Healthcare

• GUPPY’s Inc (5127 JP) has recommended Medley (4480 JP)’s tender offer of JPY3,250 per share, an 81.0% premium to the undisturbed price (19 January). 
• The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 10.19% ownership ratio. 
• Despite the premium, the offer is light vs the IFA DCF valuation. Based on the irrevocables, the minimum acceptance condition requires a 23.4% minority acceptance rate, which is achievable. 

• Genetron Holdings Ltd (GTH US) shareholders will vote on the consortium’s US$4.08 per ADS offer on 21 February. The offer is light in comparison to historical trading ranges.
• Completion is conditional on shareholder approval, dissenting shareholders representing less than 15% of outstanding shares and regulatory approvals (NDRC, MoC and SAFE). 
• Despite the light offer, the completion conditions should be met. At the last close price and end of March completion, the gross and annualised spread is 7.7% and 45.5%, respectively.

• As more and more China’s drugs successfully obtained FDA approval, we analyzed the “style” of the US FDA, aiming to help investors understand the prospects of domestic companies’ internationalization strategies.
• For mature pharmaceutical companies, we analyzed the benchmarks for some key financial indicators in terms of both revenue and cost. On these basis, companies’ profit performance would be decent. 
• As a top pharmaceutical SOE, China Resources Pharmaceutical (CRP) wouldn’t go bankrupt.This is the bottom line.Together with stable dividends, CRP is a worthwhile investment target to hold in bear market.

• Back on the 11th October 2023, Genetron Holdings Ltd (GTH US), a precision oncology platform, entered into a definitive take-private transaction, at $4.08/ADS, a 15% premium to undisturbed.
• The EGM for shareholders to vote on the transaction will be held on the 21 February. The record date is the 9 Feb.
• This merger requires approval from at least two-thirds of the votes cast, and 59.7% are supportive. Trading at a gross spread of 7.7%. This is a clean deal.

• Medley (4480 JP) operates recruitment platforms in healthcare, elsewhere. GUPPY’s Inc (5127 JP) does too. They also offer exam prep for two niches where they have super-high market share.
• GUPPY’s was listed 18mos ago, and the founder wants out. The deal is a nice premium (+86%) but it isn’t as generous a deal as it could be. 
• That said, the shareholder structure looks like this deal gets done pretty easily. 

• This is our first report on cloud-based tech service provider, HealthEquity.
• Despite uncertainties, such as negative market action, which resulted in the sequential reduction of invested HSA assets by $0.6 billion, HealthEquity reported that HSA members continued to invest their assets, thereby partially offsetting market declines.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Key points (machine generated)

• The Beauty Health Co (BH) operates on a recurring revenue model, generating consistent income from its consumables business.
• The company is currently undervalued in the market, offering potential value for investors.
• BH holds a dominant position in its category and can take advantage of scale and network advantages.

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.

Basilea has announced a preclinical antibiotic programme asset purchase agreement, aligning with management’s pre-emptive efforts to refill its pipeline with novel anti-infectives. This follows on the heels of three antifungal and antibacterial acquisitions/in-licensing, including fosmanogepix. As part of the agreement, Basilea will pay Spexis (SIX: SPEX) up to CHF2m, consisting of an upfront payment, an asset-transfer payment and a potential final milestone payment related to the availability of near-term funding to further develop the programme. Basilea will also assume the rights and obligations of Spexis, including potential low single-digit percentage royalties on sales. The programme is based on an Outer Membrane Protein Targeting Antibiotics (OMPTA) platform and the compounds have shown in vitro and in vivo activity against Gram-negative bacteria (GNB), including multidrug-resistant strains, several of which are listed as priority pathogens by the World Health Organization (WHO).

• Hisamitsu Pharmaceutical Co (4530 JP) has reported double-digit revenue and net profit growth in Q3FY24, mainly driven by 21% YoY growth in Salonpas focused OTC pharmaceutical products.
• The company attributes OTC product revenue growth to aggressive sales promotion activities in Japan and overseas, recovery of domestic economic activity and inbound demand, and impact of the weaker yen.
• Encouraged by Salonpas revenue recovery, Hisamitsu has raised FY24 guidance. The company has revised FY24 revenue guidance upward by 7% to ¥141 billion (up 10% YoY) from ¥132 billion.

• Building on a year of progress. Following a banner year for InMed in 2023, including significant advancement and expansion of its rare cannabinoids-focused pharmaceuticals development programs and a breakout year for BayMedica’s commercial operations, the company has laid out its strategic priorities for 2024.
• Advancing a potentially novel approach to treating Alzheimer’s.
• In October 2023, InMed took a significant step forward in its INM-900 series program targeting neurodegenerative diseases after confirming that it has made its final selection of a lead Alzheimer’s disease drug candidate.

