Healthcare

• Taidoc Technology is an attractive small cap health care stock in Taiwan. It has a solid dividend yield, strong balance sheet, and stable profits and free cash flow.
• The company’s core business includes clinical equipment and professional instruments including diagnostic, telehealth, and blood sugar and blood pressure monitoring devices.
• We found Taidoc Technology using Smartkarma’s Smart Score Screener system. It has top ranks in the Value and Dividend categories. However, it has lower rankings in the remaining categories.

• Sciclone Pharmaceuticals (6600 HK) disclosed a scheme privatisation offer from GL Capital at HK$18.80 per share, a 33.9% premium to the undisturbed price (HK$14.04 on 15 March).
• The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). The Bank of China, which holds a blocking stake, should be supportive.
• The offer price has been declared final. It is reasonable, aligning with the all-time high and the IPO price. This is a done deal.

• On 27 March, Alteogen announced that Jeong Hye-shin, former Alteogen Chief Strategy Officer (CSO), sold 1.6 million shares of Alteogen stock in after-hours trading in block deal sale. 
• The block deal sale price was 197,770 won. Alteogen’s share price declined by 10.9% today to 195,600 won. Block deal sale amount was about 316 billion won. 
• This block deal sale combined with the sharp recent, share price increase are likely to result in a near-term consolidation of its share price in the next several months.

• The med-tech sector is ripe for consolidation. Smaller players like Hogy Medical (3593 JP) , and Eiken Chemical (4549 JP)  exhibit sub-par growth and lagging valuations
• Activist investors like ValueAct Capital, Dalton and Asset Value have recognized an opportunity for growth and potential M&A
• Both Hogy and Eiken trades at a deep discount to larger domestic peers and stand to benefit the most from any consolidation

• On the 22 December 2023, drugs maker/packager group Probiotec Ltd (PBP AU) entered into a Scheme with Indonesia’s Pyridam Farma (PYFA IJ).
• Pyridam is offering Probiotec shareholders A$3.00/share (in cash, or a 19% premium to the undisturbed price). An interim dividend of A$0.035/share was also added (now gone ex).
• The Scheme Booklet is now out. The Scheme Meeting will be held on the 29th May. The IE says terms are fair. I agree. Trading wide. Gross spread is 4.9%.

• The Probiotec Ltd (PBP AU) IE considers Pyridam Farma (PYFA IJ)’s A$3.00 offer fair and reasonable as it is within its A$2.79-A$3.28 per share valuation range.
• The scheme remains conditional on shareholders’ (Probiotec and Pyridam), FIRB, and OJK approvals. Probiotec can also pay a permitted dividend of up to A$0.04 per share.
• The gross spread of 4.9% (6.3% including dividends) reflects doubts about Pyridam’s funding credibility, as Pyridam’s market cap is 16% of Probiotec’s implied by the offer.

• This is our first report on Fortrea Corporation, a renowned contract research organization (CRO).
• The company reported its fourth quarter 2023 earnings, recording revenue growth of 1.8% year-over-year to $775.4 million.
• CEO Tom Pike praised the company’s transformation over 2023, managing to transition from a division within a larger parent company to a stand-alone entity.

• Despite Q3 being seasonally weak, HealthCare Global Enterprises (“HCG”) reported 11% YoY growth in revenues. Q3FY24 revenue came in at INR 470cr.
• HCG has been focusing on fortifying its clinical talent strength and increasing business promotion. This has been yielding positive result, with Kolkata and Mumbai seeing 57% and 17% YoY growth.
• With the operationalization of four radiation machines now behind us, Q3 saw improved mix of radiation oncology with its growth at 13% YoY vs 11% YoY in overall revenue.

• Beijing Wantai Biological Phar (603392 CH) announced that its net profit for 2023 declined 71–75% YoY to RMB1.20–1.35B mainly due to the market competition.
• China’s HPV vaccine market is highly competitive. Beijing Wantai has no presence in higher valent HPV vaccine segment, which dominates the domestic market.
• Although the company will be one of the early movers in domestically developed nonavalent HPV vaccines, at least three more players will follow soon, thereby making the space more competitive.

Recce Pharmaceuticals recently received A$11.18m as an R&D advance credit through an arrangement with Endpoints Capital for the R&D tax credit rebates that Recce expects to receive for FY23/FY24 and FY25. We believe this non-dilutive source of funding should extend Recce’s operating runway into FY25. Recce is also continuing to advance its intravenous (IV) R327 formulation in its ongoing Phase I/II study in healthy volunteers, having recently started the 20-minute (3,000mg) dosing cohort. We have made minor adjustments to our valuation and we now obtain a risk-adjusted net present value (rNPV) of A$644.4m (or A$3.16/share), versus A$652.6m previously.

