Psoriasis patients have been cheering Isotechnika’s lead drug and its winning results in clinical trials.

Now, all the Edmonton company needs to do is discover a miracle potion to arouse biotech investors from their bearish slumber.

And that, folks, ain’t going to be easy. Not in this stock market. Not in this biotech market.

This patient suffers from a contagious disease that has been sweeping the financial markets. He is sick – sick of stocks.

Randall Yatscoff

We checked the pulse of the biotech investor and couldn’t find one.

The news on March 10 from Isotechnika (ISA-TSX) over its positive Phase II clinical trials on psoriasis patients for the drug known as ISA247 should have been a wake-up call for the stock.

But Joe Biotech Investor opened one eye, giving the shares a brief seven-per-cent pop on the Monday morning news, and then rolled over and went back to sleep.

By the end of the day, Isotechnika shares had actually lost two cents. And, no, we can’t blame this one on the old buy-on-rumour, sell-on-news theory. Nope, there wasn’t even a pre-announcement rally.

Even Isotechnika’s conference call failed to boost the stock, which ended the week up a measly two cents at $3.07.

There was some action on the Isotechnika chatboard at www.stockhouse.ca, but when investors grew weary of hyping a takeover of Istotechnika, they hyped the Leafs. Yup, the hockey team!

Isotechnika may be one of few Canadian companies in the biotech space to make significant strides in the past year, but it hasn’t made much of a difference in the share price.

The stock that traded at its high of $6 about a year ago on news of a Canadian record partnership deal worth a potential $215 million US with Swiss pharmaceutical giant Roche has since been chopped in half.

Despite Isotechnika’s promising potential to have a blockbuster drug on the market by 2007, the stock hasn’t fared much better than the biotech sector as a whole. The TSX biotech index is off 38 per cent from its high of the past 12 months and the Nasdaq biotech index is off 41 per cent.

Isotechnika president Randall Yatscoff, who co-discovered the company’s lead drug with CEO Robert Foster, tried to put a positive spin on the stock’s dismal response to the news.

“Other biotechs have gone down,” Foster told the Edge.

Actually, most other biotechs have also been virtually comatose.

“In 2000, it was irrational exuberance,” Foster added, alluding to ridiculous levels that biotechs without a penny of revenue reached during the height of the bull market. “Now, it’s irrational pessimism. We’ve thrown no curveballs from Day 1. Our drug (in the test results on psoriasis patients) has shown it is more potent and less toxic than other similar medicines out there. Eventually, the cream will rise to the top.”

Although Isotechnika is getting the cold shoulder from investors, biotech analysts covet the stock and issued bullish reports on the latest news.

Canaccord Capital biotech analyst Prakash Gowd wrote: “We expect the successful completion of the Phase II psoriasis trial will trigger a significant milestone payment to ISA from its co-development partner (Roche).”

Gowd maintained a buy recommendation and 12-month target price of $7.50. RBC Capital responded to the news by hoisting its 12-month target for Isotechnika to $5.50 from $4.50.

Obviously, Isotechnika is paying the price of colossal biotech busts such as Synsorb (SYB-TSX), the Calgary-based company that recently took a new lease on life as an oil and gas play. Other Alberta companies such as Oncolytics Biotech (ONC-TSX) and Biomira (BRA-TSX) have also floundered.

Foster has said that, considering the stock price, it’s a “reasonable possibility” that Isotechnika will be taken over by a major player in the industry, perhaps even Roche.

Yatscoff acknowledges that a takeover would not be beyond the realm of possibility – his colleague Foster told the Edge recently that it was a “reasonable possibility.” But Yatscoff emphasizes that the company is determined to go it alone.

“You never say never, but our goal is not to set ourselves up for a takeover,” said the renowned biochemist, noting that his company has a ‘poison pill’ in place to ward off hostile takeover attempts.



HOT ALBERTA STOCK: MOVEITONLINE INC.
MOV-TSX 80 Cents
Up 39 cents (+95.1%) on 346,500 shares (for week ending March 14).
When we picked Moveitonline at 40 cents in launching the Edge's Dirty Dozen Penny Stock Index three weeks ago, we didn't plan on a quick double, but we’ll take it. Moveitonline, a Calgary-based company that markets software for shipping and logistics providers, busted out on news of an intended private placement (3.5 million shares at 55 cents per share) and negotiations to acquire a private oilfield services company.



COLD ALBERTA STOCK: UTS ENERGY CORP.
UTS-TSX 37 Cents
Down 17 cents (-31.5%) on 104,400 shares (for week ending March 14).
With the Fort Hills oilsands project in the Athabasca oilsands region in limbo, UTS shareholders have been bailing big time. In January, the Fort Hills project operated by TrueNorth Energy was deferred, but UTS stock has been on a slick downward slope for a year and is now 83 per cent off its 12-month high of $2.20.