continuous advancements in medical technology and an increasing global demand for innovative healthcare solutions.

In regions like China and other developing nations, government initiatives are promoting the growth of biotech. These initiatives aim to simplify the process of bringing new products to market, from streamlining regulatory pathways to standardizing clinical studies, thereby accelerating product approvals.

Investing in biotech requires thorough research to understand the potential and effectiveness of products. Companies that develop drugs addressing significant health issues or that offer cost-effective technological solutions tend to have a higher success rate. This focus on community needs and healthcare affordability is crucial for the success of biotech firms.

However, the biotech sector's complexity poses a challenge for investors without a medical or scientific background. It can be difficult to evaluate the potential of biotech products and their likelihood of success in the market, adding layers of uncertainty to investment decisions.

Retail investors often depend on financial analysts for insights into promising biotech shares. While a 'buy' rating from an investment house can increase stock prices, these gains are not always sustained, introducing an element of volatility and uncertainty.

The journey to market for biotech products, especially those targeting rare diseases, is fraught with challenges. Each step, from clinical trials to regulatory approvals, carries the risk of failure. If a drug fails to get approval or a company reports unfavourable trial results, share prices can plummet swiftly, highlighting the high-risk nature of biotech investments.

How to Choose the Right ASX Biotech Shares?

Selecting the perfect ASX biotech stock requires thorough research, a dose of patience, and a knack for spotting future winners. Start by diving deep into the company's research activities. Are they working on diverse and groundbreaking medical treatments? Check their history: how well do they maneuver through the maze of clinical trials and regulatory approvals? Stable finances are key, as these companies often burn through cash for research before making a dime.

Also, gauge the market's appetite for their innovations and the competition they face. Remember, biotech investing is not for the faint-hearted. It's a high-stakes game with long product development timelines and potential regulatory hurdles.

Success in this sector often comes from backing those innovators who are not just dreaming up futuristic medical solutions, but also possess the smarts to bring these dreams to life in the market.

Are ASX Biotech Stocks right for you?

Deciding whether ASX biotech stocks are right for you hinges on your investment profile and risk tolerance. These stocks offer the thrilling possibility of being part of groundbreaking medical advancements, potentially yielding substantial returns.

However, they're not without their risks - the long and uncertain road to product development and regulatory approvals can be daunting.

If you're the type who relishes the idea of investing in cutting-edge medical research with the potential for high rewards, and you're comfortable with the accompanying volatility and long-term commitment, then biotech stocks might be a fitting addition to your portfolio. But if stability and predictability are more your style, you might want to look elsewhere.

FAQs on Investing in Biotech Stocks

ASX Biotech Stocks are shares of companies in the Australian biotechnology sector, engaged in medical, agricultural, or environmental technology using biological systems. These companies focus on innovative healthcare solutions, including drug development and genetic research.

Our Analysis on ASX Biotech Stocks

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