Healthcare

• LianBio (LIAN US)‘s new drug application for its lead asset mavacamten is under priority review in China for the treatment of symptomatic obstructive hypertrophic cardiomyopathy, with approval expected in mid-2024.  
• The company is expected to start commercialize mavacamten in Singapore and Macau this year. As of June 30, 2023, LianBio has cash balance of $267M, with runway into H1 2025.
• LianBio is currently conducting phase 3 trial to evaluate the efficacy and safety of TP-03 in Chinese adult patients with Demodex blepharitis. Topline data is expected in 4Q23.

• For the month of August 2023, 11 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$29bn.
• The average premium for the new deals announced (or first discussed) in August was 25%. The average YTD is 34%.
• This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

“The brain is a complex organ, and also the least understood,” Pang Sze Yunn, co-founder and CEO of Singapore-based healthtech platform Neurowyzr, told Tech in Asia. 

According to Pang, early brain decline can take between 20 and 40 years before obvious conditions such as dementia, mental health diseases, or stroke occur.

“By then, therapies have little impact,” she added. “Traditional brain tests are inefficient, expensive and inaccessible.”

• IDEXX Laboratories surpassed Wall Street’s revenue and earnings expectations, showcasing strong growth and financial performance.
• The company achieved a 10% organic increase in overall revenues, driven by remarkable growth in CAG Diagnostics’ recurring payments.
• IDEXX’s solid performance was particularly evident in the significant placements of premium instruments, sustained new business gains, and strong growth in recurring veterinary software revenues.

• Illumina managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• Illumina exceeded its expectations, with approximately $1.18 billion in revenue and diluted non-GAAP EPS of $0.32.
• In the quarter, the company sold 109 NovaSeq X instruments, and their team plans to offer more than 390 instruments over the entire year.

• DTx industry is still in the early stages of development. The establishment of a matching operation/service system is a very difficult task. There is a long distance from mature commercialization. 
• BrainAurora’s sales scale is small because its products haven’t received widespread recognition from medical system in China. Internationalization is challenging because it requires cross-border transfer of personal or scientific data.
• BrainAurora’s business prospects is still unclear.As the attitude of capital market towards DTx has become more rational, investors have begun to doubt if this field could really bring good return.

• Novo Nordisk A/S had a disappointing quarter with below-par revenues and earnings just about on par with market expectations.
• In addition to investing in the medium- and long-term development of the obesity market, Novo Nordisk also established an appealing and aggressive pipeline.
• However, Novo Nordisk can still provide operating profit growth of 32% and first-half profits per share growth of 44%.

• Agilent Technologies delivered an all-around beat in the most recent quarterly result, with revenue of $1.67 billion, higher than the team had anticipated.
• The pharma market in China is down 30%, which is the main reason for their overall pharma business decline.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Boryung Pharmaceutical (003850 KS) reported strong 2Q23 result, with revenue increasing 19% YoY to a record high of KRW216 billion, driven by 24% YoY growth in prescription drugs.
• H1 2023 revenue and net profit progressed 52% and 62% of the annual target, respectively, marking the fastest semi-annual lap ever to annual target.
• Boryung has reiterated guidance for 2023 revenue and operating profit of KRW810 billion and KRW61 billion, representing growth of 12% and 1%, YoY, respectively.

• IQVIA Holdings delivered a strong result and managed an all-around beat last quarter.
• The company continues to thrive within a healthy demand environment for the industry, underpinning its optimistic long-term outlook.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

AFT Pharmaceuticals has reported that the Auckland High Court has cleared it of the contractual breach claim filed by PBL Solutions in April 2020, which maintained that the opportunity for Pascomer (a topical formulation of rapamycin) was not under the scope of AFT Orphan Pharmaceuticals’ (AFTO’s) business in its legal case. While the ruling dismissed PBL’s claim for a lump sum payment for the assessed present value of Pascomer’s potential, the legal authority has directed AFT to share 35% of the potential (future) profits, which may arise in orphan indications in as well as outside Asia-Pacific. We note that AFT is pursuing Pascomer in non-orphan indications such as port-wine stains and is in the very early stages of development, hence the ruling does not have a near- to medium-term impact on AFT. Our valuation at NZ$644m, or NZ$6.14 per share, and estimates for AFT are unchanged.

