Healthcare

• Gilead Sciences exhibited a sturdy performance in 2023, driven by a 7% growth in product sales, excluding revenue from Veklury.
• Significant sales growth was witnessed in HIV and oncology, with HIV sales growing by about $1 billion and oncology sales growing 37%, largely offsetting the decline in Veklury revenue.
• The robust growth in product sales paves the way for Gilead’s outlook for 2024 and its commitment to addressing high-demand clinical portfolios.

• The operator of two medical clinics in Singapore – Singapore Institute of Advanced Medicine (SAM Holdings) is among the first in the nation to install the ProBeam Proton Therapy Solution, an advanced technology used to treat cancer.
• SAM Holdings made its debut on the SGX Catalist today.
• The Varian ProBeam Compact is capable of emitting pencil beam proton therapy to deliver precision proton beam therapy to treat cancer patients, placing the company at the forefront of medical technology in the field of radiation therapy for cancer treatment in Singapore.

• BayMedica reports another strong quarter. The commercial business operating arm of InMed reported revenue of $1.24 million for the quarter ended December 30, 2023, representing a 164% Y/Y increase and 38% Q/Q growth.
• Revenue for the quarter exceeded our estimate of $1.13 million. BayMedica has now recorded quarterly revenue of more than $1 million in three of the last four quarters.
• For the first six months of the current fiscal year ending June 30, 2024, revenue climbed 171% to $2.1 million from $0.8 million in 1HFY23. 

• The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
• The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
• In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.

• Amgen’s Fourth Quarter 2023 Financial Results Conference Call highlighted several strategic moves and positive outcomes for the biotechnology company.
• This past year, the company acquired Horizon Therapeutics, which foundationalized a new branch contributing to its growth.
• Also, 18 of Amgen’s medicines reached record annual sales, including Repatha, Prolia, EVENITY, TEZSPIRE, BLINCYTO, KRYSTEXXA, and UPLIZNA. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Surgery is doctors’ first choice in many cases. Ophthalmic medical devices are also popular. Compared to the market size of ophthalmic surgeries/medical devices, market size of ophthalmic drugs is small.
• Although CLOUDBREAK’s pipeline has the potential to become first-in-class/best-in-class therapies to address unmet medical needs, considering fierce competition, the real market opportunities for its drug candidates may be smaller-than-expected
• In last funding round before the IPO, CLOUDBREAK was valued at US$469 million.Valuation of CLOUDBREAK should be lower than Ocumension Therapeutics. So, premium space for IPO pricing may be limited.

• In 2023, IDEXX Laboratories posted strong quarterly and annual results.
• The company reported an 8% organic revenue increase in Q4, largely driven by gains in CAG Diagnostic recurring revenues.
• Operating profits also rose 8% as reported, with a 10% increase on a comparable basis, aided by robust gross margin gains and OpEx leverage.

• The essence of Yuanxin’s business is selling drugs.Although Yuanxin is backed by Tencent, it’s difficult to come up with more outstanding advantages to compete with Alibaba Health and JD Health.
• We have doubts about Yuanxin’s core competitiveness and sustainable profitability, which are also far behind its peers. In our view, the market/investors may find it difficult to accept such stories.
• Pre-IPO valuation level of Yuanxin has greatly exceeded the valuation of its drugstore business model. Yuanxin’s valuation should be lower than peers, or for example, P/S ratio of below 1x.

• CSL Ltd (CSL AU) has reported strong financial performance in H1FY24, with revenue and net profit growing 11% and 20%, YoY, respectively. Growth was mainly driven by immunoglobulins franchise.
• CSL reaffirmed FY24 guidance. Revenue growth is anticipated to be 9–11% YoY at constant currency. NPATA is anticipated to be $2.9–3.0B at constant currency, up 13–17% YoY.
• The company is confident to deliver double-digit earnings growth over the medium term, citing strong demand for immunoglobulins and successful initiatives in plasma collections that are enhancing efficiencies.

• I-MAB claimed that this divesture is the best strategic choice to respond to the overall environment of China and the US. I-MAB needs to make changes to appease investors.
• The real situation is not as beautiful as it seems.This divesture means I-MAB US has actually been “hollowed out”, which is a big blow to I-MAB US and its investors. 
• With R&D team/production base, I-MAB Hangzhou is able to tell more good stories in the future, which has completed C1 round financing and plans to IPO in A-share or HKEX.

