Category

Healthcare

Jan 19
0

Daily Brief Health Care: Sosei Group and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Sosei Group (4565 JP): Partners’ Pipeline Progress Reflects Power of Drug Discovery Platform

Sosei Group (4565 JP): Partners’ Pipeline Progress Reflects Power of Drug Discovery Platform

By Tina Banerjee

  • Sosei Group (4565 JP) is currently eligible for total milestone payment of more than $9.5B for its existing collaborations. During 9MFY23, Sosei reported revenue growth of 141% YoY to ¥8.6B.
  • Pfizer Inc (PFE US) has dosed first subject in phase 2 clinical trial of type 2 diabetes drug candidate PF-07081532. Achievement of this milestone triggers a $10M payment to Sosei.
  • Sosei has four programs in preclinical studies and 10+ in discovery phase, which are still unpartnered. The company has a cash runway into 2025 to fund its drug discovery activities.

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Jan 18
0

Daily Brief Health Care: Amvis Holdings Inc, Wuxi Biologics and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Amvis Holdings Inc (7071 JP): Scale Expansion to Drive Revenue Growth; Formulated New 3-Year Plan
  • Wuxi Biologics Placement (2269 HK) – Things Are No Longer Easy When the Magic of CXO Wears Off

Amvis Holdings Inc (7071 JP): Scale Expansion to Drive Revenue Growth; Formulated New 3-Year Plan

By Tina Banerjee

  • Amvis Holdings Inc (7071 JP) recorded 51% YoY revenue growth to ¥22B in FY22, 3% ahead of guidance. The company has added 16 facilities (825 beds), exceeding its initial plan.
  • Buoyed by strong FY22 results, business expansion, and favorable demand scenario, Amvis has raised FY23 guidance. In FY23, the company aims to open 19 new facilities.   
  • Amvis has formulated the new three-year plan, “Amvis 2025”. The company is accelerating the pace of opening Ishinkan to bring up the number to 127 by September 30, 2025.  

Wuxi Biologics Placement (2269 HK) – Things Are No Longer Easy When the Magic of CXO Wears Off

By Xinyao (Criss) Wang

  • WuXi Bio announced the placing of existing shares by substantial shareholder. Obviously, the share price was in  “comfortable position” for the management, so they think it’s time to take action.
  • WuXi Bio faces the uncertainty of future high growth.GSK deal/AD drug orders cannot offset the loss of COVID-19 orders.We advised to invest when it’s in “sector resonance” with “difference in expectations”.
  • What we’re most worried about this year isn’t recession/depression but Taiwan, which is the last card the US hasn’t yet played. If situation’s really bad,something may happen in Taiwan Strait.

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Jan 17
0

Daily Brief Health Care: Wuxi Biologics, Osstem Implant, Aier Eye Hospital Group and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Wuxi Biologics Placement – Lesser Discount than Recent Deals but Still Looks Good
  • Osstem Implant: Potential M&A Fight Between KCGI And Founder Choi
  • Aier Eye Hospital Group (300015.CH) – The Truth Behind the Mirage

Wuxi Biologics Placement – Lesser Discount than Recent Deals but Still Looks Good

By Ethan Aw

  • Wuxi Biologics Holdings is looking to raise up to US$513m by selling about 1.3% of Wuxi Biologics (2269 HK). 
  • This is the company’s 16th placement since it listed in June 2017. 
  • In this note, we will discuss deal dynamics, past deal performance, and share the scores on our ECM framework.

Osstem Implant: Potential M&A Fight Between KCGI And Founder Choi

By Douglas Kim

  • The case involving KCGI (a local corporate activist private equity fund) and Osstem Implant (048260 KS) is one of the more interesting situations rising in the Korea’s M&A/corporate activism markets. 
  • Osstem Implant is the number one dental implant company in Korea/Asia and the fourth largest player in this segment globally. 
  • We believe Osstem Implant could outperform the market in 2023 due to improving fundamentals, cheap valuations, and a potential M&A fight between KCGI and Chairman Choi.