• Malo Medical Management (MMM HK) (MMM) is looking to raise around US$100m (estimated) in its upcoming Hong Kong IPO. The deal will be run by Haitong.
• MMM is a dental service provider in China. It ranked ninth among all private dental service providers and second among all premium dental service providers, as per F&S.
• MMM provides dental services to patients through a widespread network of Malo Clinic-branded specialty dental clinics. As of Apr 2023, it owned 29 dental clinics in 13 cities in China.

Leveraging the expanded scope of operations from its recent acquisition of Access Managed Services (AMS), Respiri has announced the signing of new remote patient monitoring (RPM) contracts with VDO Cardiology and Angelic Health Partners, along with an extended contract with Minnesota Lung Center (existing client) for a sponsored remote therapeutic monitoring (RTM) pilot study in patients with obstructive sleep apnea (OSA). These contracts will add a total of 600 patients to Respiri’s customer base, with a potential A$900k in annual revenues. The new contracts bode well for the company’s break even target of 9,000 patients by H2 CY24 and re-emphasise the contribution of the AMS deal in achieving this. They also broaden Respiri’s addressable RPM market beyond respiratory to cardiovascular, diabetes, asthma, obesity and sleep apnea-related treatments. As advanced discussions are underway with other healthcare organisations and payors according to management, we see incremental revenue expansion opportunities in the near term. We plan to revisit our assumptions post the AMS acquisition; therefore, we have placed our estimates and valuation under review.

• The September rebalance of the HSI, HSCEI and HSTECH indices will use today’s closing prices to cap the index constituent weights at 8%. This will lead to large flows.
• The largest passive inflows will be on East Buy (1797 HK), JD.com (9618 HK), Ping An (2318 HK), Sinopharm (1099 HK), BYD (1211 HK), Lenovo (992 HK) and Trip.com (9961).
• The largest passive outflows will be on Alibaba (9988 HK), Li Auto (2015 HK), Meituan (3690 HK), AAC Technologies (2018 HK), Kuaishou (1024 HK), COGARD (2007) and CG Services (6098).

• PolyNovo Ltd (PNV AU) reported record high sales of A$66.5M, up 59% YoY during FY23, mainly driven by strong momentum in the U.S. RoW sales increased 134% YoY to A$14M.
• However, net underlying loss widened to A$2.3M in FY23 from A$2.0M in FY22 due to a 50% YoY increase in operating expenses due to increasing headcount and R&D investment.
• In FY23, the U.S. customer accounts increased to 299 hospitals from 189 hospitals in FY22. PolyNovo continued geography expansion and entered Hong Kong, India, and Canada markets.

• IHH Healthcare (IHH MK) will acquire remaining stake in Indian hospital chain operator Ravindranath GE Medical Associates for RM415M. The transaction is expected to close by 4Q23.
• IHH is acquiring Bedrock Healthcare for RM245M. Bedrock operates 82-bed hospital in the Malaysian state of Sarawak and has earmarked a vacant land for the construction of a 200-bed hospital.
• In 1Q23, IHH reported highest ever quarterly revenue of RM5.1B, representing 24% YoY growth on higher patient volume across key markets. Net income nearly triples to RM1.4B.

• Merck delivered an all-around beat in the quarter, making excellent strides in advancing compelling science that will contribute to meeting the world’s most critical unmet medical needs.
• Concerning their research organization, Merck’s encouraging late-stage pipeline keeps proving beneficial for patients with a wide spectrum of ailments.
• In oncology, Merck highlighted information from ASCO’s extensive pipeline, including evidence for KEYTRUDA in lung cancer that is in an earlier stage.

• In 23H1, Tigermed’s net profit attributable to shareholders has changed from a negative growth trend in 2022. However, net profit growth brought by its main CRO business was not impressive.
• With the reform of domestic new drug approval policies, domestic CRO demand would decrease. Since Tigermed mainly provides early-stage CRO services, it’s more susceptible to negative changes of financing environment.
• Tigermed’s performance growth would slow down in 2023. Although valuation is in the bottom range, we recommend investors to take profits in time for any rebound in the stock price.