• In Q3FY24, Dr. Reddy’s Laboratories (DRRD IN) posted highest ever revenue of INR72B, led by U.S. and Europe generics businesses, with contribution from both base business and new product launches.
• Underperformance in the domestic market continued in Q3FY24. However, the company’s initiatives regarding innovative and new generic drugs for Indian market should place it for long-term accelerated growth.
• Last month, Dr. Reddy’s acquired MenoLabs, a leading women’s health and dietary supplement branded portfolio of seven products designed to provide health support and address symptoms of perimenopause and menopause.  

• Zoetis is the global leader in the animal health industry. It discovers, develops, manufactures and commercializes medicines, vaccines, diagnostic products and services.
• Zoetis counts with over 300 product lines, with 15 of them generating over 100M in annual sales.
• The latter are called blockbusters, and the company holds

Key points (machine generated)

• Mettler-Toledo attracts a wide range of customers, from large corporations to individual researchers, by providing significant value and profitability for the company.
• The company’s business model is highly resilient, as 80% of its revenue comes from recurring sales of consumables, services, and software, ensuring stable cash flow.
• Mettler-Toledo has a strong track record of innovation, developing new products and solutions that address customer needs and industry trends, such as automation and digitization. 

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Immix Biopharma has released back-to-back updates, including EU orphan drug designation (ODD) for its lead CAR-T asset NXC-201, addressing amyloid light chain amyloidosis (ALA), and pricing of its $15m equity raise. This follows on the heels of the ODD grant for its lead asset by the FDA for two indications, ALA and multiple myeloma (MM), in H223. The EU ODD includes up to 10 years of EU market exclusivity (post-approval), reduced regulatory fees and access to the EU centralized authorization procedure. Achieving ODD in ALA in the EU is a key step forward for the clinical development of NXC-201. We believe the next readout from the ongoing NEXICART-1 trial and dosing of patients at US trial sites (NEXICART-2) across H124 will be the key upcoming catalysts for the company.

• NHSA’s new regulation on establishing a mechanism for pricing newly listed chemical drugs and encouraging high-quality innovation attracted widespread attention. However, it’s difficult to interpret this as an optimistic rule.
• Although we see increasing interest in products from Chinese pharmaceutical companies, it would be difficult for Chinese biotech to be acquired on a large scale in the foreseeable future.
• Based on 2023 results, Medicilon has entered a vicious circle. Multiple sell-offs made us question the moral standards of management. The risk is high for this type of small/lower-tier CXO.

• Cardinal Health has recently announced its financial results for the second quarter of fiscal year 2024.
• CEO Jason Hollar and CFO Aaron Alt expressed satisfaction with the progress the company has made, demonstrating strong profit growth in both segments and expected growth for 7% to 9% in segment profit for fiscal 2024.
• Cardinal Health’s acquisition of Specialty Networks is seen as a key step in enhancing the company’s specialty growth strategy.

• Zydus Lifesciences Ltd (ZYDUSLIF IN) reported 16% YoY and 7% QoQ growth in India formulation business revenue in Q3FY24 on the back of healthy volume growth and new product launches.
• Profitability improvement continued, with Q3FY24 improving 200 basis points YoY to 24.5%. Net profit surged 27% YoY.
• The Board approved INR6 billion buyback, representing 0.59% of total outstanding equity shares at a price of INR1005 per share (25% premium to last closing price) via tender offer route.

• Bio-Techne, amidst challenging macroeconomic conditions, reported an organic revenue decline of 2% for the second quarter of the fiscal year 2024.
• The healthcare company’s earnings were impacted by various headwinds including a cautious biopharma spending environment, a tougher macroeconomic climate in China, and lowered demand from OEM customers.
• Bio-Techne’s core portfolio, however, continued to drive the company’s long-term growth potential with a 7% average growth rate over the last decade.

