2 ASX listed biotech companies to get excited about

Are these smaller players the next CSL Limited (ASX: CSL)?

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Biotechnology is defined as the genetic engineering of living organisms to provide commercial products, and if a cure for cancer is possible, this is likely the way it will be discovered.

Several ASX-listed companies are asserting themselves in the space, and while investors interested in the sector will realise such companies need to jump through plenty of trials and regulation hoops to become profitable, there's no denying it's a market that is worth exploring.

These 2 ASX listed biotech companies appear to have big things on the horizon and should be on your watchlist in the very least.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

Clinuvel Pharmaceuticals may be in small cap territory with the $558 million market cap company focused on developing drugs for treatment of a range of skin disorders, but its share price has rocketed up in the last 12 months to sit at $12.00 at the time of writing, up from $6.86 at this time last year.

So what's behind the company's virtual doubling in share price?

Clinuvel is not only kicking goals in terms of growing its global operations and filing drug applications with the NDA and FDA, but also managed to sustain a revenue increase in the first half of the year, with its balance sheet showing a 3% increase in revenue to $7.19 million, despite NPAT being down 44% on the previous corresponding period to $1.4 million due to expansion costs.

But asserting yourself as an expert in your niche is expensive, with Clinuvel staff now working across 12 countries to market its SCENESSE product which prevents phototoxicity in adult patients with erythropoietic protoporphyria (EPP).

Clinuvel still has a way to go before it is bringing home decent profits, but the global interest in its products does seem to be on the increase and the company appears to be well-poised for expansion.

One to watch.

Bionomics Ltd (ASX: BNO)

Cancer and nervous system disorder focused company Bionomics Ltd has seen a share price surge in the last 12 months, with today's share price of 56c per share up from just 36c per share at this time last year dropping slightly back from a 52-week high of 63c per share on April 23.

Bionomics has received worldwide interest for its BNC210 anxiety drug, still in trials, and there is no doubt the anxiety treatment market is worth big bucks in the future so if they can nail this product it would no doubt mean big things for Bionomics.

Bionomics has plenty of other potentially lucrative drugs in the pipeline to treat disorders such as PTSD and colon cancer.

One to watch as trials are completed and the company moves towards regulation phases.

We must mention small cap biotech company Viralytics Ltd (ASX: VLA) – focused on developing virotherapy for a range of cancers, with patents in major markets across the US and Europe.

Viralytics shares are at a 52-week high this week to $1.71 at the time of writing – a rise from $1.07 at this time last year.

Earlier this month Merck Sharp & Dohme (Holdings) Pty Ltd made an acquisition proposal for the company with Viralytics shareholders to be paid $1.75 for each share held – Viralytics shares shot up 177% on the acquisition announcement.

These small cap biotech's are interesting to watch, but most could only dream of reaching the lofty heights of sector darling CSL Limited (ASX: CSL), with CSL shares up 2.1% at the time of writing to $169.16 a rise of 29% from $130.89 at this time last year.

Investors who have stuck with CSL from the start will have seen astronomical gains on their initial investment, with its early share price of around $12.00 now up by 1,309% over a 14-year term.

CSL is certainly a biotech investment success story and the stock shows no signs of slowing down anytime soon.

It goes without saying that investors interested in the biotech space should keep their eyes peeled on the movements of the little guys with big goals.

Who knows, they might just make it as the next CSL.

Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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