• 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 – 111 Inc (YI US), Costa Group Holdings (CGC AU), Eoflow (294090 KS), ENM Holdings (128 HK), Symbio Holdings (SYM AU), Mason Group Holdings (273 HK), JSR.
• Lowest spreads – Healius (HLS AU), Toyo Construction (1890 JP), Celltrion Healthcare (091990 KS), T&K Toka Co Ltd (4636 JP), Yaizu Suisankagaku Industry (2812 JP), Sanei Architecture Planning (3228 JP). 

• The market is clearly satisfied with WuXi Bio’s interim results. Growth of both non-COVID revenue and new projects were beyond expectations. This makes us look forward to 2023 full-year result.
• There’s a significant strength gap between WuXi Bio and Lonza/Samsung Biologics in undertaking commercial-stage orders, which puts WuXi Bio at a disadvantage in competition,making it more vulnerable to financing environment.
• It’s not impossible to restore the high growth before COVID,but WuXi Bio needs to meet two conditions.Instead of betting on a V-shaped reversal, it’s wiser to take profits in time.

• On Friday after the close, SBI Holdings (8473 JP) – which currently owns 24.63% of Medical Data Vision (3902 JP) – announced it would buy another 2,043,200 shares.
• This market purchase would lift them to just under 30% by year-end.
• There have been similar trades done by others in the past and they were worth looking at.

• Telix Pharmaceuticals (TLX AU) reported 1H23 revenue of A$221M, a nine-fold increase on 1H22, reflecting continued growth in sales of its prostate cancer imaging agent, Illuccix.
• Gross margin improved to 64% in 1H23 from 56% in 1H22. Telix has transitioned to positive earnings on an adjusted EBITDAR basis. Net loss decreased 80% YoY to A$14M.
• With the increasing adoption in global PSMA PET imaging market, Illuccix has positive outlook. Telix is expected to launch two new products in 2024 for brain and kidney cancer imaging.

• I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Three new deals this week: SK Rent A Car (068400 KS)‘s Tender Offer; Sime Darby (SIME MK)‘s Offer for UMW (UMWH MK); KLK‘s Offer for Boustead Plantations (BPLANT MK).
• Key updates took place for Golden Eagle Retail (3308 HK), JSR Corp (4185 JP), E Guardian Inc (6050 JP), Eoflow (294090 KS), and Oishi Group PCL (OISHI TB).

• On 24 August, Lunit announced a rights offering capital increase of 202 billion won. 
• Lunit’s current share price is 155,700 won and its market cap is 1.9 trillion won. The expected rights offering price is 30% discount to current price.
• We have a positive view of Lunit and its rights offering. Lunit is one of the leading companies in Korea that specializes in AI-based cancer diagnosis and treatment solutions.

• Anti-Corruption campaign has affected healthcare companies’ IPO. It’s crucial for companies to explain the compliance of selling expenses in IPO approval process. Investors need to be aware of potential risks.
• Roche posts interim TIGIT OS data after “inadvertent disclosure”, which seems to give investors a glimmer of hope. But for now, we remain cautious about TIGIT based on our analysis.
• We updated our views on Neusoft Xikang. We still hold a conservative view towards whether Xikang can successfully IPO this time, mainly due to some negative factors and gloomy outlook.

• Zimmer Biomet Holdings delivered a strong result and managed an all-around beat last quarter.
• The company reported increased GAAP diluted earnings per share due to higher revenues and effective cost management.
• Moreover, the company’s strong operating cash flows and solid balance sheet position provide the strategic flexibility needed for future growth initiatives.

• Humana Inc. delivered a solid result and managed an all-around beat in the last quarter, with adjusted earnings per share meeting expectations and positive results from all lines of business, supported by the growth in Medicare Advantage utilization.
• The company has reaffirmed its full-year guidance, reflecting a significant increase in adjusted EPS over the previous year.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Exact Sciences Corporation exceeded Wall Street’s revenue and earnings expectations.
• Revenue increased in the second quarter.
• Exact Sciences continues to see widespread Cologuard acceptance and traction among health systems.

