Healthcare

• This is our first report on Moderna, Inc., a renowned biotechnology company utilizing mRNA technology in the development of therapeutics and vaccines.
• The company entered 2024 optimistic despite challenging 2023 results.
• The company’s revenue for 2023 stood at $6.1 billion, with a net loss of $4.7 billion.

Key points

• EAPI is trading at a significant decrease of €5.10 per share, down from previous levels of €12.00-€13.00 before a downward revision of guidance
• The company is undergoing a strategic review after firing the CEO and facing multiple guidance changes, causing investors to lose faith in the management team
• EAPI was previously highlighted as a minimally levered spinout with potential for growth in CDMO work, but customer concentration with Sanofi as a major revenue contributor has been a factor in its discounted value compared to peers like SFZN

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.

• This is our first report on biotech major, United Therapeutics Corporation (UTC).
• The company posted solid financial results for the fourth quarter of 2023, marking the third consecutive quarter of record revenue, and the second consecutive year of record income.
• The company achieved over 20% growth in both quarterly and annual revenue for the fourth quarter and the full year.

• Exact Sciences Corporation showcased substantial growth and improved profitability throughout 2023.
• With a 24% increase in core revenue amounting to $2.5 billion and an uplifted adjusted EBITDA amounting to $362 million, the firm grew robustly.
• This success is largely credited to the advancement of its mission to eradicate cancer via the facilitation of innovative screening and precision oncology under major brands like Cologuard, Oncotype DX, and PreventionGenetics.

Having shown cognitive activity in prior trials, Actinogen began its XanaMIA Phase IIb study of lead candidate Xanamem in patients with cognitive impairment (CI) associated with mild-to-moderate Alzheimer’s disease (AD). The study will assess c 220 biomarker-positive AD patients, with interim results expected in H1 CY25. Actinogen recently reported results from a human positron emission tomography (PET) imaging study, which affirm the drug’s mechanism of action (MoA) in healthy subjects and patients with AD, by showing that Xanamem exhibited high target enzyme occupancy designed to impede cortisol production, as well as favourable safety and tolerability. Our risk-adjusted net present value (rNPV) remains essentially unchanged at A$528m.

• Medtronic delivered a solid quarter with its mid-single-digit revenue growth exceeding expectations.
• The fiscal ’24 third quarter earnings were underpinned by strength across multiple businesses like Core Spine, Cardiac Surgery, Structural Heart and Cardiac Pacing, along with robust growth witnessed across various international markets.
• Innovation-driven core technologies such as robotics, AI and closed-loop systems acted as significant growth propellers, with five AI products already FDA approved.

• Among core/key products, TY-302 and TY-2136b have to face fierce competition, with R&D progress lagging behind competing products.TY-9591 for brain metastases from NSCLC could be a breakthrough point for TYK.
• There would be a long time for the first product to generate revenue, but TYK is cash shortage.So, the survival risk is high. Such companies are less attractive to investors.
• Valuation of TYK after six rounds of financing was RMB3.08 billion. However, considering the weak sentiment and concerns on pipeline, valuation of TYK after IPO could fall below this level.

• BayMedica’s VP, Sales & Marketing, Jerry. P. Griffin joined us on The Water Tower Hour.
• Those interested can listen to the podcast on Apple Podcasts, Google Podcasts, Spotify, or our website.
• BayMedica is the commercial business arm of rare cannabinoids-based drug developer InMed Pharmaceuticals.

• Classys (214150 KS) achieved its highest performance ever in 2023. Revenue grew 27% YoY to KRW180 billion, 6% higher than the forecast of KRW170 billion announced early last year.
• As demand for equipment increased rapidly in major countries, overseas sales last year exceeded KRW100 billion for the first time, and specially in Brazil, annual sales exceeded KRW40 billion.
• With a positive outlook, Classys is expected to maintain growth trajectory. The company expects 2024 annual revenue of KRW225 billion, up 25% YoY. 