• After the market close on 26 March, it was reported that NPS has decided it will side with Chairwoman Young-Sook Song (mother) and her daughter Ju-Hyun Lim. 
• As a result, Chairwoman Young-Sook Song (mother) and Ju-Hyun Lim have secured 40.86% of the shares, which is slightly higher than the ownership of her two sons (38.4%). 
• In the near term, this battle for the control of the company could have a positive impact on Hanmi Science’s share price. 

• FDA approval of Wegovy is overvalued at approx. $460 billion. Market exaggerated the worth without proper assessment of weight loss results and risks associated with the drug.
• Clinical trials showed a 14.9% weight loss with diet and exercise; real-world results would be lower. Impact on BMI for obese individuals won’t be significant. Long-term use is questionable.
• Competition in the GLP-1 market is fierce. Novo Nordisk faces challenges in India and China, increased capex spending, and risks from compounding pharmacies and potential legal issues.

• Siloam International Hospitals (SILO IJ) released a strong set of numbers in FY2023, with increasing inpatient admissions and treatment intensity despite a normalising environment coming out of the pandemic.
• The average revenue per occupied bed remained significantly above peers, whilst the company continued to focus on highly complex clinical programs across cardiology, neurology, oncology, and orthopaedic surgery. 
• Siloam International Hospitals takes a blended approach to premium, value-seeker, and BPJS patients, optimising  efficiencies around the latter. Valuations and growth stack up favourably versus its peers.

• Sigma Healthcare (SIG AU)‘s proposed merger with Chemist Warehouse Group is being reviewed by Australian Competition and Consumer Commission (ACCC), with decision expected in 2H24.
• Although Sigma is witnessing continuing momentum in its business (YTD sales are up by 6.6% YoY) and reaffirmed EBIT margin guidance, merger uncertainty overshadows the improved financial performance.
• We think near-term positives of the company have already been priced in, thereby limited room for upside potential. Merger uncertainty will remain an overhang on the share prices.

• MURA is a micro-cap, speculative, pre-revenue, and non-compounder company that spun off from Alkermes
• Despite a rough start, it is gaining attention and has a market cap of $74 million with $16/share in cash
• Morgan Stanley projects a trading value range estimate of $32-$63/share based on potential sales from their lead pipeline candidate; company is funded with $275 million in cash until 2025

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Immix Biopharma is closer to dosing its first US patient for lead CAR-T asset NXC-201, with the appointment of the Memorial Sloan Kettering Cancer Center as the main clinical site for the company’s US multi-site NEXICART-2 trial assessing NXC-201 in relapsed/refractory (r/r) amyloid light chain amyloidosis (ALA). NXC-201 targets B-cell maturation antigen (BCMA) and is differentiated by its low neurotoxicity and short cytokine release syndrome (CRS) duration to date, supporting Immix’s long-term aspiration to launch the first outpatient CAR-T therapy. The NEXICART-2 study will aim to reproduce the initial results from the Phase Ib/IIa NEXICART-1 study, which reported an overall response rate (ORR) of 100% for the first 10 patients treated. Top-line data from the first 40 patients in the NEXICART-2 trial are expected in 2025, which, if positive, will likely be followed by a biologic license application, a significant milestone for the Immix. The pipeline remains engaged, with IMX-110 in Phase Ib/IIa studies for solid tumors and NXC-201 also targeting multiple myeloma (MM) and, potentially, other autoimmune indications (starting H124).

• This is our first report on biopharma player, Legend Biotech.
• The company’s Q4 earnings call displayed a balance of positive and negative performance aspects for the company.
• Starting with positive highlights, the outlook is promising for their lead therapy, CARVYKTI, which has received a positive opinion from the Committee for Medicinal Products for Human Use for expansion into earlier lines of treatment.

• On 22 March, SillaJen Inc (215600 KS) announced that it will conduct a rights offering worth about 129 billion won for R&D and financials improvement.  
• The rights offering size is 34.5 million shares, representing 34% of total outstanding shares. The expected rights offering price is 3,750 won which is 26% lower than current price. 
• We would not subscribe to this rights offering and we remain negative on the company.

• ChrysCap is looking to raise around US$295m via selling a 2.8% stake in Mankind Pharma.
• MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
• We have looked at the IPO, lock-up release and prior placement in our earlier notes. In this note, we talk about the current deal dynamics.

