Here's what we mean.

Over the past 6 months, the All Ordinaries Index (ASX: XAO) is down 2.2%. Not what you'd like to see. But not close to gut wrenching either.

Now let's looks at some large-cap and small-cap ASX biotech shares.

First up, industry heavy weight CSL Limited (ASX: CSL), with a market cap of $129 billion, is down 13% over 6 months.

Meanwhile the Imugene Limited (ASX: IMU) share price has lost 41%, while fellow ASX biotech share Immutep Ltd (ASX: IMM) is down 33% over that same time.

Moving to the smaller, and more speculative end of the spectrum, Avecho Biotechnology Ltd (ASX: AVE) shares are down 40% in 6 months; the Volpara Health Technologies Ltd (ASX: VHT) share price has lost 43%; and Chimeric Therapeutics Ltd (ASX: CHM) shares are down 55%.

Then there's EBR Systems Inc (ASX: EBR). EBR Systems only listed on the ASX on 24 November last year. While it's up 163% since listing, most all of those gains came on the first days of trading. Since 25 November, shares in EBR system are down 32%.

And it's not just ASX biotech shares under pressure.

Over in the United States the Nasdaq Biotechnology Index is down 25% in 6 months.

What's next for ASX biotech shares?

Chimeric CEO Jennifer Chow said she's hopeful that a few things could turn the cycle around.

According to Chow (quoted by The Australian Financial Review):

Obviously, the world settling a bit. But, for biotech, a lot of development was slowed because of COVID-19 … it had an impact on clinical trial registrations … but patients are getting back to centres and hospitals are focused on clinical trials again. There was also a slowing down in M&A at the end of last year … and that's starting to pick up again.

Matt McNamara is the chief investment officer at Horizon 3. With a 3-to-5-year investment horizon, the recent sell-off isn't keeping him awake:

I look at the positions we hold and none have changed in terms of their investment thesis. I don't see a problem with any of the companies … We're patient investors and ride out the bumps. I think there's good buying at the moment.

Horizon holds ASX biotech shares EBR Systems, Volpara Health and Avecho Biotechnology. McNamara said investors should look at "the prospects of the market they're breaking into, the experience of the management team, and if they have the skills around the board."

Why the small-cap space may be in for more pain yet

Rory Hunter, portfolio manager at SG Hiscock draws a sharp distinction between well-established ASX biotech shares and microcap newcomers.

According to Hunter (quoted by the AFR):

We've gone from this euphoria phase to the opposite end of the spectrum, and that's why there's been so much value destruction. You're going to see a flight to quality. People have lost a lot of money in some of these companies that came to market last year. It'll remain really challenging for quite some time.

We are looking to redeploy capital into companies that are already in the commercialisation phase. When we get a view on the better market conditions, we'll also look at those business that are in phase three trials … and have significant addressable markets.

The post Do ASX biotech shares offer 'good buying' after the sell-off? Experts weigh in appeared first on The Motley Fool Australia.

During late morning trade, the Avecho share price reached an all-time high of 3.9 cents. However, investors have been quick to take some profit off the table. At the time of writing, the biotech company's share is swapping hands for 3.3 cents, still up a sizeable 83.3%. In comparison, the All Ordinaries Index has climbed 0.6% higher to 6,883 points.

What did Avecho announce?

According to its release, Avecho advised that it will commence the testing of its enhanced cannabidiol formulation in the CA Clinics Observational Study (CACOS). The clinical testing phase will look at the performance of its oral cannabidiol (CBD) TPM formulation in human patients.

The CACOS study is seeking to recruit up to 3,000 people around the country through a network of medicinal cannabis clinics. During the trial, CACOS will provide patients with a questionnaire that will ask about side effects, dosage response, and remedy satisfaction.

In previous studies, Avecho's oral CBD TPM product demonstrated an increase oral bioavailability of CBD in animals. The company has now set itself up to collect feedback on product performance in human patients using medical cannabis for a number of treatments. This in turn will be compared against other commonly prescribed CBD products in the market.

Avecho stated that it will begin enlistment and run the trial throughout next year, in a bid to capture as many patients as possible. 

Words from the CEO

Avecho CEO Mr Paul Gavin commented on the major achievement:

The Avecho team is excited and optimistic about our plan to develop CBD products enhanced by our TPM technology.

This trial is an important step in gathering real world evidence from patients. Entering into an existing trial framework provides Avecho with both cost and speed advantages. The observational trial design allows the product to be used in a range of indications, which may prioritise specific indications for further development, or eliminate indications where the treatment is less effective.

Furthermore, Mr Gavin spoke about the recent Therapeutic Goods Administration (TGA) decision to reduce the maximum dosage of non-prescribed CBD products. He said:

The down-scheduling of CBD is fantastic news for patients, but a 150mg dose is on the limits of efficacy for a range of indications. We believe increased bioavailability will be a key value driver that will positively differentiate our products in this growing competitive market.

How has the Avecho share price performed in 2020?

The Avecho share price has shot up over 700% in the past 12 months, reaching an all-time high today.

After falling as low as 0.2 cents in March, the company has been gradually moving along an upwards trajectory. Avecho has a market capitalisation of $49.5 million on current prices.

The post Avecho (ASX:AVE) share price rockets 83% on milestone announcement appeared first on The Motley Fool Australia.