• Jiuyuan is not a typical innovative pharmaceutical enterprise with cutting-edge technology. The current seemingly good revenue/profit performance is actually based on some old products from over a decade ago.
• The risk of VBP could lead to a significant decrease in profit margins at any time. The cyclical changes in heparin industry would put more pressure on Jiuyuan’s performance.
• As Jiuyuan has not yet demonstrated superior clinical data in Jikeqin for overweight/obesity indication, together with fierce competition, we are cautious about the performance in GLP-1s pipeline at this stage.

• Medley (4480 JP) reported better-than-expected 2023 result. Revenue increased 45% YoY to ¥20.5B, EBITDA jumped 77% YoY to ¥3.4B, and net profit increased 152% YoY to ¥2.6B.
• The company expects 2024 revenue of ¥27.1B (up 32% YoY) and EBITDA of ¥3.9B (up 15% YoY). However, net profit is expected to remain flat at ¥2.6B in 2024.
• Medley has established new mid-term targets. The company aims to achieve an EBITDA of ¥20B on revenue of ¥100B in 2029, representing 5-year revenue CAGR of 30%.

OSE Immunotherapeutics has announced a global licence and collaboration agreement with AbbVie to develop OSE-230, a novel monoclonal antibody, for the treatment of chronic and severe inflammation. The announcement marks a positive milestone and much needed endorsement within a sector hindered by funding challenges. This follows sizable transactions in December 2023 and early 2024, including AbbVie’s foray into CNS (Cerevel for $8.7bn) and entry into immunotherapy (ImmunoGen for $10.1bn), covered in our outlook note. The arrangement provides further external recognition of OSE’s innovative R&D capabilities and early-stage pipeline. Deal terms include an upfront payment of $48m, with OSE eligible to receive up to $665m in additional milestone payments. The market response to the news was highly positive, with OSE’s share price increasing by over 60% on the morning of the announcement.

Key points

• RLMD is a biotech company with a high-stakes binary outcome in 2024 for their antidepressant, REL-1017
• Despite previous phase 3 trial failures, the drug has a validated mechanism of action and promising phase 2 data, leading to a $1.1B valuation
• The stock is undervalued and presents a compelling investment opportunity with significant upside potential, especially through underpriced options for exposure to the outcome in mid-2024

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.

IMMX has shared a 12-month recap, capturing key clinical and regulatory events from 2023, setting the stage for an active 2024. Its lead CAR-T asset (NXC-201) is a B-cell maturation antigen (BCMA) targeting therapy for amyloid light chain amyloidosis (ALA) and multiple myeloma (MM). The latest clinical data (Phase Ib/IIa NEXICART-1 trial) showed an overall response rate (ORR) of 100% in ALA patients (n=10) and 90% in MM patients (n=50). On the regulatory front, NXC-201 received Orphan Drug designation (ODD) in February 2024 from the EMA for ALA, and in Q323 from the FDA for ALA and MM. The FDA also cleared Immix’s Investigational New Drug (IND) application in Q423, permitting NXC-201 dosing at US trial sites (NEXICART-2 trial for ALA patients). We believe this is an important development step for NXC-201, and we look forward to rolling data readouts after the start of NEXICART-2, most likely in H124.

• Bristol-Myers Squibb (BMS) reported a strong fourth quarter for 2023 with sales momentum in both their established and new product portfolios, showing a growth of 9% and earning nearly $10 billion in revenue.
• Multiple key brands, including Eliquis, Opdivo, Reblozyl, Opdualag, Breyanzi, Camzyos, and Sotyktu, contributed to this growth.
• In addition, BMS generated significant cash flows from operations amounting to $4.3 billion.

• Eli Lilly and Company’s Q4 2023 earnings showed a year of growth and advancement for the company.
• Revenue increased by 20 percent for the full year and 28 percent for the most recent quarter, as seen in the company’s newly launched portfolio gaining momentum.
• Notably, the company received regulatory approvals for Zepbound, Jaypirca, Omvoh, Ebglyss in the EU, and an expanded label for Verzenio and two new indications for Jardiance within 2023.