• The real market space of China’s HPV vaccines is much smaller-than-expected. Investment logic of vaccine companies is different from biotech – They either become large vaccine enterprises or are eliminated.
• Low-Valent HPV vaccines would easily enter a price war or be included in National Immunization Program. 9-valent HPV vaccines would be the main battlefield, which is a highly competitive market.
• Health Guard is facing increasing survival risks. Based on the concerns about the commercialization outlook of HPV vaccines, we’re not sure if the Company would bring expected returns to investors.

• SynPhNe (Synergistic Physio-Neuro Platform), a wearable solution designed to treat stroke and other neurology-related disorders, has received US$5 million in a Series A funding round.
• Event Horizon Technologies, an affiliate of the Nadathur Group, is one of the key investors in this round. The Group is the family office of Nadathur Raghavan, co-founder of Indian software giant Infosys.
• This fresh capital will be used by Singapore-based SynPhNe to expand its rehabilitation services, particularly in the US market.

• Ipca Laboratories (IPCA IN) reported strong Q3FY24 results, with revenue and net profit increasing 33% and 67%, YoY, respectively. Domestic formulation and generic exports remained main growth drivers.
• Ipca’s India formulation business revenue is expected to grow 15% YoY to ~INR7,000 million in Q4FY24. The company guided for 13–14% domestic revenue growth in FY25.
• Riding on improving profitability at Unichem operation and launch of U.S. product, Ipca is expecting 10–12% growth in EBITDA and 2% improvement in EBITDA margin in FY25.  

• Benefiting from changes in pandemic prevention policies and favorable reimbursement policy support, TCM injections market would end its years of continuous decline and enter a period of rapid growth again.
• After Novo Nordisk acquires Catalent, China CXOs would be less likely to obtain the global GLP-1 orders. As MNCs rethink supply chain issues, China CXOs would face more challenges.
• Against the backdrop of anti-corruption/import substitution, investment logic of United Imaging is solid. However, the biggest issue is high valuation. Fundamentals’re difficult to support more than RMB100 billion market value.

• NAVF and Dalton invest heavily in Hogy Medical, eyeing its market dominance and growth potential in disposable surgical equipment
• Despite past underperformance, NAVF’s proactive engagement signals a push for a more aggressive overseas expansion
• We see a number of continued catalysts for future shareholder value enhancement and improved corporate governance position

• Sanjiu’s 2023 performance was below expectations, mainly due to the VBP of TCM formula granules and the anti-corruption since 23Q3. But dividend payout ratio reached 51.96%, the highest since 2001.
• The prescription drug business would be the core of Sanjiu’s performance changes in next two years, especially TCM injection business, which would be benefit from favorable medical insurance reimbursement policy.
• Sanjiu’s management expects to achieve double-digit revenue growth in 2024, with net profit matching the level of revenue growth.We think 2024 performance growth would be lower than that in 2023.

• Despite struggles in the biotech sector, there are opportunities for value investors in undervalued companies like IO Biotech (IOBT)
• IOBT is trading at a deep discount to net cash and is fully funded through 2025, making it an attractive investment option
• Previous recommendation from a well-regarded investor highlights the potential for success in IOBT’s ongoing Phase 3 trials, with a potential upcoming catalyst for significant upside

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• ModivCare (MODV US) issued 2024 revenue guidance, which fell short of consensus. The company anticipates 2024 adjusted EBITDA to be $190–210M, down 2% YoY at mid-point.
• NEMT segment is witnessing decelerating quarterly revenue growth and lower margins. Gross profit per trip of NEMT segment is expected to decline 25% YoY and QoQ to $5.69 in 1Q24.
• Modivcare will see improvement in financial performance no sooner than 2H24. Shares plunged 44% YTD. No recovery is expected in near-term.

• On 21 March, HLB Life Science announced a rights offering capital raise worth 150 billion won. 
• The expected rights offering price is 13,630 won (32% lower than current price of 19,930 won)  and there are 11 million shares in this rights offering (10% of outstanding shares). 
• HLB Inc (028300 KS) is the largest controlling shareholder of HLB Life Science (067630 KS) with an 18.7% stake in the company.

• Dentsply International (XRAY US) guided for 2024 revenue of $3.96–4.02B, flat to up 1.5% on an organic basis and 12% growth in 2024 EPS at midpoint.
• The macro environment continues to be challenging. The company anticipates the ongoing softness in imaging will continue in 2024. Cost savings will support the bottom-line growth.
• In terms of every valuation metrics, Dentsply is overpriced compared to its U.S.-listed peers. Strong balance sheet, accelerating dividend, and buyback do not justify the pricey valuation.

