Healthcare

• AmerisourceBergen managed to exceed analyst expectations in terms of revenue as well as earnings.
• Their successes continue to highlight the worth of their pharmaceutical-centric strategy, which includes critical strategic relationships, specialist leadership, and full global commercialization services.
• OneOncology’s practice management services also complement the company’s existing inventory management, practice analytics, and clinical trial support capabilities.

• On July 12th, MariMed stormed Boston Harbor to protest the unfair tax treatment of US cannabis companies.
• The Boston Tea Party was a protest in 1773 where American colonists dumped British tea into the harbor to protest unfair taxation.
• It fueled the push for independence and played a crucial role in the lead-up to the American Revolution.

• Bangkok Dusit Medical Services (BDMS TB) recorded 4% YoY growth in hospital revenue in 1Q23, driven by higher patient intensity at Center of Excellence (COE) and returning of international patients.
• However, Thai patient revenues decreased 6% YoY due to a decrease of COVID-19 related revenues, in line with improving COVID-19 situation in Thailand.
• BDMS targets to increase its bed capacity to ~9,000 beds in 2027 from 8,400 beds in 2022. BDMS targets revenue CAGR of 6–8% during 2023–2025.

• Takeda Pharmaceutical (4502 JP) announced yesterday that the company has voluntarily withdrawn the US Biologic License Application for dengue vaccine candidate (QDENGA) citing issues over data collection.
• As per Fierce Pharma, the decision to withdraw was due to additional data requested by the FDA which were not captured by Takeda’s Phase 3 TIDES trial.
• Takeda’s share price dropped more than 2.0% during today’s trade, however, we would not be too concerned as efficacy and safety profiles of the trial has already been established.

• InSilico ’s business model is more of AI-CXO + AI-SaaS, but hasn’t reached the stage of AI-biotech, considering its current revenue streams, which may lead to InSilico ultimately changing its positioning.
• The significance of pipeline lies in the need for InSilico to verify the effectiveness of AI platforms/algorithms/technology through successful product launch. However, valuation of InSilico could be different from biotech.
• AI pharmaceutical industry is at its infancy, which is a far cry from current levels of investment and expectations in the sector.We advise investors to be rational about this field.

• BeiGene and Novartis mutually terminate the Option Agreement on ociperlimab. Our interpretation is Novartis may think its clinical data wouldn’t meet expectations, and is therefore unwilling to take the risk.
• Theoretically, BeiGene still has the possibility of creating miracles to turn things around, but based on the current situation, the risk of TIGIT project failure is already very high.
• We suggest that investors can reduce the position of BeiGene in advance or even consider offload entirely (In case its stock price falls due to unsatisfactory clinical data in 23H2).

• Dr Lal PathLabs Ltd (DLPL IN) reported 14% and 16%, YoY, revenue growth from its non-COVID business in 4QFY23 and FY23, respectively.
• The company’s base business is now back to pre-COVID trajectory. Margins are also nearing pre-COVID level. Going ahead, the company has couple of margin levers.
• Due to lesser competitive threat and uncertainty over COVID, FY24 is lesser challenging than the previous year. The company expects higher revenue growth in FY24 than FY23.

• Moderna’s move into China helps ease its current performance difficulties. But China has its own regulations/policies on vaccines. Whether Moderna can successfully adapt/stand out in China remains to be seen.
• The entire vaccine industry in China is expected to undergo significant changes. We listed the companies in this industrial chain that would benefit from the successful signing with Moderna.
• An important signal behind this deal is that while significant differences remain at the top, mutually beneficial business cooperation between China and US will continue, providing investors with additional options/confidence.

Recent months have been eventful for Recce Pharmaceuticals, with the company presenting its Q323 operational update and announcing ethics approval in April 2023 to commence Phase I/II clinical trials in healthy volunteers for the intravenous (IV) formulation of its lead broad-spectrum synthetic polymer anti-infective compound, RECCE 327 (R327), using a more rapid infusion rate. The Phase I part of the study will assess faster infusion rates of R327 in c 16 healthy participants across three cohorts, with the first cohort recently having successfully completed a 2,500mg R327 dose. A Phase II efficacy study in patients with uncomplicated or recurrent urinary tract infections (UTIs) is expected to commence in H2 CY23. While several potential value inflection points may arise in the next 12 months, obtaining financing is likely to be a near-term strategic priority given the current cash at hand (A$4.6m at 28 April 2023). We value Recce at A$535.6m, up from A$497.4m previously.

• Teladoc Health managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• Consolidated revenue grew by 11% year-over-year, exceeding their guidance range, and their consolidated adjusted EBITDA also exceeded expectations.
• We give Teladoc Health a ‘Hold’ rating with a revised target price.