• Olympus Corp (7733 JP) announced disappointing Q3FY24 result. Although revenue increased 7% YoY to ¥239B, beating estimate of ¥236B, operating profit declined 30% YoY to ¥34B, below estimate of ¥43B.
• The company cut FY24 operating profit guidance for second time and reduced revenue guidance after raising it in November. Noto Peninsula earthquake is the main reason for reducing revenue guidance.
• Although both revenue and profits are expected to improve in FY25, it will be difficult to achieve an operating margin of 20% and sales growth of 5%.

At the 2024 ESMO Targeted Anticancer Therapies Congress, OSE Immunotherapeutics (OSE) presented encouraging interim results from the Phase I/II dose escalation and expansion study for OSE-279, its anti-PD1 monoclonal antibody. The data show promising preliminary efficacy in patients with advanced solid tumours with no therapeutics options available. The mono therapy has also continued to demonstrate a desirable pharmacokinetic/pharmacodynamic (PK/PD) profile and manageable safety. OSE is investigating various combination approaches, such as with its lead cancer vaccine Tedopi, which we believe could maximise the potential of its proprietary therapies. OSE has six ongoing clinical studies (across several indications) and three pre-clinical assets and, in our view, the most significant upcoming milestone for the company will be initiation of the confirmatory Phase III trial for Tedopi in second-line non-small cell lung cancer (Q224 in the US and extension to European sites in H224).

• During Vertex Pharmaceuticals’ Fourth Quarter 2023 Earnings Call, the company highlighted the achievements of the past year, including the strong financial results they achieved and the progress of their various drug development programs.
• Vertex continued its impressive growth streak, achieving full year CF product revenues of $9.87 billion, which represents an 11% growth from 2022.
• The company attributes this growth primarily to the increased number of CF patients being reached and the groundbreaking approvals of CASGEVY, the first-ever CRISPR/Cas9-based therapy.

• West Pharmaceutical Services recently held its fourth quarter 2023 earnings conference call, closely examining their financial results, providing an update on their business operations, and presenting an overview of their financial outlook for the full year of 2024.
• The company reported a significant base growth in 2023, which offset a decrease of COVID-19-related sales by about $320 million.
• This growth was mainly driven by expanding customer demand for the company’s high value product offerings and their contract manufacturing services.

• Boston Scientific Corporation experienced an exceptional performance in 2023, delivering one of the strongest years in the company’s history by surpassing set financial goals.
• Throughout the year, total company operational sales grew by 15% and organic sales by 14%, exceeding the high-end guidance range of 8% to 10%.
• Operational sales growth for the full year was registered at 13%, and organic sales grew by 12%.

• In healthcare AI industry, the commercialization process is complex and burdened with challenges. Related products mainly plays an auxiliary role in medical scenarios, rather than a core support or rigid-demand. 
• The idea of creating corresponding solutions for C-end and B-end customers by FUNFEI is not inappropriate. However, both B-end and C-end businesses of FUNFEI have encountered varying degrees of problems.
• We’re not optimistic about XUNFEI’s profitability. The sluggish stock price performance after Airdoc’s listing indicates that the market/investors have not fully recognized healthcare AI enterprises, leading to low valuation.

• In 2023, Bumrungrad Hospital Pub Co (BH TB) reported 23% YoY revenue growth to THB25.6B, driven by 32%, 17%, and 11% YoY growth in international, expat, and Thai patients, respectively.
• Driven by high margin international patients, increasing inpatient revenue, and continued cost management, gross profit, EBITDA, and net profit margin expanded in 2023.
• Unrest in Middle-East remained an overhang on BH’s shares. However, revenue from Middle-East patients increased at 23.3% in H2 2023 compared to H1 2023.

• 160 Health collaborates with medical institutions and then get access to high-caliber medical professionals, which helps to attract patients/other business parties. So, its business model is B2B2C, similar to ClouDr.
• However, ClouDr has much better performance than 160 Health, because ClouDr has established moat/barriers to more effectively monetize medical resources, while 160 Health is clearly lagging behind in this regard.
• 160 Health’s revenue mainly comes from sales of pharmaceutical and healthcare products, whose gross margin is very low. As the competition intensifies, the C-end customer acquisition cost would also increase.  

