Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a> is selling its U.S.-based CDMO business, Metrics Contract Services for $475 million. The transaction is expected to close by the end of 2022.</li>
<li>Allowing for reinvestment needs, the net proceeds from the sale will be used to repay the syndicated debt facility and return surplus capital to shareholders.</li>
<li>Combined oral contraceptive Nextstellis remains the company’s most significant commercial opportunity. While Nextstellis was launched in the U.S. in June 2021, Mayne has launched Nextstellis in Australia in July 2022.  </li>
</ul>



Mayne Pharma (MYX AU) is selling its U.S.-based CDMO business, Metrics Contract Services for $475 million. The transaction is expected to close by the end of 2022.
Allowing for reinvestment needs, the net proceeds from the sale will be used to repay the syndicated debt facility and return surplus capital to shareholders.
Combined oral contraceptive Nextstellis remains the company’s most significant commercial opportunity. While Nextstellis was launched in the U.S. in June 2021, Mayne has launched Nextstellis in Australia in July 2022.  


Mayne Pharma (MYX AU): CDMO Business Sale- A Step Towards Focus Solely on Specialty Pharma

Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

<ul>
<li>Our breaking growth model uncovers slowing growth, margin declines, sales and/or earnings disappointments, troubling working capital trends, poor estimate trends or lowered guidance.</li>
<li>These shorts tend to have moderate to higher betas, time horizons of three to twelve months, higher valuations due to historically strong growth and are often “market darlings”.  </li>
<li>The short response, when growth breaks, is based on a downward reassessment of future growth potential frequently aided by multiple compression that accelerates the decline.</li>
</ul>


Our breaking growth model uncovers slowing growth, margin declines, sales and/or earnings disappointments, troubling working capital trends, poor estimate trends or lowered guidance.
These shorts tend to have moderate to higher betas, time horizons of three to twelve months, higher valuations due to historically strong growth and are often “market darlings”.  
The short response, when growth breaks, is based on a downward reassessment of future growth potential frequently aided by multiple compression that accelerates the decline.


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Novotech Holdings / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/novotech-health-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33411:1" rel="noopener">Novotech Holdings (NVT HK)</a> is a global contract research organisation (CRO). Novotech is the third-largest Asia-Pacific-based CRO and the largest biotech-specialist CRO in the Asia-Pacific region, both in terms of revenue in 2020, according to Frost &amp; Sullivan. The controlling shareholder is TPG and the other shareholders include GIC, Kaiser Foundation Hospitals and Sequoia Capital. Novotech has started pre-marketing an HKEx IPO to raise $0.5-1.0 billion, according to press reports.</p></div><div>
<div><p>In <a href="https://www.smartkarma.com/insights/novotech-health-ipo-initiation-on-demand-science" target="_blank" data-smartkarma-citation="insights:57198" rel="noopener">Novotech Health IPO Initiation: On-Demand Science</a>, we noted that, unlike other H-listed CRO peers, Novotech gives investors an avenue to gain exposure to the broader Asia-Pacific CRO industry. We concluded that Novotech’s fundamentals are solid and the IPO is worth a look for investors willing to brave the current weak sentiment on HKEx IPOs. </p></div>
<div><div><p>In <a href="https://www.smartkarma.com/insights/novotech-health-ipo-a-solid-start-to-2021" target="_blank" data-smartkarma-citation="insights:57255" rel="noopener">Novotech Health IPO: A Solid Start to 2021</a>, we examined the PHIP which discloses the 1Q21 results along with additional disclosures and recent developments. Overall, we maintained our view that the fundamentals look attractive. </p></div></div>
</div><div><div><div class="content-highlight"><p>In this note, we present our forecasts and take the first look at Novotech's potential valuation range. </p></div></div></div>

Novotech Holdings (NVT HK) is a global contract research organisation (CRO). Novotech is the third-largest Asia-Pacific-based CRO and the largest biotech-specialist CRO in the Asia-Pacific region, both in terms of revenue in 2020, according to Frost &amp; Sullivan. The controlling shareholder is TPG and the other shareholders include GIC, Kaiser Foundation Hospitals and Sequoia Capital. Novotech has started pre-marketing an HKEx IPO to raise $0.5-1.0 billion, according to press reports.
In Novotech Health IPO Initiation: On-Demand Science, we noted that, unlike other H-listed CRO peers, Novotech gives investors an avenue to gain exposure to the broader Asia-Pacific CRO industry. We concluded that Novotech’s fundamentals are solid and the IPO is worth a look for investors willing to brave the current weak sentiment on HKEx IPOs. 
In Novotech Health IPO: A Solid Start to 2021, we examined the PHIP which discloses the 1Q21 results along with additional disclosures and recent developments. Overall, we maintained our view that the fundamentals look attractive. 
In this note, we present our forecasts and take the first look at Novotech's potential valuation range. 