• ESPR pharmaceutical company has two commercialized drugs and could potentially double in value with a $300 million milestone payout
• Ongoing litigation with DSE due to failure to meet payment obligations under a milestone agreement
• ESPR entitled to a Regulatory Milestone Payment pending regulatory approval for a licensed product in DSE territory, making it a strong investment opportunity with potential for high returns

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Edison Investment Research is terminating coverage on Respiri (RSH). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

• Back on 9th Feb 2024, healthcare technology platform IntelliCentrics Global Holding (6819 HK) announced the proposed disposal of its key operations to Symplr Software Holdings for at least US$246.5mn.
• Upon completion of the sale, IntelliCentrics will declare a special dividend, then seek a listing withdrawal. A key condition to the sale was FTC/DOJ approval. That is now satisfied. 
• The sale/dividend/delisting requires a Scheme-like vote, with 72.1% of shares out supportive. This is a super-clean pseudo arb. Pushback? Very illiquid.

• AstraZeneca PLC (AZN LN) bid to acquire Fusion Pharmaceuticals (FUSN US) for $21/share (~$2 billion; 97% premium) plus a non-transferrable CRV of $3/share, for up to $2.4 billion.
• The transaction is expected to close in Q2 2024, which I expect to proceed given AZN’s lack of radiopharma R&D is not likely to raise anti-trust concerns.
• I set my PT to $21. CVR offers 13.6% potential gain, 2.4% annualised (likely small considering the time it might take to materialise). The market may be pricing interloper risk.

• On 9 February, IntelliCentrics Global Holding (6819 HK) announced the disposal of most of its assets to symplr software. On 19 March, the antitrust condition was satisfied.
• The consideration will be distributed to shareholders as a special dividend. The minimum and maximum special interim dividends are US$0.52 (HK$4.08) and US$0.55 (HK$4.30) per share.
• The key condition is EGM shareholder approval. Due to the irrevocables from key shareholders, the EGM vote should comfortably pass. This is a done deal.

• Akeso’s product sales grew rapidly in 2023, mainly driven by off-label use of AK104. Since AK104’s commercialization potential on other indications was “overdrawn” in advance, sales growth would slow afterwards. 
• The key investment logic of Akeso is whether/how much its BsAb pipelines would grab shares from PD-1. The high valuation has somewhat priced in AK112’s successful head-to-head trial with pembrolizumab.
• If AK112 does beat Keytruda, valuation will reach a new level. If AK112 fails in critical clinical trials, it would cast a shadow on the entire BsAb pipeline of Akeso.

• Akeso Biopharma Inc (9926 HK) is looking to raise US$155m from its primary placement.
• Proceeds from the deal would be geared towards R&D expenditure for its preclinical programs, expediting clinical trials, and towards commercializing its existing approved products.
• Accounting for 3% of shares outstanding, and representing 5.7 days of its three month ADV, the deal would be a relatively small one for the firm to digest.

• Lotus Pharmaceutical (1795 TT) achieved 16% revenue growth to NT$17B in 2023, while net profit increased 36% to NT$4B. Growth was mainly driven by the strong performance of Asian business.
• For the first two months of 2024, the company reported revenue of NT$3B, representing 1% YoY decline. While exports grew, Asia business remained flat. 
• 1Q24 should be flat or slightly negative for the company, while growth is expected to pick up from the later half of the year.

Newron Pharmaceuticals has reported results for FY23, an active period for its lead asset, evenamide, being developed for treatment-resistant schizophrenia (TRS) and poorly managed schizophrenia (non-TRS). Strong 12-month data were shared in January 2024 from the Phase II trial (study 014/015) in TRS patients, and management is gearing up to launch a potentially pivotal Phase III trial. We expect the next major catalyst to be results of the Phase III trial (study 008A) in non-TRS patients, now anticipated in April. Improved liquidity following the recent equity raise and renegotiated debt repayment terms with the EIB provides headroom into 2025, by which time we anticipate a licensing deal for evenamide. We have revised our estimates, segregating evenamide’s potential across TRS and non-TRS populations, and refined some of our assumptions. Our valuation increases to CHF219.1m or CHF12.3/share (CHF7.7/share previously).

• Premier Health of America is a leading healthcare staffing company in Canada with rapid growth through acquisitions
• Recent transformational acquisition expected to nearly double revenues and EBITDA
• CFO’s purchase of shares at $0.38 per share indicates a potential value of $1.20 per share, significant upside from current market price

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.