• Since mid-December, spreads have generally tightened across our European liquid universe of ordinary and preferred shares (10 have tightened, 7 widened, 2 at same level).
• Recommended trades long preferred / short ordinary shares: Danieli, Grifols (the most interesting situation in this report), Media-for-Europe, Sixt, Volkswagen.
• Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, SSAB Svenska Stal.

• Investing into cannabis stocks has been a soul-crushing experience for investors over the past 10 years.
• Check out the performance of the Global Cannabis Stock Index below.
• It’s effectively a complete wipe-out.

• 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.

• Honestly, I’m stunned I’m writing this. I did my research on Zoetis during June, July and August, and my conclusion seemed, funnily, conclusive.
• My suspicion was that Zoetis was as close to being a truly durable company as possible.
• Even though the object of this article does not claim otherwise, it does indeed reveal something I completely overlooked. My conclusion was ultimately drawn from the following:

• Due to centralized procurement and anti-corruption campaign in 23H2, negative YoY revenue growth in 2023 seems to be inevitable. We are not optimistic about Weigao’s performance turnaround in 2024.
• After new policy strictly prohibiting borrowing to purchase medical equipment in public hospitals was released, the investment logic of medical device sector changes, which would negatively affect Weigao’s outlook.
• Weigao feels like “living off its past gains”.Current valuation is reasonable not undervalued. There’s no need to rush to long this stock when downward trend in share price hasn’t reversed.

• WuXi Bio’s optimism about new orders failed to generated expected surge in its stock price. Many investors raised great doubts about the credibility and professionalism in communication of WuXi Bio.
• It’s easy/cost-effective for WuXi Bio to “adjust” order number. However, it’s more difficult to inflate revenue/cash flow. We have to wait for future financial results to know the real situation.
• XBI is essentially “a bond”.Recent surge of XBI is driven by the expectations of Fed’s rate cut + US soft landing, rather than virtual improvement of external environment.Much remains unclear.  

• Sumitomo Pharma (4506 JP) still expects FY24 revenue of ¥362 billion (down 35% YoY). This implies H2FY24 revenue of ¥209.4 billion, up 37% compared with H1FY24.
• To achieve this target, North America needs to perform strongly. H1FY24 revenue from North America has shown a progress rate of just 35% against full-year FY24 revenue guidance.
• With the absence of any strong catalyst, we expect recent rally in Sumitomo shares fueled by encouraging clinical trial result and new drug approval in China, will be short-lived.

Key points (machine generated)

• Vanda Pharmaceuticals has established revenue-generating drugs and a pipeline of potential candidates in development.
• The company has a strong balance sheet with ample cash reserves, offering potential for investments or acquisitions.
• Despite these positive traits, the market values Vanda as if its core business is worthless, presenting a potential investment opportunity with significant upside potential.

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.

• I tally 45 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• One new deal discussed this week on Smartkarma: TDCX (TDCX US)‘s MBO.
• Key updates took place on: Orecorp Ltd (ORR AU), T&K Toka Co Ltd (4636 JP), Taisho Pharmaceutical Holdin (4581 JP), Benesse Holdings (9783 JP), and IJTT Co., Ltd. (7315 JP).

• After the market close on 12 January, OCI Holdings (010060 KS) announced that it plans to acquire a 27.03% stake in Hanmi Science (008930 KS) for 770 billion won. 
• Through this investment and integration between OCI Holdings and Hanmi Science, the OCI Group and Hanmi Pharmaceutical Group plans to establish a joint management system.
• This deal between OCI Holdings and Hanmi Science is not over and it could lead to an M&A fight for the control of Hanmi Science by its family members. 

• The entire R&D cycle involves multi-party cooperation, leveraging one’s strengths. So, it is not difficult to understand some of the choices made by domestic pharmaceutical companies (e.g. Innovent, BeiGene).
• Due to outdated technology, investment value of Sirnaomics is low, which means the likelihood of the company being acquired is also not high. We remain conservative about the outlook. 
• ImmuneOnco’s stock price has performed much better-than-expected after IPO on HKEX. However, the endgame of ImmuneOnco’s market value could be only about RMB1.5 billion, which means large potential downside ahead.

Key points (machine generated)

• Rainbow Children’s Medicare operates a hub hospital with multiple spoke hospitals in various locations, allowing them to serve a wide geographical area and reach a larger patient base.
• The company has a strong financial performance, with profitable growth and operating cash.
• Rainbow Children’s Medicare aims to address the underserved niche pediatric market in India and capitalize on the country’s large adolescent population, presenting significant growth potential. They plan to expand their operational bed capacity by 40% by 2026.

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.

