ASX biotech shares have had an up and down start to the year. While the S&P/ASX 200 Index (ASX: XJO) is up 1.8%, shares in Pro Medicus Limited (ASX: PME) and Polynovo Ltd (ASX: PNV) have been far more volatile.
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Why ASX biotech shares are up and down in 2021
On the one hand, the Pro Medicus share price has climbed 28.5% and raced to a new all-time high. The company's fifth major contract win in sixth months was a key factor.
Pro Medicus has signed a 7-year, $40 million contract with Salt Lake City-based Intermountain Healthcare. That will see its Visage 7 Viewer and Visage 7 Open Archive products implemented across all of Intermountain's radiology and subspecialty imaging departments.
However, it hasn't been all good news for investors in ASX biotech shares this year. While Pro Medicus shares soar, the Polynovo share price has fallen 35.9% this year.
Polynovo develops biodegradable medical devices that aid in skin tissue repair, led by its flagship Novosorb polymer. An important trading update on January 12 has been the catalyst for the ASX biotech share price slump this year.
Interestingly, Polynovo shares have fallen sharply despite a number of sales updates in recent months.
Polynovo reported a 31% increase in sales over the prior corresponding period (pcp) for the first half of FY21. The Aussie biotech's near term performance could be "volatile", according to managing director, Paul Brennan. Sales also slowed in October and November despite an uptick to finish the year.
The ASX biotech share soared in 2020 meaning some profit-taking may also be pushing the share price down.
Combined with the short-term uncertainty and ongoing impact of the coronavirus pandemic, the Polynovo share price has been under pressure to start the year.
Foolish takeaway
2021 has been the tale of two ASX biotech shares. While Pro Medicus shares soar, the Polynovo share price has been smashed this year.
Both companies are yet to report their half-year results to the market which are expected later this month.
