Healthcare

• HARMONi-2 results are impressive and the overall data is solid and reliable. The NMPA has approved NDA of ebronucimab and sNDA of cadonilimab. Akeso’s fundamentals have indeed undergone positive changes.
• Akeso’s current market capitalization already partially reflects the positive expectation about the future successful FDA approval of AK112. In our view, the Placing Price is not cheap.
• When the market value falls back to below RMB45 billion is a more comfortable valuation to buy Akeso, and below RMB35 billion market value provides a golden opportunity. 

Basilea Pharmaceutica has reported another US$1.25m milestone payment from its partner Pfizer in Asia-Pacific and China, triggered by Cresemba sales in this region crossing a pre-defined threshold. This is the fourth milestone payment for Cresemba from the region this year, adding to the already strong H2 results (c CHF33m/US$38.5m milestone payments recorded in H224 so far; CHF35m in 2024 to date). The Asia-Pacific region, particularly China (which accounts for c 20% of the market potential for Cresemba), is of key importance to Basilea, as its lead product approaches maturity in the US and European markets (exclusivity until late 2027). Note that Cresemba has recorded in-market sales of US$505m for the 12 months ending 30 June 2024, robust 20% y-o-y growth.

• Shionogi & Co (4507 JP) has reiterated FY25 guidance, indicating sequentially better financial performance in Q2FY25 as well as H2FY25. Overseas business and royalty income are on strong footing.
• Shionogi has acquired the exclusive distribution rights for Quviviq in Japan. With better efficacy and safety profile, and sizable patient population, Quviviq should be a significant revenue contributor.
• Shionogi submitted NDA in Japan for zuranolone, a treatment in development for major depressive disorder (MDD). Approval is expected in H1FY26.

• Leading Chinese biotech firms are among the few sub-sectors sustaining rapid growth. However, RemeGen stands as a negative example, with its business model and investment rationale proving flawed.
• “Increasing revenue without increasing profits” is actually a “denial” of a company’s business model. Even though the losses decreased in 24H1, this doesn’t change our negative expectations for Zai Lab.
• Genor Biopharma and Edding Group are merging through a reverse takeover, benefiting both companies by boosting Genor’s valuation and allowing Edding to achieve its goal of going public.

• The HS HK-Listed Biotech Index (“Hang Seng Biotech Index”) represents the 50 largest biotech companies listed in Hong Kong (HKEX).
• In this insight, we take a look at the final rankings of potential ADDs/DELs and our capping flow expectations for the December 2024 index rebal event.
• We expect two changes for the HSHKBIO index in December 2024. 

• Hisamitsu Pharmaceutical Co (4530 JP) has reported double-digit revenue growth in H1FY25, mainly driven by 17% YoY growth in OTC pharmaceutical product, Salonpas. Net profit grew 8%.
• Rx business revenues grew 5% as Zicthoru, Apohide etc clocked healthy numbers, while Mohrus product line continues to decline. Since Q1FY24, Zicthoru’s quarterly revenue run-rate has been surpassing ¥1B.
• Hisamitsu has reiterated its FY25 guidance of ¥152B revenue, operating profit of ¥14.5B, and net profit of ¥15.8B. With H1FY25 progress rate, the company is expected to beat the guidance.

• Impressive CYB003. Drysdale believes that what has been seen in its Phase 2 work on the development of this modified version of psilocin, the active agent in psilocybin, may have yielded the most impressive data in depression yet from a clinical study.
• Thus, Cybin is approaching with excitement the more rigorous Phase 3 trial, which will involve a total pool of 550 patients with moderate to severe major depression disorder.
• The trial is expected to start in the next few weeks.

• DENTSPLY SIRONA Inc., a major player in the dental solutions and technologies market, reported a mixed second quarter performance for the fiscal year 2024.
• The company faced notable challenges, including a decline in revenue to $984 million, primarily impacted by lower sales in its Connected Technology Solutions (CTS) segment.
• This was attributed to ongoing pressures in the capital equipment market, partially influenced by macroeconomic conditions, pricing degradation, and suboptimal performance in key markets.