• Incyte Corporation delivered an all-around beat in the previous quarter.
• With patient demand for all indications rising, net product revenues for the quarter increased.
• The quarter also saw a rise in US patient demand, as total prescriptions grew over the previous quarter, and refills increased.

• Opthea Ltd (OPT AU) is seeking to raise A$80M ($51M) through a combination of private placement and accelerated non-renounceable entitlement offer. The proceeds will fund the clinical development of OPT-302.
• The proceeds of the offer, pending funds from the earlier agreements, along with existing cash balance, are expected to fund the company’s operation through Q3 2024.
• OPT-302 is in two phase 3 trials, which are expected to be fully enrolled by 1H24. In phase 2 trial, OPT-302 has demonstrated superior visual acuity over standard of care.

• BioMarin Pharmaceutical delivered an all-around beat in the most recent quarterly result.
• In the quarter, revenues showed 13% year-over-year growth and 16% growth, excluding KUVAN.
• BioMarin is on track to meet its 2023 goals of double-digit revenue growth and considerable operating leverage with Q2 total revenues of $595 million, including $113 million in Voxzogo revenues.

Immix has announced that the FDA has granted orphan drug designation (ODD) to CAR-T asset NXC-201 for multiple myeloma (MM). The benefits of ODD include seven years of US market exclusivity post approval, tax credits for qualified clinical trials and exemption from the Prescription Drug User Fee. ODD is issued to drugs/biologics intended for the safe and effective treatment, diagnosis or prevention of rare diseases/conditions that affect fewer than 200k people in the US. With NXC-201, Immix aims to differentiate against currently approved CAR-T therapies that are often associated with neurotoxicity and high-grade cytokine release syndrome (CRS). NXC-201 data appears to provide a competitive safety profile with no serious adverse events reported to date, positioning it as potentially the first outpatient CAR-T therapy. We believe the ODD marks a key milestone and believe that the next readout (expected in September 2023) from the ongoing NEXICART-1 trial could be an important catalyst for the company.

• This is a special, one-time report on Thorne HealthTech which presents itself as a captivating short-term investment prospect, particularly in light of the recent reports of its speculated sale.
• Despite Thorne’s stock price exhibiting volatility and relatively stagnant appreciation over the past year, its potential sale could act as a catalyst for change.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Wuxi Biologics (2269 HK) recorded 8% YoY revenue growth to RMB8.5B in 1H23. Strong momentum continued in the base business, with the non-COVID revenue achieving a 60% YoY growth.  
• Ramping up of new manufacturing facilities, maintenance shutdown of existing facilities, slowdown in funding environment in China, and increasing expenses have negatively impacted the profitability.
• Total number of integrated projects reached a new record of 621 with 46 integrated projects added to the pipeline. As of June 30, backlog increased 9% YoY to $20.1B.

• Mirxes, a Singapore-headquartered RNA technology company with a focus on cancer screening, plans to raise up to US$100m via a Hong Kong listing.
• In this insight, we examine its key product, GASTROClear’s technical and clinical data. We also look at the competitive landscape.
• We are of the view that the company’s product, despite improving the accuracy over incumbent competitors marginally, is not a killer product and will face challenges in ramping up sales.

• Pfizer managed to surpass the revenue and earnings expectations of analysts.
• Operationally, non-COVID-19 revenue increased, but total revenue decreased in the quarter.
• The projected revenue declines in both PAXLOVID and COMIRNATY principally brought on this loss.

• This is a special one-time report on NextGen Healthcare (NASDAQ:NXGN) given the prevailing reports of the company exploring a sale.
• Amidst prevailing economic uncertainties, the healthcare sector is shining brightly as a hub of merger and acquisition (M&A) activities.
• NextGen Healthcare is at the heart of these discussions, given the recent flurry in its stock price, propelled by whispers of potential strategic shifts, including a possible sale.