• Boston Scientific Corporation delivered an all-around beat in the previous quarter, demonstrating sustained momentum driven by new product innovations, clinical evidence, and the dedication of global teams.
• In Q3, the company achieved remarkable operational and organic growth, with total sales increasing by 11% operationally and 10% organically compared to Q3 ’22.
• The adjusted EPS for Q3 reached $0.50, a 15% increase over Q3 ’22, exceeding the guidance range of $0.46 to $0.48.

• AstraZeneca PLC delivered a mixed result in the recent quarter, with revenues below market expectations, but managed to surpass the analyst consensus regarding earnings.
• They reported a 5% increase in total revenue, reaching $33.8 billion in the first nine months of the year.
• Notably, the non-COVID-19 medicines demonstrated a robust 15% growth, offsetting the $2.9 billion decline in revenue from COVID-19 medicines.

• The Cooper Companies delivered a mixed result in Q4, with revenues above market expectations, but it failed to surpass the analyst consensus in terms of earnings.
• CooperVision’s outstanding performance stands out, achieving an impressive 11th consecutive quarter of double-digit organic growth.
• MiSight’s impressive 41% revenue growth in myopia management, driven by positive trends in the Americas and EMEA, solidifies Cooper’s position in proactive myopia control.

• DaVita Inc. delivered a solid result and managed an all-around beat last quarter.
• Financially, the third quarter saw impressive results, with adjusted operating income reaching $525 million and adjusted earnings per share at $2.85, surpassing expectations.
• Looking ahead, DaVita revises its 2023 adjusted operating income guidance to $1.65 billion to $1.725 billion and adjusted earnings per share to a new range of $7.80 to $8.30.

• In the third quarter, Henry Schein reported mediocre financial performance with below-par revenues and earnings that were just about in line with analyst expectations.
• Despite decreased PPE and COVID-19 test sales, the company achieved commendable total sales and non-GAAP diluted EPS growth.
• As Henry Schein progresses through its BOLD+1 Strategic Plan, the management remains confident in the stability of dental and medical markets, adhering to strategic priorities despite cybersecurity incidents.

• Hologic, Inc. managed to exceed analyst expectations in terms of revenue as well as earnings, concluding Q4 with total revenue at $945.3 million and non-GAAP earnings per share at $0.89.
• The Q4 results highlighted a 16.7% total organic revenue growth, excluding COVID-19, with double-digit growth in all divisions.
• Notably, the company deployed substantial capital for share repurchases in Q4 2023 and Q1 2024, with an additional $500 million accelerated share repurchase program announced.

• Regeneron Pharmaceuticals, Inc. delivered an all-around beat in the previous quarter, witnessing a commendable 15% surge in total revenues.
• The notable upswing was propelled by increased Sanofi collaboration revenues and a remarkable 62% growth in LIBTAYO global net product sales, complemented by a 50% surge in Dupixent global net product sales, totaling $3.1 billion.
• In the quarter, the management highlighted the successful launch of EYLEA HD, which achieved $43 million in net product sales within the final six weeks of the quarter.

Key points (machine generated)

• Roivant Sciences is set to close a $7.25 billion deal with Roche for Telavant, bringing their total value to $12 billion.
• Despite the negative sentiment in the biotech industry, ROIV shares have the potential for over 100% upside with minimal downside, making it an attractive investment opportunity.
• ROIV is likely to return capital to shareholders, benefiting existing holders such as Softbank and Sumitomo.

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.

• Royalty Pharma plc delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• The fiscal triumphs included a notable 9% augmentation in adjusted cash receipts, a parallel ascent in adjusted EBITDA, and a remarkable 10% surge in adjusted cash flow.
• The expanded partnership with PTC was particularly laudable, resulting in procuring additional royalties for Evrysdi, a treatment for spinal muscular atrophy.

• Taisho Pharmaceutical Holdin (4581 JP)’s MBO JPY8,620 offer closes on 15 January. Since announcing the offer, the shares have traded above terms for 21 out of the 30 trading days.
• Japan Catalyst has called the offer’s P/B of 0.85x too low. While shares trading above terms does not guarantee that the tender fails, it does increase the risk of failure.
• The offeror has no compelling reason to bump as other activists have not publicly supported Japan Catalyst, the high 55.5% premium to undisturbed price and an achievable minority acceptance rate. 

Shield Therapeutics has appointed Santosh Shanbhag as chief financial officer (CFO) and member of the executive leadership team. Mr. Shanbhag was previously the CFO of Nasdaq-listed Akili, which he helped grow and take public. Before Akili, he held senior finance positions at Vertex Pharmaceuticals, where he worked on business and corporate development and helped secure reimbursement for novel drugs in key international markets. We expect Shield to leverage Mr. Shanbhag’s US healthcare experience, which should support the company in optimising pricing and expand payor coverage for Accrufer.