A look at Israeli companies listed on Wall Street since the start of the year reveals a strange trend: Some Israeli medical technology companies have been among the top performers on Nasdaq since the start of 2023, while other companies Israeli medical technology companies are among the best performing on the Nasdaq. among the worst performers, losing almost all of their value.
This type of divergence is typical of the medtech industry in which a successful trial can increase share while a failed trial can spell disaster.
Among the Israeli stocks that have outperformed the market is drug development company BioLineRX (Nasdaq: BLRX; TASE: BLRX), which is up 166% this year, after receiving FDA approval for its treatment for myeloma (blood cancer) APHEXDA. Since the drug was only approved in September, it has yet to generate revenue.
Even after the sharp rise in stock price, BioLine has a market cap of just $130 million, which likely accounts for the time and expense required to build a marketing and sales network and educate the market on a new drug, while the company only has a limited cash flow of $26 million in its coffers.
Medical device company InspireMD (Nasdaq: NSPR), which develops innovative stents, saw its stock price rise 156%. The company’s performance is based not so much on a successful clinical trial, but on a deal in which it raised $42 million immediately, rising to $113 million, even though the company had only one market capitalization of $12 million.
Several US funds invested in the company after identifying the potential for sales growth in Europe and InspireMD now has a market capitalization of $50 million.
Brainsway (Nasdaq: BWAY), which markets a magnetic brain stimulation headset for depression and OCD, has experienced a change in sentiment due to a more correct reading of the market. After a period of declining sales, during which the company’s clients, psychiatric clinics, had difficulty purchasing the device due to market conditions and the interest rate environment. The company has developed several models that allow customers to purchase the device almost risk-free, and also receive comprehensive operational services and assistance in marketing the treatment to their patients from Brainsway. Today, the company trades at a market cap of around $98 million, after revenues began to rise again and year-to-date the stock price is up 163%.
Good technologies, problematic market conditions
Usually, big declines in biotechnology and medical devices are the result of a failed clinical trial, and therefore companies that rely on one or two products can lose tens of percent, or even almost as much. their entire value in one day. This is what happened to drug development company Oramed (Nasdaq: ORMP; TASE: ORMP), which is developing an insulin tablet for diabetic patients, and to PolyPid (Nasdaq: PYPD), which developed a implant allowing delayed release of antibiotics. Both companies have not completely disappeared, meaning the market still sees value in their technology and the possibility that they will develop it for additional uses in the future. Ormed trades at a market cap of $87 million and PolyPid at $78 million, both having lost 82% since the start of 2023.
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Galmed Pharmaceuticals (Nasdaq: GLMD), which develops drugs for liver, metabolic and inflammatory diseases, has lost 95% of its value since the start of 2023, even though positive results from a clinical trial were published in January and the Its stock price began to fall. increase. But after initial interest and development in the area in which the company operates, enthusiasm waned and Galmed sank into the well-known quagmire of drug development companies, that of lack of liquidity or strategic investors. and it became unclear whether she would be able to realize her business plans, no matter how interesting they were.
In June, Galmed announced that it had stopped looking for strategic alternatives and was forced to raise capital at a price well below the market price. It then reported the delay of its next clinical trial, causing its share price to fall 96% since the start of 2023.
NovoCure is still worth more than all the others combined
Finally, there is NovoCure (Nasdaq: NVCR), which was the most valuable Israeli company listed on Wall Street in 2021 with a market capitalization of $23 billion. NovoCure is commercializing a new solid tumor therapy using electric fields, which generates annual revenues of $500 million, primarily for the treatment of brain tumors.
The market has been waiting to see what NovoCure could do with other types of cancer, but this year the company experienced a failure in an ovarian cancer trial. Additionally, a lung cancer trial, reported as a great success, was seen by the market as outdated and perhaps not enough to convince doctors to use the product. NovoCure still hopes to gain approval for this product and launch it in 2024, and if it turns out to be as effective as it believes, its fortunes could reverse. Meanwhile, the stock is trading at its lowest price in five years, with a market capitalization of $1.3 billion, still more than all the other Israeli companies mentioned in this article combined.
Although these companies are recognized abroad as Israeli, their business activities mainly take place in foreign markets, and even clinical trials are mostly conducted outside Israel. They are therefore only influenced to a limited extent by the situation in Israel and the local market.
Published by Globes, Israel Business News – fr.globes.co.il – December 17, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
