Healthcare

• Since China TCM doesn’t deny the rumors so far after the trading halt, privatization is becoming likely this time.Rumor said formal negotiations may not begin until after the Lantern Festival.
• CNPGC may not want to pay high prices on privatization.Weak sentiment/share price may help with the negotiations.But the key is to obtain the consent of other shareholders, especially Ping An.
• There’s underlying logic for Taiji Group to drive this privatization. A price of higher than HKD5.1 is possible. If the price could reach HKD6 (or higher), it has exceeded expectations.

• Otsuka Holdings (4578 JP) ended 2023 on a mixed note. Both revenue and business profit were ahead of guidance. However, operating and net profits missed guidance, dragged by impairment loss.
• Four global pharmaceutical products as well as the nutraceuticals business led the business performance. Even after excluding the impact of foreign exchange, the business remained above plan.
• The company has guided for 6% YoY growth in 2024 revenue and business profit to ¥2,140B and ¥330B, respectively. 2024 net profit is expected to jump 106% YoY to ¥250B.

Recce Pharmaceuticals has announced several positive developments in recent weeks relating to its therapeutic programmes, particularly for lead anti-infective candidate RECCE® 327 (R327). It entered a strategic collaboration with an Indonesian biomedical company, PT Etana Biotechnologies (Etana), which may support the engagement of relatively lower-cost clinical trial sites with potentially deep patient pools in South-East Asia (SEA). The company also recently disclosed positive efficacy results among five patients treated in its Phase I/II study of topical R327 in patients with diabetic foot infections (DFI), and it now plans to expand this programme to additional domestic and global sites. We have raised our valuation to reflect the rolling forward of our estimates and reductions in our R&D and SG&A cost projections, following the most recent quarterly cash flow update. We now obtain a risk-adjusted net present value (rNPV) of A$652.6m (or A$3.20/share), versus A$551.1m previously.

• HUTCHMED’s 2023 results are relatively certain. Fruquintinib had a strong start after obtaining approval in the US, with sales of about US$13-15 million in just more than a month.
• Oncology/Immunology consolidated revenue would be in line with management’s performance guidance (US$450 to US$550 million) in 2023. There are promising data readout/NDA submission this year, which would be potential catalysts.
• HUTCHMED has sufficient cashflow and does not require external financing. From 2024 to 2026, it will enter a period of accelerated growth in product revenue. Breakeven is achievable in 2025.

AFT Pharmaceuticals has announced the first sale of its intravenous pain relief medicine, Maxigesic IV, through its US licensing partner, Hikma Pharmaceuticals, a material milestone for AFT’s portfolio expansion and geographic diversification. The NZ$6m milestone payment triggered a bump in FY24 operating profit guidance to NZ$23–25m (from NZ$22–24m previously). The upside was partially offset by slower than anticipated sales traction in Australasia. We adjust our FY24 and FY25 estimates to reflect the update and revised guidance, including the earlier than anticipated milestone payment (pulled forward to FY24 from FY25) and increased anticipated expenses (SG&A and R&D) to align with management’s portfolio and geographic growth aspirations. Our valuation resets to NZ$698m or NZ$6.65/share (from NZ$723m or NZ$6.90/share).

• Hugel Inc (145020 KS) reported 4% YoY increase in revenue to KRW89B, while operating profit grew 22% YoY to KRW37B in 4Q23. Revenue was mainly driven by strong demand filler.
• In domestic market, Hugel’s Botulax maintained the largest market share for the eight consecutive years thanks to the long-standing safety and quality track records as well as holistic value-adding services.
• Hugel has resubmitted biologics license application in the U.S. for BTX. In the coming year, Hugel plans to solidify its position in both the domestic and international BTX markets.

