Biotron (ASX: BIT) operates within the healthcare space and is in the process of developing its signature BIT225 compound for the treatment of both HIV-1 and Hepatitis C. HIV is the virus that causes AIDS if untreated, so you can appreciate the huge market opportunity the company can take advantage of if the technology is successful. The product is designed to prevent replication of the HIV-1 virus, which stops the virus progressing. In combination with other anti-retroviral compounds, it offers the potential to completely eradicate AIDS. This is much more attractive to HIV sufferers than existing treatments which only keep the virus at bay and prevent it from mutating into AIDS.
Biotron has a product to treat HIV that is rapidly being commercialised, opening up a huge market opportunity for the $43.5m ASX biotech company (Credit: Biotron Limited)
The company is up 300% over the past year, after the company successfully passed phase 1 clinical trials. Pharmaceutical companies must pass phase I, phase II and phase III trials before successfully commercialising a drug, proving its effectiveness and getting regulatory approval to sell it. Passing phase I trials drastically increases the chance that the technology is able to be commercialised and caused the share price to rally. The stock rallied over a thousand percent on the news, but subsequently declined as investor euphoria waned after the announcement.
The company has five patents and a number of scientific publications on their research. The company is pre-revenue, which means that the ultimate success of an investment is heavily dependent on the interim share price performance. This is because the business needs to continually raise capital to keep developing their products, so share price weakness will result in more shares being sold to achieve the same level of progress, diluting the investments of existing investors.
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