• Vertex Pharmaceuticals delivered a solid result and managed an all-around beat last quarter.
• The company’s continued momentum in all aspects, particularly in the Cystic Fibrosis (CF) business, has led to solid growth in global product revenue.
• Vertex has strategically invested in promising therapies for severe sickle cell disease, transfusion-dependent beta-thalassemia, acute pain relief, and CF treatments.

• On the 8th of August, Insulet Corp (PODD US) filed a lawsuit accusing Eoflow (294090 KS) of the misappropriation of trade secrets, patent infringement, and trademark dilution.
• The filing was pretty heavy on accusations. EOFlow declined ~11% on the news.
• Undeterred, Medtronic (MDT US) continues to preach all is peachy, suggesting the EOFlow merger is a go, and Medtronic will deal with the lawsuit, as and when.

• Eoflow (294090 KS) shares were up 4.4% on the back of Medtronic Plc (MDT US)’s earnings call comment that it expects the acquisition to close at the end of 2023.
• The bear view is that Medtronic’s messaging remained unchanged as it is still assessing Insulet Corp (PODD US) lawsuit and the potential impact on the timing and/or pricing.
• The bull view is that Medtronic’s comment underscores its commitment to close the transaction. It’s tough to take a call on risk/reward profile – at best it’s a brave buy. 

• HCG’s cancer segment reported decent revenue growth of 14% YoY in Q1FY24. EBITDA margin came in weaker than expected due to a few transient adverse factors.
• HCG is hitting all the right notes to drive growth. It is beefing up clinical talent to attract patients. It is also making strategic tuck-in acquisitions to expand its presence.  
• As cancer treatment is becoming more advanced, the mix of immunotherapy and hi-tech treatment is growing, helping the realization and the profitability to improve.

• Bangkok Dusit Medical Services (BDMS TB) recorded 10% YoY growth in revenue from hospital operations in 2Q23, driven by 22% YoY from international patients, which contributed 26% of revenue.
• Thai patient revenues increased 7% YoY, despite COVID-19 related revenue decreased sharply from year-ago quarter.
• EBITDA margin declined 70 basis points YoY to 22.6% due to lower occupancy rate and economies of scales from a decline in number of COVID-19 patients.

• RemeGen’s 23H1 results were unsatisfactory. We also have concerns about its future sales performance. The core reason behind is the disorganized pipeline layout, leading to inefficient sales system/high cost.
• RemeGen’s core technologies are mostly in-licensed from third parties. At first, RemeGen just hoped to develop drugs/build pipeline through these technologies, without considering the potential challenges of commercialization ahead.
• The anti-corruption campaign could negatively affected RemeGen’s 23H2 performance. The Company could fail to meet management’s guidance for 2023. We lowered our valuation of RemeGen to RMB12 billion-18 billion.

Recce recently reported the completion of its data review from its earlier long-infusion Phase I study of the intravenous (IV) RECCE 327 (R327) formulation, confirming that the drug candidate shows favourable safety characteristics, a robust dose-dependent pharmacokinetic drug concentration response, as well as evidence of increased drug concentration into the urinary tract. The company is proceeding with a Phase I/II study assessing using a more rapid infusion rate, with recent completion of the first 2,500mg cohort of the Phase I part ahead of schedule. Obtaining financing is a near-term strategic priority given the cash at hand (A$1.6m at 30 June 2023), and the company’s current cash runway is short (into late Q3 CY23). Recce has signalled that it is seeking to raise A$12–15m. After rolling forward our estimates and updating forex assumptions, we obtain an rNPV valuation of A$562.4m (or A$3.15 per share), up from A$535.6m previously.

• There is a certain connection between Sunho and Genscript. So, Sunho has a typical style of “CXO switching to biotech” – That is to do whatever is popular.
• For core products, IAP0971 and IAE0972 just completed phase I trials, still with high R&D failure risks. IAH0968 is difficult to become a blockbuster variety due to strong competing products.
• As investors’re already rational about investing in unprofitable Biotech. The companies without commercialized products and with uncertain outlook may not be favored by the market. Therefore, high valuation is unreasonable.