• Since Imbruvica’s sales continued to decline and Calquence hadn’t shown much growth in US since 23Q2, either Zanubrutinib gained more market share or the entire BTK inhibitors market is shrinking. 
• BeiGene’s recent sluggish share price could be related to geopolitical conflicts/weak market sentiment.However, innovative drugs don’t involve supply chain security issues. There’s no need for US to sanction China’s biotech.
• We are relatively optimistic about BeiGene’s 23Q4 sales growth. In our view, BeiGene’s reasonable market value is at least about US$18 billion. BeiGene (6160 HK) is undervalued.   

• Kyowa Kirin Co Ltd (4151 JP) has announced partnership with Bridgebio Pharma Inc (BBIO US) for an exclusive license on infigratinib for achondroplasia, hypochondroplasia, and other skeletal dysplasias in Japan.
• This month, Kyowa Kirin has enrolled first patient in a Phase 2 clinical trial evaluating tivozanib eye drops (KHK4951) in patients with diabetic macular edema (DME).
• The company’s top selling drug Crysvita is growing steadily since launch. Crysvita led to better-than-expected result in 2023. However, higher R&D expenses will negatively impact 2024 operating profit.

• Due to the US Draft Bill against CXOs, stock prices of the entire pharmaceutical industry plummeted. But in reality, there’s no impact on innovative drugs, which is just “emotional suppression”.
• The future BTK inhibitors market pattern predicted by GlobalData is very close to our estimate. This actually indirectly verifies the peak sales level that BeiGene may reach in the future.
• Setbacks on KRAS/SHP2 projects discourage investors’ confidence on Jacobio. We wouldn’t recommend projecting too high expectations on BET inhibitor just yet. Share price performance could continue to be under pressure.

• DexCom Inc., a medical device company focused on the design, development and delivery, presented its recorded Fourth quarter and Fiscal year 2023 earnings call.
• According to the call, the organization’s robust growth momentum has pivoted it towards notable accomplishments.
• The company reported that total revenue grew by 24% on an organic basis, implying a boon of over $700 million of organic revenue compared to the preceding year.

• Asahi Intecc (7747 JP) announced better-than-expected result in H1FY24, with double-digit growth across all major parameters. Growth was driven by favorable Fx, recovery and expansion of cases, and strong demand.
• Revenue from medical division increased 22% YoY to ¥48B. Operating income of the medical division increased 52% YoY to ¥13B, representing 540bps YoY margin expansion to 27.3%.
• Asahi Intecc has not revised FY24 guidance as it is difficult to forecast currency movements and revenue from distributors in medical division due to volatility of quarterly transactions.

• The fourth quarter 2023 results posted by Mettler-Toledo, a Swiss precision instruments company, were significantly impacted by a transition to a new external European logistics service provider.
• The company confides in making up for the majority of the lost revenue in Q1 2024.
• 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.

• In terms of positive outcomes, Waters Corporation reported another transformative year, demonstrating its resilience and ability to adapt effectively amidst a backdrop of dynamic market conditions.
• Various innovative products were launched throughout the year, such as the Alliance is next-generation LC platform, building on the successful top line growth delivered in previous years.
• The integration of Wyatt Technology into its portfolio represents a strategic move, bringing with it a new avenue for value creation for shareholders and opening up access to high growth markets.

• Zimmer Biomet, a leading player in the medical devices industry, presented its fourth quarter 2023 earnings with a buoyant attitude, displaying solid evidence of robust financial performance and operational progress.
• Impressively, the firm underscored the notable growth in its constant currency revenue, which appreciated 7.5%, with adjusted earnings per share (EPS) escalating almost 9.5% over the year.
• Also noteworthy was the almost $1 billion in free cash flow generated during the period, even amid fluctuations in inventory management.

• McKesson Corporation, a diversified health care services company, reported robust fiscal third-quarter earnings during their recent earnings call.
• The business continues to show momentum with total revenues of $80.9 billion and adjusted earnings per diluted share of $7.74 exhibiting a double-digit growth year over year.
• This strong financial performance has been the result of a focused execution against the company’s long-term priorities.

• 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.