• This is our first report on life science research and clinical diagnostic products manufacturer, Bio- Rad Laboratories.
• The company’s results exhibit resilience with substantial room for improvements and growth in the coming years.
• Bio-Rad’s FY 2023 net sales of $2.671 billion reflect a decrease by 4.7% on a reported basis as compared to 2022.

Key points

• Enhabit Inc., the Home Health & Hospice unit spun off from Encompass Health, is undergoing a strategic review that could result in a potential sale of the company.
• Analysts estimate that if the company is sold, it could fetch a price 50-100% higher than its current value, with a potential equity value of $1.0bn or $20 per share.
• The opportunity for a sale exists due to the company’s undervaluation compared to its parent company, Encompass Health, as well as negative surprises in CMS rates and missed guidance, leading to activist pressure and a strategic review.

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.

• QuantumPharm (QUP HK) (Xtalpi) is looking to raise US$200m in its upcoming Hong Kong IPO.
• QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
• In this note, we will talk about the not so positive aspects of the deal.

• Royalty Pharma reported a strong year of results in 2023, which demonstrated significant enhancements of its portfolio.
• The company reported 9% growth in portfolio receipts and an increase in royalty receipts by 8%.
• A total of $2.2 billion was deployed in cash for transactions while $4 billion in transactions was announced, making it a remarkable year for capital allocation.

• There are 10 changes for the STAR100 Index in March. We correctly forecast all 10 deletes and got 8 of the 10 adds right.
• Estimated one-way turnover is 6.8% and that results in a one-way trade of CNY 1.79bn. Nearly all constituent changes have more than 1 day of ADV to trade.
• The adds have started to outperform the deletes and the index over the last couple of weeks and there could be more outperformance in the next two weeks.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads  Probiotec Ltd (PBP AU), JSR Corp (4185 JP), Shinko Electric Industries (6967 JP), CSR Ltd (CSR AU), China Traditional Chinese Medicine (570 HK), Lithium Power International (LPI AU). 
• Lowest spreads – Tietto Minerals Ltd (TIE AU), Orecorp Ltd (ORR AU), Pact Group Holdings (PGH AU), CPMC Holdings (906 HK), T&K Toka Co Ltd (4636 JP), Snow Peak.    

• Akums Drugs and Pharmaceuticals (0200361D IN) is looking to raise >US$100m in its upcoming India IPO. The deal will be run by ICICI Securities, Axis Capital, Citigroup and Ambit.
• Akums Drugs and Pharmaceuticals (ADP) is a pharmaceutical contract development and manufacturing organization (CDMO) offering a comprehensive range of pharmaceutical products and services in India and overseas. 
• As a CDMO, it produces a range of dosage forms including tablets, capsules, liquid orals, vials, ampoules, blow-filled seals, topical preparations, eye drops, dry powder injections, and gummies, among others. 

• QuantumPharm (QUP HK) (Xtalpi) is looking to raise US$200m in its upcoming Hong Kong IPO.
• QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
• In this note, we will talk about the positive aspects of the deal.

• I tally 53 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Five new deals discussed this week on Smartkarma! Boral Ltd (BLD AU), CSR Ltd (CSR AU), Ansarada Group Ltd (AND AU),TCM (570 HK), and Snow Peak Inc (7816 JP).
• Key updates took place on Azure Minerals (AZS AU),  CIMC Vehicle Group Co Ltd (1839 HK), Outsourcing Inc (2427 JP), and Genetron Holdings Ltd (GTH US).

• Alnylam Pharmaceuticals reported solid progress across all business areas in 2023, delivering robust product growth for its four wholly-owned commercial medicines, and reaching a milestone of over 5,000 patients now on an Alnylam commercial RNAi therapeutic.
• The company recorded $1.24 billion in global net product revenues.
• Alnylam also extended its leadership in RNAi therapeutics, including pioneering delivery of RNAi therapeutics to adipose and muscle tissues.

