Best Life Science Stocks 2016: The TSX's Top Performers

- November 29th, 2016

We’re examining the TSX’s five top gainers in the realm of the pharmaceuticals, biotech and medical devices. What’s behind their stock movement?

As 2016 draws to a close, it’s time to look back—and in this case, look closer. Under the magnifying glass today? The Toronto Stock Exchange.
We’re examining the TSX’s five top gainers in the realm of the pharmaceuticals, biotech and medical devices. Who have been this year’s major performers, and what’s behind their stock movement? Considering the catalysts involved may help you make more savvy decisions in the year ahead.

Top-performing TSX life science stocks:

  • CRH Medical (TSX:CRH)
  • Theratechnologies (TSX:TH)
  • Intellipharmaceutics (TSX:I)
  • Knight Therapeutics (TSX:GUD)
  • Aurinia Pharmaceuticals (TSX:AUP)

1. CRH Medical

Topping the TSX’s life science list this year? CRH Medical, whose year to date (YTD) performance shows an impressive 70.98 percent incline. This medical device manufacturer is perhaps best known for its CRH O’Regan System, which treats hemorrhoids. In 2015, it launched a new line of anesthesia services for endoscopic procedures.
In 2016, CRH Medical acquired Johns Creek Anesthesia and made majority purchases of Austin Gastroenterology Anesthesia Associates, Community Anesthesia and Arapahoe Gastroenterology Anesthesia Associates.
Clearly, it was a big growth year for the company—and judging by that upward line on its stock chart, investors took notice.

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2. Theratechnologies

Next up? Theratechnologies. This specialty pharmaceutical company focuses on a niche market, developing products to improve the lives of HIV patients.Their drug EGRIFTA, for example, reduces excess abdominal fat—a side effect of many HIV medications.
YTD, Theratechnologies has made gains over 50 percent. So why the dramatic upswing? The performance may have something to do with clinical trial data for ibalizumab, a therapy candidate intended to treat HIV-1 infection. Theratechnologies announced preliminary results from a phase III trial of ibalizumab in May 2016: an impressive 82.5 percent of patients met the primary endpoint.
The trial concluded in November 2016, again yielding promising data. Significantly, it was the last study necessary before Theratechnologies could file a biologics license application with the FDA. The company is currently preparing that regulatory submission along with its partner, TaiMed Biologics.

3. Intellipharmaceutics

Intellipharmaceutics announced major news in November 2016: its submission of a new drug application for Rexista, a controlled-release pain reliever designed to prevent abuse. Of course, that wasn’t the only catalyst behind Intellipharmaceutics’ YTD gains of 44.29 percent.
It also signed an exclusive license and commercial supply agreement with Mallinkckrodt, received tentative FDA approval for a generic product and announced a public offering of over three million shares.
Talk about a busy year.
Still, those company milestones don’t entirely explain Intellipharmaceutics’ performance this year. Between September 21 and September 22, 2016, the company’s stock soared 22.36 percent—prompting Intellipharmaceutics to issue a press release confirming they did not know of any corporate developments that could have spurred the stock movement.

4. Knight Therapeutics

Just missing a medal spot, Knight Therapeutics comes in at number four on the list of TSX’s top-performing life science stocks. This company, which focuses on licensing drugs and medical devices, has seen YTD gains of 33.42 percent.
What’s behind that performance? In March 2016, Knight Therapeutics acquired the rights to market Impavido outside the United States. It also struck new agreements with a variety of partners, including EMPA Healthcare, Ember Therapeutics (OTCQB:EMBT) and SIFI.
The company’s better than expected third quarter performance also led select analysts to raise their price targets—like Christopher Lam of Paradigm Capital. “We have updated our valuation methodology to reflect the full deployment of Knight’s $558 million in uncommitted capital,” the analyst told clients, according to Cantech Letter. “As such, we are increasing our target to $11.50 (from $9.00).”

5. Aurinia Pharmaceuticals

A clinical stage company, Aurinia Pharmaceuticals focuses on nephrology and autoimmunity. Its lead drug candidate, voclosporin, is in development to treat lupus nephritis. And in 2016, that product reached some exciting milestones.
In September 2016, for example, Aurinia announced that voclosporin had met all primary and pre-specified secondary endpoints in a phase II trial. It was the first global active lupus nephritis study ever to meet its primary endpoint. On the heels of that success (and a meeting with the FDA), the company is now planning a phase III trial for the drug.
As for Aurinia’s stock? It’s faring pretty well too. Share price is up 15.52 percent YTD.
Don’t forget to follow us @INN_LifeScience for real-time news updates.
Data for this article was retrieved using The Globe and Mail’s market data filter on November 28, 2016. Only companies with a market capitalization greater than $50 million are included.
Securities Disclosure: I, Chelsea Pratt, hold no direct investment interest in any company mentioned in this article.

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