Five Canadian biotech stocks that show resilience and promise

Canadian stock prices have been declining as investor concerns about a possible recession have grown in response to aggressive central bank interest rate hikes. The Toronto Stock Exchange’s S&P/TSX Composite Index ended September down nearly 7.5%. These downturns, however, provide opportunities to invest in business sectors and companies that are bound to remain resilient to economic shocks.

S&P/TSX Composite Index Chart by TradingView

The healthcare sector is one of the industries that is rapidly recovering, and advances in drug research and development are yielding spectacular results. Canada is a global biotechnology leader, with the government assisting in the development of strong, competitive biomanufacturing and life sciences sector, making it a global investment opportunity in terms of size and opportunities. The Canadian government committed to investing C$2.2 billion in the biotech and life sciences sector over seven years starting from 2021.

Despite the challenging macro environment, some Canadian biotech stocks have performed well this year and continue to report solid financial results. Below are five top Canadian biotech stocks to consider.

NurExone Biologic Ltd. (TSXV: NRX)

NurExone is an Israeli biotech company that focuses on the development and commercialization of biological extracellular vesicle (E.V.) technology for the treatment of traumatic central nervous system damage (CNS). The company aims to revolutionize the treatment of spinal cord injury (SCI) globally. Throughout the past few months, NurExone has demonstrated stability and resilience in its stock price, even reaching highs in early October while the majority of the market was in the red. The hope NurExone provides to the millions of patients suffering from SCI globally is just one reason to consider them for your portfolio, but their impressive stock performance alongside major developments recently announced in R&D and on the partnerships side are not to be ignored either. Moreover, if that wasn’t enough, NurExone were recently named an emerging leader in exosome-based treatment of spinal cord injury in a recent report that was covered on BarChart.

Hemostemix Inc. (TSXV: HEM)

Hemostemix, a Canadian clinical-stage biotechnology company founded in 2006, specializes in autologous stem cell therapy and owns 91 patents across five patent families. The company develops, manufactures, and sells blood-derived cell therapies derived from the patient's own blood, a relatively non-invasive source of therapeutic cells. Angiogenic Cellular Precursor (ACP-01), the company's lead product, is currently in Phase 2 clinical trial in Canada and the United States for the treatment of critical limb ischemia, peripheral artery disease, angina, ischemic cardiomyopathy, and dilated cardiomyopathy.

 Hemostemix also develops other cell products, such as Neural Cellular Precursor (NCP-01) for the treatment of Amyotrophic lateral sclerosis (ALS), Alzheimer's, and Parkinson's disease and Bone Cellular Precursor (BCP-01) to treat indications such as bone fractures, skeletal breaks, and surgical procedures.

Sirona Biochem (TSXV: SBM)

Sirona, founded in 2009, is a biotechnology company that uses its proprietary carbohydrate bonding technology platform to develop diabetes therapeutics, skin depigmenting, anti-aging agents for cosmetic use, biological ingredients, and cancer vaccine antigens. Sirona Biochem acquired TFChem in 2011 to work on improving the pharmaceutical properties of carbohydrate-based molecules. The company currently licenses its cosmetic and pharmaceutical compounds to various pharmaceutical companies around the world. Sirona's product pipeline includes diabetes therapeutics, anti-inflammatories, anti-infectives, cosmeceuticals, and biological ingredients such as inducers and adjuvants for biological development and preservation.

Sirona announced on June 13 a global exclusive licensing agreement with Allergan Aesthetics, an AbbVie (NYSE: ABBV) company, to develop and commercialize topical skin care treatments based on active ingredients derived from Sirona's TFC-1067 and related patents.

Microbix Biosystems Inc. (TSX: MBX)

Microbix is a life sciences company that creates and sells proprietary biological and technological solutions for human health and well-being. The company produces a wide range of critical biological materials for the global diagnostics industry, including immunoassay antigens and Quality Assessment and Proficiency (QAPsTM) testing products that support clinical lab proficiency testing, assay development and validation, and clinical lab workflows. Other proprietary products developed by the company include viral transport medium (DxTM) to stabilize patient samples for lab-based testing and Kinlytic Urokinase, a biological thrombolytic drug used to treat blood clots.

Microbix's biological expertise in developing innovative and proprietary technologies has received widespread and long-term market acceptance, with demand continuing to rise. As a result, Microbix had a significant financial turnaround in 2021 and continues to report profitable quarters with revenues increasing in double-digits year-over-year.

Ceapro Inc. (TSXV: CZO)

Ceapro is a growth-stage biotech company that focuses on the development and commercialization of "active ingredients" derived from oats and other renewable plant resources for the healthcare and cosmetic industries. The company promotes the use of its extracts in human and animal cosmeceutical, nutraceutical, and therapeutic products. The company operates in two segments: the Active Ingredient Product Technology Industry and the Cosmeceutical Industry. In the fields of active ingredients, biopharmaceuticals, and drug-delivery solutions, the company has extensive expertise in natural product chemistry, microbiology, biochemistry, immunology, and process engineering. Ceapro's patented process technology, Pressurized Gas eXpanded (PGX), can be used to generate novel high-value biopolymers and biocomposite structures with micro or nano-sized features. In addition, the company supplies ingredients to well-known personal care and cosmetic companies around the world.

Conclusion

Rising oil prices, energy crises, and inflation continue to weigh on growth sectors such as utilities, technology, and energy, putting pressure on the main market index. However, the outlook for the biotech sector appears stable and promising, and the companies listed here have the potential to provide handsome investment returns in a complex economic environment.