• Kelun-Biotech raised HKD 1,259m (USD 161m) from its global offering and will list on the Hong Kong Stock Exchange on Tuesday, July 10th.
• In our previous note, we looked at the company’s business lines of ADC products. We were of the view that the IPO is fairly priced, at best.
• In this note, we provide an update for the IPO before trading debut.

• Prior to announcement, net cash of Boiron SA (BOI FP) represented 1/3rd of market cap. Most of that cash will now be distributed, conditional on deal success. 
• Although the premium is 36%, at 9.2x EV/Fwd EBIT, the offer seems cheap vs. comparables. The deal is neutral for the Boirons, whom will get a c.€126 million special dividend.
• The offer facilitates the entry of a private equity healthcare specialist. Delisting requires acceptances from 57.6% of the float. Gross spread is +0.4%. Investors may require an offer around €52.

• Moderna Inc (MRNA US) has submitted marketing authorization applications for the investigational RSV vaccine, mRNA-1345, in Europe and Australia and initiated submission process in the U.S.
• Moderna anticipates to launch RSV vaccine in 2024 in US. Each year in US, approximately 60,000–120,000 older adults are hospitalized, and 6,000–10,000 of them die due to RSV infection.
• This year, FDA has already approved two RSV vaccines, Arexvy from GSK and Abrysvo from Pfizer, which are scheduled to be launched in the U.S. by this fall.

• The mechanism of NASH has not yet been accurately determined. Among the major players, FDA has postponed the approval of OCA (FXR) for NASH. THR-β is currently the most promising. 
• HighTide claims that HTD1801 is able to achieve the goal of improving effectiveness and reducing toxicity. However, HTD1801 hasn’t reached pathological endpoints. We’ll have to wait for future clinical data.
• This Company actually has high risk due to cash shortage and uncertain R&D progress, which could lead to lower-than-expected stock price performance. We are conservative about HighTide based on analysis.

• Illumina managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• In Q1, Illumina produced revenue of about $1.09 billion.
• Illumina also unveiled Illumina Complete Long-Read technology and Illumina Connected Insights.

• UnitedHealth Group Incorporated is set to release its second-quarter results on Friday, the 14th.
• However, its Q2 report is tough to call, we warn investors that volatility will likely surface within the coming days.
• UnitedHealth is a surreal earnings beater, but it’s a surreal beater.

• Bumrungrad Hospital Pub Co (BH TB) recorded 48% YoY increase in revenue from hospital operation to THB6 billion in 1Q23, mainly driven by 78% YoY revenue growth from non-Thai patients.
• International patients contributed 55% of total revenue in 1Q23. Middle East and Indochina remained the two most important growth drivers, with YoY revenue growth of 147% and 60%, respectively.
• The company is constructing a 150-bed boutique hospital in Phuket, one of the world’s most coveted island travel destinations, thereby opening immense opportunity for medical tourism.  

• VBP would continue to have an impact on Hansoh’s generic drug business in 2023.Such negative impact would gradually fade from 2024 as big varieties have all been included in VBP.
• The core difference between Hansoh and Hengrui is that someone similar to Zhang Lianshan’s role arrived late, resulting in a slower start and weaker overall framework for innovation drug business.
• Hansoh Pharmaceutical (3692 HK) is still in the process of business transformation. Before the harvest time of innovative drug pipeline comes, Hansoh’s valuation growth would still be a long-term story.

• NHSA released the new NRDL negotiation rules of innovative drugs. Some adjustments will bring certain benefits to innovative drugs, but the overall impact will not be as good as expected. 
• Beijing announced that 16 assisted reproduction technologies will be covered by medical insurance reimbursement from July 1. This policy should benefit companies in the assisted reproduction industry chain.
• We analyzed the key flaws of Kintor Pharmaceutical (9939 HK), and we remain skeptical about this company.

• Eisai Co Ltd (4523 JP) has received FDA traditional approval for Leqembi injection for the treatment of Alzheimer’s Disease. Following the approval, CMS confirmed broader Medicare coverage for Leqembi.
• Leqembi is the first and only approved treatment shown to reduce the rate of disease progression and to slow cognitive and functional decline in adults with Alzheimer’s Disease.
• Eisai pegged peak sales of Leqembi at $7.3 billion in 2030. The projection is based on the company’s estimate that about 2.5M people will be eligible for treatment by 2030.

• In this insight, we take a look at some of the names with high likelihood of being involved in index changes for the Hang Seng Index in September 2023.
• The index changes for the September 2023 rebalance could be announced in mid-August and implemented in early-September.
• Although the index methodology is highly subjective and predicting index changes is extremely tricky, the HSI is an important index in the region and here are our thoughts for September. 

• Genmab A/S (GMAB US) recorded 30% YoY growth in royalty revenue on net sales of Darzalex to DKK1,952 million, representing 68% of total revenue in 1Q23.
• Genmab has guided for 2023 Darzalex royalty revenue of DKK10.4–11.1B, compared to royalty revenue of DKK10.1B in 2022, based on estimated Darzalex 2023 net sales of $9.4 – 10.0B.
• In May 2023, Genmab received FDA approval for Epkinly as the first and only T-cell engaging bispecific antibody for the treatment of relapsed or refractory diffuse large B-cell lymphoma.