• Thanks to the continuous support of policies, the TCM industry has ushered in a harvest period. So, TCM remains to be a relatively certain field for investment in China healthcare. 
• Biotech companies must meet several conditions in order to have good long-term development, such as sufficient financial support, at least one blockbuster product and high moral standard of the management.
• Reasonable valuation of Sichuan Kelun-Biotech Biopharm (6990 HK) is about RMB15 billion. So, we think it is now overvalued. Meanwhile, restricted shares will be lifted 12 months after the IPO.

• Avantor delivered fourth quarter business results at the high end of their guidance across key financial metrics, including a core organic revenue decline of 4.8%, adjusted EBITDA margin of 17.5% and adjusted EPS of $0.25.
• They demonstrated robust cash flow management and considerable debt reduction, exceeding their guidance range.
• The company experienced industry wide headwinds due to inventory destocking and cautious customer spending.

• Alteogen Inc (196170 KS) has modified the existing license agreement with Merck. Revised terms of the agreement grant Merck exclusive global right to ALT-B4 for a specific product group, pembrolizumab.
• Under the terms of the revised agreement, Alteogen will receive an upfront payment of $20M from Merck. Alteogen will also receive additional milestone payment of up to $432M.
• Approval of Alteogen’s first proprietary product, Tergase (expected in early 2024) will be the next major catalyst for the company.  

• DaVita, a healthcare company specializing in kidney care and dialysis services, highlights its successful performance for the financial year of 2023 due to strengthening investment on the company’s platform.
• Notably, despite external challenges, the company experienced significant growth with a 20% year-over-year rise in adjusted operating income, a 28% increase in adjusted EPS, and a return of the leverage ratio back to the target range.
• The company outperformed its annual profitability targets for integrated kidney care and anticipates reaching break-even or better performance by 2026.

• Incyte Corporation’s 2023 earnings have been marked by the firm’s strong performance following a 14% increase in product and royalty revenues compared to 2022, reaching $3.7 billion.
• A significant milestone was achieved in the fourth quarter when total product and royalty revenue reached $1 billion for the first time.
• This growth has primarily been driven by the continued growth of Jakafi and the successful launch of Opzelura.

• IQVIA displayed a strong performance in the fourth quarter of 2023.
• CEO Ari Bousbib highlighted that net new bookings for the quarter exceeded $2.8 billion, marking the second largest quarter in the company’s history.
• The business booked $10.7 billion of net new business in the year, including record-high service bookings of $8.4 billion.

• The Samsung KODEX Fn Top10 Equal Weight ETF (395170 KS) tracks the FnGuide Top 10 Equal Weight Index and has an AUM of US$241m.
• We expect Celltrion Inc (068270 KS) will replace Samsung SDI (006400 KS) in the index at the March rebalance.
• There will be 0.26x ADV to buy in Celltrion Inc (068270 KS) while passives will need to sell 0.17x ADV of Samsung SDI (006400 KS). 

• Bangkok Dusit Medical Services (BDMS TB) reported double-digit top and bottomline growth in 4Q23. Growth was attributable to international and Thai non-COVID patient revenues growth.
• In 2023, total revenue was THB102B, up 10% YoY, matching the higher end of the guidance range of 9–10%. EBITDA margin of 24.2% remained higher than guidance of 24.0%.
• In 2024, BDMS expects healthcare business to grow continuously on the back of secular tailwinds in the healthcare sector in Thailand.

• Biogen concluded its Fourth Quarter and Full Year 2023, announcing several positive strides and addressing potential drawback in its prospects moving forward with its outlook for 2024.
• Biogen emphasized its objective of returning to sustainable growth.
• Chris Viehbacher, Biogen’s President and Chief Executive Officer, reported positive earnings per share guidance, a notable element for consideration.

• Zoetis, a leading company in animal health, reported strong results for the full year with an operational revenue growth of 7% which was driven by the success of their diverse portfolio, innovation and the commitment of their colleagues.
• Their products designed for pain relief in osteoarthritis contributed towards a 6% growth in the U.S. sector and 9% operational growth internationally.
• The companion animal portfolio showed an operational growth increasing by 8%, while the livestock portfolio also witnessed improvements, growing by 6%.