• Apellis Pharmaceuticals, a biopharmaceutical company, recently reported its earnings for the second quarter of 2024, presenting the progress and results for the period.
• The management, specifically Chief Executive Officer Dr. Cedric Francois discussed the company’s position with its products SYFOVRE and EMPAVELI, emphasizing SYFOVRE’s leading market position in the treatment of geographic atrophy (GA), despite facing competitive pressures.
• The company expressed optimism about SYFOVRE’s robust performance in the market.

• Fresenius Medical Care, a global leader in dialysis care, presented its second quarter 2024 earnings with a mix of continued strategic progress and facing external challenges.
• During the earnings call, CEO, Helen Giza, outlined the efforts and achievements in line with the company’s transformation and long-term strategic plans.
• The focus was notably on driving better financial performance and moving toward the 2025 group margin targets.

• Medpace, in their second quarter 2024 earnings call, provided a detailed overview of their financial and operational performance.
• The company faced challenges in the quarter, notably with net new business awards entering backlog decreasing by 4.1% year over year to $551 million, influenced by higher cancellations.
• Despite this setback in the backlog, Medpace reported a revenue increase of 14.6% year-over-year, totaling $528.1 million for the quarter.

• Elanco Animal Health Incorporated showed promising performance in its second quarter of 2024, demonstrating consistent operational results and strategic progress in various key areas.
• With a fourth consecutive quarter of underlying revenue growth, the company has displayed resilience and growth in its core segments.
• The adjusted EBITDA and adjusted EPS metrics surpassed the estimates by achieving higher figures than projected in previous guidance, indicating efficient operational and cost management.

• Rigaku Holdings (268A JP) is scheduled to be listed at the Tokyo Stock Exchange on 25 October 2024 at a valuation of ~$1.9bn.
• The company’s modest market capitalization fails fast-entry but easily surpasses the quarterly small cap thresholds of both main global indices.
• Rigaku Holdings (268A JP)  is expected to be added at the May and June 2025 quarterly reviews with the potential greenshoe exercise increasing the passive fund demand upon inclusion.

• Akeso Biopharma Inc (9926 HK) is looking to raise around US$200m from its primary placement. Proceeds from the placement will be used for R&D.
• Past deals in the name haven’t done well recently but the shares have been doing well and the deal size remains small.
• In this note, we talk about the deal dynamics and run the deal through our ECM framework.

• Acasti Pharma is making progress in developing IV nimodipine for acute subarachnoid hemorrhages
• Lead asset GTX-104 is the primary focus of their development efforts
• Successful PIPE offering and enrollment in Phase 3 trial put Acasti Pharma on track for potential FDA approval

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.

• Fortrea’s second quarter 2024 earnings elucidate a blend of progression and challenges in its trajectory as an independent pure-play Clinical Research Organization (CRO).
• Following the spin-off from its parent company, the organization targets both growth from biotechnology firms and expanded engagements with large pharmaceutical companies.
• CEO Tom Pike articulated Fortrea’s leveraging of its robust services across various clinical trial phases and several therapeutic areas to enhance its market position, but also acknowledged uncertainties in contracting with biotech firms that have skewed the company’s book-to-bill ratio below the target of 1.2, marking it at just under 1 this quarter.

• NurExone (OTC-NRXBF) is a preclinical stage biotech company that is developing a breakthrough treatment for spinal cord injuries that has the potential to dramatically improve lives.
• The technology involved also has the potential to more efficiently get other treatments to the needed area.
• The company has conducted preclinical testing that has shown dramatic results and has been awarded an important FDA designation.

• SCLX is filling a much-needed area of the health care sector, that of developing non-opioid pain relief products.
• The company already has commercialized products that are proven to improve patients’ lives.
• The company announced a financing deal that helps to pay off debt and adds cash at good terms.

• Rigaku Holdings (268A JP) is looking to raise up to US$756m in its Japan IPO.
• Rigaku engages in developing, manufacturing, sales and servicing scientific instruments specializing in X-ray technologies.
• In our earlier notes, we looked at the firm’s past performance and discussed our thoughts on valuation. In this note, we look at Rigaku’s valuation at the final indicative range.

• Ligand Pharmaceuticals holds a portfolio of revenue, royalty and milestone generating assets that have been vetted by its internal investment team.
• Ligand considers individual biopharmaceutical products, platforms, companies & income streams in its opportunity set.
• It targets late-stage and commercial income-producing assets when making investments.

