Belgian biotechs or the winning investment of the first half

Thanks to Tigenix's takeover of Takeda and Ablynx by Sanofi, Belgian biotech companies together show an increase of 65.9% in six months, shows Euronext's half-yearly biotech barometer. Biotechs have also made a lot of demands on the market, raising up to 850.1 million euros.

Investors who bet on Brussels-listed biotech companies at the beginning of the year were very inspired. In the first half, shares of Belgian biotechnology companies rose by 65.9% shows Euronext's biotech barometer for the first six months of 2018, published on Tuesday. The performance of the Belgian values ​​of the sector differs from that of their neighboring French (-13.6%) and Dutch (-4.6%) .

Why do Belgian companies active in biotechnology – the pharmaceutical industry that combines technology and living organisms – have such an impressive form on the stock market? First of all, there were, at the beginning of the year, two takeover bids (OPA) on Belgian biotech. January 5, the Japanese Takeda

set his sights on Tigenix

a transaction finally closed last Friday. And on January 29, French Sanofi

set out to conquer Ablynx

which had already been coveted, without success, by the Danish Novo Nordisk

a transaction which resulted in a delisting of the Belgian value on June 13.

These two takeover bids "strongly contributed to the increase in Belgian valuations " underlines Euronext's barometer. In the wake of the announcements of these occasions, the Ablynx stock had doubled and Tigenix had risen by more than 80%.

These non-recurring facts are not the only explanation for the six-month progress of biotech values ​​of the Brussels Stock Exchange. It turns out that the scientists working in the biotech laboratories of our country have done good work l and have allowed their company to reap the benefits. Indeed, Euronext has several results of positive clinical studies which have supported stock prices, notably in Asit

(January 12), Celyad

    
     (April 27) and Mithra

(May 17). But these shocks actions during the announcement of clinical results do not always stand up to the test of time : over six months, Asit has been treading water and Celyad has lost more than 25% , only Mithra confirms with a tripling of its share price in the first half of 2015.

The performance of Belgian biotechs in the first half is very disparate . For example, ThromboGenics

jumped 109% while Acacia Pharma

has lost 7% (since it went public on March 5th). MDXHealth

    
     took 20% and argenx

was twice as good (+40%).

Euronext's barometer also helps to put this good period of Belgian biotech into perspective since, over a little more than five years, that is to say since January 2013, Belgian biotechnology stocks rose by 27% where their French counterparts took 50% and the Dutch 70%. Together, Euronext's 50 biotech stocks, listed in Brussels, Paris and Amsterdam, took 49% in six months. Their market capitalization went from 15.6 to 19.6 billion euros.

Over time, biotechs have to maintain a sufficient level of cash to conduct their research. Euronext calculated that at the end of 2017, the total cash flow of biotechs listed on its various markets amounted to 3.8 billion euros, compared to 3.3 billion euros a year earlier and 951 million euros at the end of 2013. At the end of last year, the Belgian biotechs accumulated 940 million euros in cash . Euronext also points out that "the markets were strongly solicited in the first half of 2018" . More than seventy fundraising operations took place in six months for a total of 850.1 million euros, compared with 64 operations and 966 million in the second half of last year. "The first half of 2018 is the second most active semester in secondary operations (excluding IPOs, Ed) in the last two years" specifies the barometer.

The only one Euronext's IPO (initial public offering, or IPO) over this period is that of Acacia Pharma

which drained 40.1 million euros to the Belgian market. Lastly, Euronext notes that the average daily volumes of transactions on biotech shares in its markets increased by 25% in the first half, to 123 million euros. What must fix it since its revenues depend on it