• Hologic reported its fiscal Q1 2024 results, demonstrating strong financial performance with total revenue reaching $1.01 billion, above the high end of the company’s guidance.
• In spite of four fewer selling days than in Q1 2023, the firm achieved total organic revenue growth, excluding COVID-19, of 5.2%.
• When adjusted for the fewer selling days, estimated total company organic revenue growth excluding COVID-19 was in the high single digits.

• Quest Diagnostics Incorporated’s fourth quarter and full year 2023 earnings call highlighted the company’s strategy to focus on top-line growth across core customer channels and increase profitability.
• In 2023, the company delivered 7% revenue growth in its base business and achieved its earnings commitments as it shifted away from COVID-19 testing.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Terumo Corp (4543 JP) posted highest ever quarterly and YTD revenue and operating profit in Q3FY24. Double-digit growth in C&V and TBCT businesses are the main revenue growth driver.
• During 9MFY24, gross profit margin expanded 50bps YoY to 52%, while operating profit margin improved 40bps to 15.5%. Profitability improvement through price increases and cost reduction is on track.
• Terumo has revised both FY24 revenue and profit upward to reflect continuing positive impacts from yen depreciation. The company is aiming for record high revenue and profit in FY24.

• China Traditional Chinese Medicine (570 HK) (“TCM”) is the traditional Chinese medicine arm of SASAC-managed China National Pharmaceutical Group Corporation (CNPGC), one of the largest healthcare groups in China.
• By my reckoning, TCM has fielded three Offers in the past decade, all from Sinopharm Hongkong, an indirect wholly-owned subsidiary of CNPGC and TCM’s major shareholder.
• TCM was suspended “pursuant to the Code on Takeovers and Mergers” earlier today. The Real McCoy? A no-deal again from CNPGC/Sinopharm? And why didn’t the last Offers complete?

• Agilus Diagnostics Limited (SRLL IN) is looking to raise around US$200m in its upcoming India IPO.
• Agilus Diagnostics Limited (Agilus) is a diagnostic testing service provider.
• In this note, we look at the company’s past performance.

• Demonstrating dependable growth – Q1-3 FY3/2024 results were in line with company guidance, driven by a combination of demand recovery in the Americas, sustained growth for Shofu’s competitive Chemical Products (CAD/CAM resin materials and restorative filling materials), and a forex tailwind – overseas sales made up 57.4% of total sales, indicating stable progress towards the long-term target of 66.0%.
• Shofu’s focus on business investment in R&D, recruitment, and sales activities has resulted in a limited growth profile at the operating profit level for the period (+3.9% YoY), but we believe a boost in sales volume will drive a margin enhancement into Q4 FY3/2024 and beyond.

• Americas and China gaining momentum – the highlight for Q1-3 FY3/2024 was sales growth in North America & Latin America growing 4.1% YoY versus a 4.5% decline in Q1-2 FY3/2024. China also maintained strong momentum with sales growth of 16.5% YoY, and Europe remained steady at 16.8% YoY

• Entero Healthcare Solutions Limited (2294842D IN) is looking to raise US$193m in its India IPO.
• Entero Healthcare Solutions (Entero) is a healthcare products distributor in India.
• In this note, we will look at the RHP updates, undertake a peer comparison, and share our thoughts on valuation.

AFT Pharmaceuticals has announced the launch of Maxigesic IV, an intravenous form of its flagship pain relief prescription medicine, in the US market by licensing partner Hikma, under the brand name Combogesic IV. This is a major milestone given the market size (largest analgesic market, estimated at c US$7bn) and strategic importance in supporting management’s international growth plans. Commercial sales following the launch will trigger a milestone payment of US$6m from Hikma (65:35% split between AFT and partner Hyloris), which will be recorded (c NZ$6m) in FY24, sooner than our estimate of early FY25, and should provide a boost to management’s NZ$22–24m operating profit guidance.

• Stryker Corporation presented impressive financial results during their recent earnings call, driven by a robust demand for both procedures and capital, strong pipeline production, and the easing of macro constraints.
• The company exceeded $20 billion in sales, marking another high-growth year, and reported over 11% sales growth in Q4 and for the full year.
• Margin recovery continued as well, with a 13% compared to the full year of 2022, due to strong sales.