OSE Immunotherapeutics has reported its results for H124, a standout period for the company’s development pipeline, with the momentum carrying into H224. The first half of the year rewarded the company with partnerships deals with AbbVie and Boehringer Ingelheim (BI), bringing in c €84m and securing the cash runway into 2027. Furthermore, H224 so far has seen the company make significant progress in advancing its internal pipeline, with successful Phase II results for Lusvertikimab in ulcerative colitis (UC) and, more importantly, the launch of the Phase III registrational trial for lead asset Tedopi in September 2024. We have updated our estimates for the H124 performance and upgraded our probability of success for Tedopi (from 48% to 67%), increasing our valuation of OSE to €465.7m or €21.3/share (from €413.5m or €19.0/share previously).

• TBPH prioritizes shareholder value and is trading at a discount to its NAV
• The company is an attractive investment opportunity for value investors
• TBPH has a strong focus on maximizing shareholder value, valuable assets, and potential 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.

• The review period for the LQ45 Index October rebalance ended 30 September. The changes should be announced the last week of October, becoming effective after the close on 31 October.
• We highlight 4 potential inclusions and 5 potential exclusions for the index at the rebalance. The actual number of changes could be lower at 2-3 a side.
• There are a few stocks that will have over 1x ADV to trade from passive trackers if they are added to or deleted from the index.

• Investors are concerned the Long Stop Date may be extended.But the style of SOEs is rigorous, which means CNPGC has anticipated the potential delays and reserved more time in advance. 
• Although CNPGC can extend Long Stop Date, this indicates CNPGC fails to complete the set work in scheduled time, which is equivalent to admitting its previous work arrangement was “inappropriate”.
• If there’re unexpected circumstances, one possible scenario is privatization would be completed before the Chinese New Year.Because entering 2025, integrating China TCM and Taiji will be the focus of CNPGC.

• Orum Therapeutics is getting ready to complete its IPO in KOSDAQ in November 2024. The IPO price range is from 30,000 won to 36,000 won. 
• The expected market cap after IPO is from 648 billion won to 778 billion won. The book building for the institutional investors starts on 24 October. 
• Orum Therapeutics’ main pipelines include ‘ORM-6151’, a new drug candidate for acute myeloid leukemia, ‘ORM-5029’, a HER2-targeting breast cancer treatment candidate, and ‘ORM-1023’, a small cell carcinoma tumor candidate. 

• Dr Agarwal’s Health Care Ltd (8140044Z IN) is looking to raise about US$480m in its upcoming India IPO. The deal will be run by Jefferies, Kotak, MS and Motilal.
• Dr Agarwal’s Health Care is a healthcare/hospital chain in India providing eyecare services, including surgeries; consultations, diagnoses, non-surgical treatments; and sells opticals, contact lens, accessories and eyecare related pharmaceutical products.
• According to the CRISIL MI&A report, it had a ~25% market share of the total eye care service chain market in India in FY24. 

• Grifols A/B Spread Trade involves the spread between Grifols’ ordinary A shares and Preference B shares
• Grifols and Brookfield announced an exclusive agreement to evaluate a potential acquisition of the entire company
• A/B shares were issued in 2011 as part of an acquisition, allowing Grifols to expand its presence in the biopharmaceutical sector while maintaining voting power for the Grifols family

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.

• Rigaku Holdings (268A JP) listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 25 October.
• At the reported indicative IPO price of JPY 1230/share, Rigaku Holdings (268A JP) will be valued at JPY 277.1bn (US$1.87bn).
• The stock should be added to the TOPIX INDEX on 28 November while inclusion in global indices will take place in February and June next year.

• Rigaku Holdings (268A JP) is Japan’s leading manufacturer of X-ray analysis, measurement, and testing instruments. It is seeking to raise up to US$737 million.
• We previously discussed the IPO in Rigaku Holdings (268A JP) IPO: The Bull Case and Rigaku Holdings (268A JP) IPO: The Bear Case.
• In this note, we discuss valuation. Our analysis suggests that Rigaku is attractively valued at the IPO price compared to peer multiples.

• Medley (4480 JP) is a safe bet for hiding from the negative impact of strengthening yen. The company should benefit from digital healthcare push from the newly elected Prime Minister.
• Although Medley has reported mixed 2Q24 result, with robust topline and declining profitability, the long-term growth potential remains intact. The company guided for 43% YoY revenue growth in 2024.
• Continued shortage of human resource, including doctors and nurses at medical care facilities in Japan and underpenetrated market remain the main growth engines of the company.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Recordati’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Material”, while Disclosure is “Strong”.