Novotech Health IPO: Valuation First-Look

Frontage Holdings / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/27754" target="_blank" data-smartkarma-citation="entities:27754:1">Frontage Holdings (1521 HK)</a> has launched its Hong Kong IPO at a price range of HK$2.55-3.20 per share to raise HK$1.27-1.60 billion ($160-200 million). Three cornerstone investors, Hillhouse Capital, Greenwoods Asset Management and OrbiMed Advisors, intend to purchase $90 million of the offering.</p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/frontage-holdings-ipo-preview-an-uncertain-transition" target="_blank">our IPO initiation note</a>, we cautioned that while the market backdrop is favourable, Frontage is a business in the middle of an uncertain transition. Overall, with the caveat that Frontage has yet to prove that it can reaccelerate organic revenue growth, we believe that the risk-reward profile is favourable at the low-end of IPO price range. </p></div>

Frontage Holdings (1521 HK) has launched its Hong Kong IPO at a price range of HK$2.55-3.20 per share to raise HK$1.27-1.60 billion ($160-200 million). Three cornerstone investors, Hillhouse Capital, Greenwoods Asset Management and OrbiMed Advisors, intend to purchase $90 million of the offering.In our IPO initiation note, we cautioned that while the market backdrop is favourable, Frontage is a business in the middle of an uncertain transition. Overall, with the caveat that Frontage has yet to prove that it can reaccelerate organic revenue growth, we believe that the risk-reward profile is favourable at the low-end of IPO price range. 

Frontage Holdings IPO: Risk-Reward Is Favourable at the Low-End of Price Range

Viva Biotech Holdings / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/27850" target="_blank" data-smartkarma-citation="entities:27850:1">Viva Biotech Holdings (1873 HK)</a> is a leading global contract research organisation (CRO). It has launched its IPO to raise net proceeds of HK$1,232 million ($157 million), at the mid-point of the IPO price range.</p><div class="content-highlight"><p>Overall, with the caveat that Viva's valuation is highly dependent on fair value gains (from its portfolio companies), we believe that Viva can just about justify the low-end of IPO price range</p></div>

Viva Biotech Holdings (1873 HK) is a leading global contract research organisation (CRO). It has launched its IPO to raise net proceeds of HK$1,232 million ($157 million), at the mid-point of the IPO price range.Overall, with the caveat that Viva's valuation is highly dependent on fair value gains (from its portfolio companies), we believe that Viva can just about justify the low-end of IPO price range

Viva Biotech IPO: Just About Supporting the Low-End IPO Price Range

United States

Intra-Cellular Therapies Inc. researches and develops biopharmaceutical drugs. The Company engages in the research and development of small molecule drugs to treat neuropsychiatric and neurological diseases and other disorders of the central nervous system. Intra-Cellular Therapies offers its products to the medical industry.

Reata Pharmaceuticals, Inc. operates as a biopharmaceutical company. The Company focuses on identifying, developing, and commercializing product candidates that modulate the activity of key regulatory proteins involved in the biology of mitochondrial function, oxidative stress, and inflammation to address the unmet medical needs of patients with various life-threatening diseases.

Elanco Animal Health Incorporated operates as an animal health care company. The Company develops, manufactures, and markets products for companion and food animals. Elanco Animal Health serves clients worldwide.

Perrigo Company PLC is a global healthcare supplier that develops, manufactures, and distributes OTC and generic prescription pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients and pharmaceutical and medical diagnostic products. The Company's primary markets and locations of manufacturing and logistics operations are the US, UK, Mexico, and Australia.

Corcept Therapeutics Inc. is a pharmaceutical company that discovers and develops drugs for the treatment of severe metabolic and psychiatric disorders. The Company's lead product modulates the effect of cortisol, also known as the "stress hormone", by selectively blocking the binding of cortisol to one of its two known receptors, the GR-II receptor.

Prestige Brands Holdings, Inc. distributes over-the-counter healthcare and household cleaning products to retail stores in the United States, Canada and other international markets.  The Company distributes oral, eye and skin care; cough, cold, allergy and sinus; and household cleansers, sponges, scrubbers and cleaning pads.

Axsome Therapeutics, Inc. operates as a biopharmaceutical company. The Company focuses on developing therapies for pain, neurological disorders, and other central nervous system. Axsome Therapeutics serves patients worldwide.

Amphastar Pharmaceuticals, Inc. develops and manufactures generic and proprietary injectable and inhaleable pharmaceutical products.

Amneal Pharmaceuticals, Inc. operates as a pharmaceutical company. The Company specializes in developing, manufacturing, marketing, and distributing generic and biosimilar pharmaceutical products. Amneal Pharmaceuticals serves clients worldwide.

