The biotechnology sector is one of the more exciting areas of the market in my opinion. After all, who doesn't want to find the next CSL Limited (ASX: CSL)?
But it is of course a high risk sector with the possibility of big losses if things don't go to plan. You only need to look at the plight of Innate Immunotherapeutics Ltd (ASX: IIL) to see this.
Last week Innate's shares fell 95% after its Phase 2b trial for multiple sclerosis showed no clinically meaningful or statistically significant outcomes.
I believe this shows the importance of meticulously choosing which biotech shares to invest in. Two which I feel are worth taking a look at are listed below:
Bionomics Ltd (ASX: BNO)
The main attraction to this fledgling biotech's shares for me is its BNC210 anxiety drug. Last year Bionomics released strong Phase II trial results which showed that BNC210 not only outperformed the current standard of care, but also exhibited no signs of sedation, memory impairment, addiction, or loss of motor co-ordination. With the anxiety treatment market forecast by management to be worth US$18.2 billion in sales by 2020, BNC210 could become an incredibly lucrative drug for the company.
Cynata Therapeutics Ltd (ASX: CYP)
Cynata is a very promising stem cell and regenerative medicine company which I think is worth keeping an eye on. Its impressive Cymerus technology is able to produce an unlimited number of high quality stem cells at a low cost. These stem cells can then be used to treat numerous diseases including Graft versus Host Disease (GvHD) and cardiovascular disease. The company's major shareholder, Japanese-giant FUJIFILM, has an exclusive worldwide license to market and sell its therapeutic MSC product CYP-001 for the treatment of GvHD.
