PricewaterhouseCoopers has released its BioForum report for the fourth quarter FY10 showing a fall of 9.5 per cent for the local Life Sciences Index, which performed slightly better than the broader market.

To a degree the subsectors of biotech and medical devices balanced each other out.

The biotech ex-majors provided the bad news, falling 22.7 per cent with only 8 per cent of companies posting a return compared with 37 per cent in the previous quarter.

In contrast the medical devices ex-majors increased 21.5 per cent. The Medical Device sector as a whole increased only 6.5 per cent following only modest gains by the majors Cochlear and ResMed. Which according to the report "may point, in this sector, to less volatility, shorter commercial timeframes and smaller risk profiles."

In regards to IPOs there were none for the quarter. Last quarter’s listing by arthritis drug developer CBio is the only one to have taken place in the last year, with the company raising just half of the $14 million it had expected and the share price has dropped significantly since the listing.

The past financial year has also seen a number of companies being removed from the Life Sciences Index as a result of suspension or divestment. In the two years to June 2010 the total number of companies on the index fell from 126 to 106.

On the upside, secondary capital raisings increased during Q4 compared to Q3. The biotech sector provided the main driver with secondary raisings increasing from $22 million to $38 million, with the average amount raised increasing from $1.2 to $1.5 million. While the overall sector’s performance was disappointing, it nevertheless managed to outperform the ASX All Ordinaries which fell 11.6 per cent during the fourth quarter.

Year-on-year the Australian Life Sciences Sector increased 11.8 per cent, compared to 9.5 per cent for the All Ordinaries.