A turbulent tale of 2 ASX biotech shares: Polynovo (ASX:PNV) and Pro Medicus (ASX:PME)

Why leading ASX biotech shares Polynovo Ltd (ASX: PNV) and Pro Medicus Limited (ASX: PME) have been on very different paths in 2021.

| More on:
A yellow warning sign with black and red arrows going up and down, indicating ASX share market chaos

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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.

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. The Motley Fool Australia has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

three excited doctors with hands in the air
Healthcare Shares

Why Macquarie forecasts a 22% upside for this ASX All Ords healthcare stock

Macquarie expects a big rebound ahead for this ASX healthcare stock. But why?

Read more »

A young man wearing a black and white striped t-shirt looks surprised.
Healthcare Shares

Guess which ASX All Ords stock is jumping 9% on $1.6b market opportunity

This small cap is having a big day. But why?

Read more »

A group of three scientists talking excitedly while working in a lab on a diabetes test developed by Proteomics International Laboratories which is an ASX share tipped to explode by Alto Capital
Healthcare Shares

75% upside: Broker tips two ASX healthcare shares

This broker sees big potential in these two Australian healthcare companies 

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

What does the Macquarie Hospital Claims Index mean for ASX 200 health insurance stocks?

Macquarie shares its view on Medibank Private and NIB Holdings.

Read more »

Two lab workers fist pump each other.
Broker Notes

What's JP Morgan's price target on CSL shares?

Are CSL shares undervalued or will they continue to underperform?

Read more »

Portrait, confidence and team of doctors in the hospital standing after a consultation or surgery. Success, healthcare and group of professional medical workers in collaboration at a medicare clinic.
Healthcare Shares

2 ASX healthcare stocks making huge moves on big news

These shares are getting investors excited today. But why?

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Healthcare Shares

Which ASX All Ords stock is up 15% on guidance upgrade?

Let's find out what is getting investors excited on Tuesday.

Read more »

A senior pharmacist talks to a customer at the counter in a shop.
Healthcare Shares

3 reasons why the Sigma Healthcare share price could be a buy

This business has a very exciting outlook.

Read more »