Arvinas, Inc. operates as a bio-pharmaceutical company. The Company develops protein degradation therapeutics for cancers and other diseases. Arvinas serves health care industry worldwide.

CSPC Pharmaceutical Group Limited, through its subsidiaries, manufactures and sells pharmaceutical products.  The Company's products include vitamin C, antibiotics and common generic drugs. The Company is also engages in the development of innovative drugs and antibiotics.

Sichuan Kelun Pharmaceutical Co., Ltd. manufactures pharmaceutical products. The Company's products include large infusion products, tablets, capsules, antibiotic injection, lyophilized powder for injection, and traditional Chinese medicine.

China Resources Sanjiu Medical & Pharmaceutical Co., Ltd. manufactures and markets medicines, healthcare products, and medical instruments.  Through its subsidiaries, the Company also operates in pharmaceutical trading, printing, food manufacturing, real estate development, and provides medical services.

China Resources Sanjiu Medical & Pharma (000999 CH)

Abbott India Limited manufactures a wide range of pharmaceutical and medical products, agrochemicals, and animal health products. The Company's medical and pharmaceutical products include insulin injections, anti-dysentery drugs, vitamin preparations, penicillin preparations, sulfonamide tablets, and a variety of household remedies.

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. is a pharmaceutical company. Through its subsidiaries, the Company manufactures genetic medicines, Chinese traditional medicines, diagnostic products, and medical instruments, provides technology, marketing, and advertising services, as well as invests in import and export trading.

Shanghai Fosun Pharmaceutical (Group) (600196 CH)

Cadila Healthcare Ltd. manufactures, and markets healthcare solutions ranging from formulations, active pharmaceutical ingredients, vaccines, diagnostics, health and dietetic foods, animal healthcare to cosmeceuticals.  The Company's products are available in tablets, capsules, injections, liquids, dry syrups, powders, granules, and ointments.

Torrent Pharmaceuticals Ltd. manufactures bulk drugs and pharmaceutical formulations. The Company's formulations include cardio-vascular, psychotropic and anti-biotic drugs while its bulk drugs include atenolol, ciprofloxacin and norfloxacin. Torrent Pharmaceuticals has wholly owned subsidiaries in several regulated and less regulated international markets.

Dr. Reddy's Laboratories Limited provides a complete range of pharmaceutical services. The Company manufactures bulk drugs and formulations including verapamil and cephalexin. The Company also manufactures and exports molecules such as norfloxacin, ciprofloxacin, and varieties of semi-synthetic penicillin. The Company markets its products in India and around the world.

Lupin Limited manufactures bulk actives and formulations. The principal bulk actives manufactured by it include Rifampicin, Pyrazinamide, Ethambutol (anti-TB), Cephalosporins (anti-infectives) and cardiovasculars. The company also possesses competencies in phytomedicines, in which medicines are made out of plant and herbal resources supported by the discipline of modern medicine.

Kyowa Hakko Kirin Co.,Ltd. develops, manufactures, and markets pharmaceuticals. The Company's products include a protein produced by genetic recombination technology, an anti-anemia agent that attaches new sugar chains through partial modification of the amino acid sequence of human erythropoietin (EPO), and a glycoprotein, human erythropoietin.

Catalent, Inc. provides delivery technologies and development solutions for drugs, biologics and consumer health products. The Company's oral, injectable, and respiratory delivery technologies address the diversity of the pharmaceutical industry including small molecules, large molecule biologics and consumer health products.

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Catalent Inc (CTLT US)

Mayne Pharma (MYX AU): CDMO Business Sale- A Step Towards Focus Solely on Specialty Pharma

Mayne is selling its U.S. CDMO business for $475 million. Going forward, the company aims to focus on specialty pharmaceuticals, including women...

Tina Banerjee

Breaking Growth Short Candidates

Get a glimpse into our short idea generation process through our Breaking Growth model update. This week: Insulet, Generac, Catalent and Wingstop...

Eric Fernandez, CFA

Novotech Health IPO: Valuation First-Look

Novotech is pre-marketing an HKEx IPO to raise $0.5-1.0 billion. In this note, we present our forecasts and take the first look at Novotech's...

Arun George

Frontage Holdings IPO: Risk-Reward Is Favourable at the Low-End of Price Range

Frontage Holdings (1521 HK) has launched its Hong Kong IPO at a price range of HK$2.55-3.20 per share to raise HK$1.27-1.60 billion ($160-200...

Arun George

Viva Biotech IPO: Just About Supporting the Low-End IPO Price Range

Viva Biotech Holdings (1873 HK) is a leading global contract research organisation (CRO). It has launched its IPO to raise net proceeds of HK$1,232...

Arun George

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