Actinogen Medical announced a capital increase of up to A$11.1m on 18 September, consisting of the successful completion of an A$8.1m (gross) share placement to existing shareholders and new institutional investors, along with a A$3.0m shareholder purchase plan (SPP) offer to existing shareholders at the same financial terms as the placement. The company expects that the proceeds (assuming full exercise of the SPP) will extend its operating runway to the completion of top-line results for its XanaMIA Phase IIb/III trial in patients with mild-to-moderate Alzheimer’s disease (AD), expected in mid-CY26. The next major catalyst for Actinogen is the interim results on the first c 100 patients of this study, expected in mid-CY25, which could lead to licensing and/or value realisation opportunities. Our risk-adjusted net present value is A$616.8m (vs A$602.9m previously).

• Rigaku Holdings (268A JP) is looking to raise US$762m in its Japan IPO.
• Rigaku engages in developing, manufacturing, sales and servicing scientific instruments specializing in X-ray technologies.
• In our earlier notes, we looked at the firm’s past performance and peers. In this note, we discuss our thoughts on valuation.

• Investors always have expectations for Chinese CXOs, believing that BIOSECURE Act will not pass and Chinese CXOs will bottom out. We can understand this, but we have to be rational.
• Selling the operations that have been negatively affected is a reasonable choice, which helps stabilize WuXi’s business/market expectations. But this does not necessarily mean the geopolitical conflict will end here.
• Without persuasive long-term logic, share price of Sihuan would still underperform. Despite strong performance of Chinese stocks, we advise investors to do short-term trading on Sihuan Pharmaceutical Hldgs (460 HK).

• IHH Healthcare (IHH MK) remains consistent in delivering double-digit growth across key metrics. 2Q24 revenue increased 17%, while EBITDA grew at a faster pace of 22%.
• Singapore, Turkiye & Europe, India, Malaysia show strength with favorable patient mix, higher occupancy, and higher revenue per in-patient.
• IHH is on track to add ~4,000 beds (+33% capacity) by 2028. The company is acquiring Island Hospital, a 600-bed hospital in Penang.

• Avantor recently reported its second-quarter results for the fiscal year 2024.
• This call provided detailed insights into the company’s earnings and strategic developments.
• Financial performance showed a reported revenue of $1.7 billion with an organic decline of 2%, indicating a sequential improvement in key metrics, reflecting stable conditions in the lab segment and increased demand in the production sphere.

• The second quarter 2024 financial results for Penumbra, Inc. reveal a combination of strengths and challenges that frame the investment outlook for the company.
• In Q2 2024, Penumbra reported revenues of $299.4 million, reflecting a 14.5% increase year-over-year, driven particularly by robust performance in the U.S. thrombectomy market, which saw a growth of 25% compared to the same period in the previous year.
• This growth was predominantly fueled by strong demand for the company’s CAVT products in both venous thromboembolism (VTE) and arterial sectors.

• Sigma Healthcare (SIG AU) has offered a court-enforceable undertaking to alleviate preliminary anti-competition concerns raised by ACCC in relation to its proposed merger with CWG.
• Sigma will let its franchisees who entered their franchising arrangements prior to January 1, 2024 to terminate their franchise agreements with Sigma without any penalty, for the next three years.
• The company will also limit the usage of confidential information from its wholesale customers and franchisees for the next three years. Final decision of ACCC is expected on November 7.

Immix Biopharma’s US-based NEXICART-2 trial continues to make steady progress through the clinic, with the company reporting that the trial has advanced to the dose expansion level of 450m cells, after completing the 150m cell cohort. The Phase Ib/II trial is assessing Immix’s lead CAR-T asset NXC-201 as a first-in-class outpatient treatment for relapsed/ refractory amyloid light chain amyloidosis (r/r ALA). We highlight that both chosen doses in NEXICART-2 trial had elicited complete responses in the prior NEXICART-1 trial, which was based in Israel. We view the latest update as an encouraging sign that the current clinical trial is progressing as anticipated and we believe that the initial data readout, expected within Q424, could represent a near-term catalyst for investor attention.