• Thermo Fisher Scientific was able to engage in strong execution and display solid operational discipline in 2023.
• For that year, the company reported a revenue of $42.9 billion, an adjusted operating income of $9.81 billion and adjusted earnings per share of $21.55.
• Thermo Fisher Scientific attributes these achievements to its efforts of delivering differentiated short-term performance while also strengthening its long-term competitive position.

VolitionRx continues to make headway in growing a body of clinical evidence to build Nu.Q® NETs as a potential breakthrough tool in sepsis. These efforts, coupled with its CE mark in Europe, are a strong foundation in rapid and simplified sepsis detection that seeks to address the limitations and complexities of the current standard of care. Sepsis (immune-system triggered organ dysfunction) has a worrisome prevalence, affecting c 50 million per year with a mortality rate of c 20–25%, exceeding the combination of many leading cancers. Further, every hour of delayed treatment increases the chances of mortality of this preventable condition by c 8%. In this note we recap VolitionRx’s recent clinical updates, as we look forward to near-term improvements in early sepsis detection.

• GSK’s performance in 2023 has demonstrated strong growth, with sales and profits excluding COVID solutions rising by double-digit levels.
• Sales increased by 14% to over GBP 30 billion, with adjusted operating profit up by 16% and adjusted EPS up by 22%.
• This strong performance enabled the company to upgrade their guidance for 2023, and they have now announced an increased dividend of 58p per share.

• HCA Healthcare Inc.
• had a robust fourth quarter in 2023, which exceeded expectations across most business dimensions.
• Demand for services remained high across the company’s diverse portfolio.

• Bloomberg reports that Sinopharm is reviving its interest in privatising China Traditional Chinese Medicine (570 HK)/CTCM. Sinopharm has contacted banks about financing and is considering partnering with other investors.
• Sinopharm’s best bet is to partner with Ping An Insurance Group of (601318 CH) and privatise through a scheme. In this scenario, no disinterested shareholder would hold a blocking stake.
• Due to Sinopharm’s previous privatisation attempts, shareholders will be wary of the latest rumour. Nevertheless, the valuation is undemanding compared to peer multiples.

• We once again heard privatization rumor of China TCM, but China TCM denied it at this stage. We still recommend investors to remain vigilant until receive definite official announcement.
• One important background of privatization is the integration of SOE carried out in recent years. We do not rule out the possibility that Taiji Group would drive this privatization.
• It may not be an optimal time for the proposal of privatization by major shareholders. Other shareholders may not want to give up high-quality stocks, which makes privatization challenging.

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular insight are Hangzhou Tigermed Consulting C (3347 HK), East Buy Holding (1797 HK) and Kingkey Financial (1468 HK).

• Chugai Pharmaceutical (4519 JP) reported 5% YoY decline in core revenue in 2023, due to the decrease in the supply of COVID-19 treatment Ronapreve to the government.
• For 2024, Chugai expects core revenue to decline mainly due to the absence of Ronapreve revenue and decline in Actemra export. However, operating and net profits are expected to increase.
• Hemlibra export and new launches such as Vabysmo, Phesgo, Polivy, and Alecensa are expected to drive long-term growth of the company.

Immix Biopharma has announced a $15m (gross), fully underwritten equity issue. The company will use the proceeds to fund clinical trials for lead CAR-T asset NXC-201, as well as to meet working capital and general corporate needs. Immix had a net cash balance of $19.6m at end September 2023 and we estimate that this capital injection will potentially extend the cash runway to end FY25 or early FY26, past the top-line readouts from its Phase Ib/IIa clinical trials for NXC-201 (NEXICART-1), which, if positive, could pave the way for a partnering deal. We view the release of further rolling data from the trial and first patient dosing in the US (NEXICART-2) across H124 as potentially key upcoming catalysts for the company.

• Novartis offers an agreed €68/share, 89% premium, for MorphoSys AG (MOR US) in a bet that pelabrisib could become a blockbuster to treat myelofibrosis (possibly reaching peak sales of $1.1-1.5 billion).
• Considering that the shares of Morphosys were trading in the low teens in November, I believe that shareholders will be happy to part with the shares.
• Spread (gross/annualised) is 4.65%/18.09% (assuming settlement by 20 May). Novartis believes pelabrisib is definitely worth the risk. Long.