• China Traditional Chinese Medicine (570 HK) announced a privatisation offer from the Sinopharm-led consortium at HK$4.60 per share, a 47.4% premium to the undisturbed price.
• The pre-condition relates to various Chinese regulatory approvals. As SOE entities own the offeror, regulatory approvals will be a formality. The offer price is final. 
• Ping An Insurance (H) (2318 HK), which holds a blocking stake, will be supportive. The offer is fair when the previously (higher) rumoured offers are adjusted for the market downturn. 

• $4.60/Share. That’s the number – by way of a Scheme – that only matters. Below the recently rumoured $6/share, and $5.10/share a little over three years ago. Terms are final.
• As widely expected, the Offeror is SASAC-managed China National Pharmaceutical Group Corporation (CNPGC), indirectly owning 32.46% in China Traditional Chinese Medicine (570 HK) (TCM) via Sinopharm Group Hongkong,
• Optically, the Offer price appears light. But this should still get up. TCM is trading rich to peers. No other competing bidder will emerge. Expect regulatory pre-cons to be fast-tracked.

Key points

• Analysts believe R1 (RCM) presents a compelling investment opportunity despite recent challenges
• Predictions suggest profitability improvements and potential doubling of stock value over the next few years
• Long-term outlook remains strong due to industry-leading position and growth potential in healthcare IT sector

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.

• In spite of last week’s hotter-than-expected inflation reports, the Russell 2000 (IWM) outperformed relative to the SPX and QQQ, and ended the week at YTD weekly closing highs.
• The fact that small- and mid-caps outperformed during a week with two hot inflation reports is a sign we could see more outperformance in the weeks/months ahead.
• Adding to the risk-on theme, the DXY displays a false breakout at $104.60-$104.70. Our bullish outlook that we have had since early November 2023 remains intact. 

Key points

• DocGo revolutionizing ambulance industry through technology and non-emergency ambulatory services
• Went public in 2021 raising $158M, expanded services to include COVID testing, vaccinations, and patient monitoring
• Revenue sources mostly low-quality, non-recurring, and government-contract dependent, struggling to maintain profitability outside of COVID-related services

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.

• Takara Bio Inc (4974 JP) reported massive decline of 50%, 98%, and 99%, YoY, in revenue, operating profit, and net profit, respectively during the first nine months of FY24.
• Reagents revenue decline 56% YoY to ¥23 billion, due to decrease of sales of COVID-19 test-related reagents. Japan, which contributed 23% of reagents revenue, reported revenue decline of 83% YoY.
• Takara Bio anticipates a sluggish life science R&D market globally. FY24 revenue, operating profit, and net profit are expected to decline 42%, 85%, and 88%, YoY, respectively.

• Numans values light asset model, which helps reduce cost/expenditures, and thereby increase profits. However, such business model has flaws – no R&D/production, only terminal sales/brand operation, no control over upstream.
• Revenue growth of core business Algal oil DHA products declined.Numans attempts to change its monotonous product line and enter milk powder industry, but the results weren’t ideal. Numans suffered losses. 
• If Numans only plays the role of a “porter” of finished products from abroad and lacks core competitiveness/technological content, it will face multiple challenges to achieve sustained high performance growth.

FY23 was another strong year for Basilea, marked by successive guidance beats and meaningful progress in fortifying its product pipeline. Revenues of CHF157.6m were ahead of guidance, driven by c 23% y-o-y growth in Cresemba- and Zevtera-related revenues to CHF150.3m. Top-line growth, combined with operational prudence (despite investments in growing its portfolio), supported Basilea in achieving a second successive year of net profitability (CHF10.5m, c 2x the guided figure). FY24 will be an important period, with the FDA decision on Zevtera (April 2024) and launch of fosmanogepix Phase III trials. As we update our estimates to reflect the latest sales trend, the outlook for the commercial assets and pipeline potential, we increase our valuation to CHF968.0m or CHF80.7/share.