• The bottom line from the INM-755 Phase II study’s top-line results.

• InMed published top-line data for its most advanced drug development program, INM-755, a cannabinol (CBN)-based topical skin cream to treat symptoms associated with a rare genetic dermatological condition called epidermolysis bullosa (EB).

• Using a wide lens approach, the Phase II study produced sufficient clinically important chronic itch relief data to support a pathway to further development and potentially bigger commercial opportunities.

Paradigm has announced the completion of patient recruitment for stage one (dose selection) of its pivotal Phase III trial, PARA_OA_002, a multi-centre (US/Australia/UK/EU/Canada), two-stage, adaptive, randomised, double-blind, placebo-controlled study to assess injectable pentosan polysulfate (iPPS) in patients with knee osteoarthritis (kOA) pain. Paradigm has efficiently recruited participants for the trial through various initiatives, such as through its partnership with NFL Alumni Health. Management expects stage one to be complete in Q3 CY23, and for stage two to commence with the most effective dose later in H2 CY23. The selected dose will also be used in the initiation of the separate confirmatory Phase III trial in H2 CY23. These events represent key milestones for Paradigm, in our view.

Oryzon has announced positive aggregate safety data for vafidemstat, which is being evaluated in the ongoing PORTICO trial as a potential treatment for borderline personality disorder (BPD). The independent data monitoring committee (DMC) has reviewed the safety data from the first 167 patients treated in the trial and reported no cases of treatment-related serious adverse events (AEs) or deaths. The DMC has therefore recommended that PORTCIO proceeds without modification until patient enrolment is completed (expected n=188), which is anticipated to be in Q323. We view this as an encouraging update for the clinical development of vafidemstat and believe that the announcement of top-line data, expected in Q124, may represent the next most significant catalyst for the PORTICO trial and for Oryzon’s central nervous system (CNS) portfolio.

OSE Immunotherapeutics has announced that Tedopi, the company’s lead cancer vaccine candidate, has been granted a new patent by the United States Patent and Trademark Office. The patent provides further protection of Tedopi as a potential second-line treatment in non-small cell lung cancer (NSCLC) patients post PD-1/PD-L1 immune checkpoint inhibitor (ICI) failure. We note that Tedopi is already being developed for HLA-A2+ patients with advanced or metastatic NSCLC. OSE is preparing for a follow-on Phase III confirmatory and potentially pivotal trial by end-FY23 or early FY24, and the additional patent protection represents a key milestone in the clinical development of Tedopi, in our view. Additionally, we note that the company already has similar patent approval in Japan, with multiple patent applications pending in other international markets.

Ahead of its H123 results and an anticipated period of increased business activity in the second half of the year, we present a preview of SIGA Technologies, which continues to have strong fundamentals (despite the bearish macro environment) with several potential inflection points on the horizon. The nearest catalysts, in our opinion, are the upcoming TPOXX deliveries to the US strategic national stockpile (which we expect in Q3/Q423) and data readouts from the post-exposure prophylactic (PEP) label expansion trials, anticipated in Q323, positive results from which could materially expand SIGA’s addressable market. With a strong balance sheet and potential incremental income generation for shareholders (via dividends and buybacks), we believe that SIGA has a resilient business case in the biotech space.

• Celltrion Inc (068270 KS) has launched Humira biosimilar Yuflyma in the U.S. market, with a list price of $6,576.50 per month, 5% cheaper than Humira.
• Yuflyma is a citrate-free formulation that is highly concentrated. More than 80% of patients treated with Humira in the U.S. rely on a high-concentration and citrate-free formulation.
• Celltrion has submitted marketing application to the FDA for Eylea biosimilar candidate, CT-P42. The company plans to file for approval for the same in Europe and other countries later.

• COVID-19 didn’t bring Wondfo explosive performance growth because China’s official COVID-19 detection method is nucleic acid test while Wondfo’s strength is antigen detection,which is used in later stage of COVID-19.
• Revenue growth would slow down in 2023 due to the high base last year.2023 is a good time to bottom fish this stock as Wondfo’s performance growth would recover afterwards.
• After continuous corrections, the current valuation is already at a low level, and has already priced in the negative impact of the decline in COVID-19 business and IVD centralized procurement.

• Hologic managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
• The company’s financial results surpassed expectations, driven by robust organic revenue growth in key divisions like Diagnostics, Surgical, and Breast Health excluding COVID-19, driven by new products, market expansion and customer loyalty.
• Hologic’s COVID-19 assay revenue was $233 million, down 47% sequentially, reflecting lower testing demand and increased competition.