Aier Eye Hospital Group (300015.CH) – The Truth Behind the Mirage

By Xinyao (Criss) Wang

  • Aier launched new hospital acquisition plan. Obviously, Aier hopes to maintain high growth through M&A funds. However, considering its national market layout,Aier is in the final stages of aggressive M&As.
  • Based on our data, Aier’s endogenous growth is actually very weak. Once external M&As fail to drive high growth, Aier’s overall performance growth would decline significantly. Aier is grossly overvalued.
  • We expect decreasing birth rate after COVID-19. Due to the fundamental changes in the population structure, the valuation system of all assets would be destroyed – The long logic doesn’t exist.

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Jan 16
0

Daily Brief Health Care: Natera Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Weekly Liquidity Risk Short Candidates: Natera, Silk Road Med, Floor & Decor Hldgs

Weekly Liquidity Risk Short Candidates: Natera, Silk Road Med, Floor & Decor Hldgs

By Eric Fernandez, CFA

  • Liquidity shorts can be great short candidates.  The key characteristic is that the company may not be viable, economically, given their cash flows and cash requirements. 
  • Liquidity shorts have built-in catalysts, have moderate to higher betas,  and can have strong down moves if a crisis develops.  They can go bankrupt, pushing the stock price near zero.
  • Today we are flagging Natera, Silk Road Med, Floor & Decor Hldgs

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Jan 15
0

Daily Brief Health Care: Hisamitsu Pharmaceutical Co, Hangzhou Tigermed Consulting (H), Align Technology and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Hisamitsu Pharmaceutical (4530 JP): Strong Q3 Result Driven by Salonpas; FY23 Guidance Reiterated
  • China Healthcare Weekly (Jan.13)- Tigermed, HBM, Brii, Jacobio, Dental Implant, Successful Investors
  • Align Technology – Very Well Positioned when Demand Returns

Hisamitsu Pharmaceutical (4530 JP): Strong Q3 Result Driven by Salonpas; FY23 Guidance Reiterated

By Tina Banerjee

  • Hisamitsu Pharmaceutical Co (4530 JP) has announced solid Q3FY23 results, with double-digit revenue growth and triple-digit operating and net profit growth, mainly driven by the OTC business of the company.
  • With the resumption of sporting/outdoor events globally and increasing unwillingness to use opioid for pain relief especially in the U.S., Salonpas is expected to continue its growth trajectory.
  • Hisamitsu has reiterated FY23 guidance. However, considering the current progress rate of all the parameters versus guidance, we think actual performance of Hisamitsu will exceed guidance.

China Healthcare Weekly (Jan.13)- Tigermed, HBM, Brii, Jacobio, Dental Implant, Successful Investors

By Xinyao (Criss) Wang

Align Technology – Very Well Positioned when Demand Returns

By Pyari Menon

  • Economic slowdown, China lockdown and more competition has hit Align Technology (ALGN US) share performance. Quantity and quality of innovations suggests a solid moat that should help a comeback.
  • ALGN has dominant leadership in digital design and mass custom manufacture of clear aligner orthodontics. A return of demand should lead to strong upside. 
  • Dentistry has seen significant new technologies we list the top fifteen innovators in the sector. Align is primarily in the narrow business of straightening teeth, but dominates the space.

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Jan 14
0

Daily Brief Health Care: Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Transitional Measures Will End in 2-3 Years, but Will Prime Market Listing Criteria Remain the Same?

Transitional Measures Will End in 2-3 Years, but Will Prime Market Listing Criteria Remain the Same?

By Aki Matsumoto

  • TSE will probably settle on a compromise: “transitional measures will be completed as soon as possible,” while “measures to minimize negative impacts will also be adopted.
  • Of 271 companies that failed to meet prime market listing criteria and are allowed to list under transitional measures, 227 (98%) don’t have tradable market capitalization of 10 billion yen.
  • The market capitalization of companies that disclosed plans to meet listing criteria within 3 years increased, while those that stated that they would meet criteria in over 3 years decreased.

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Jan 13
0

Daily Brief Health Care: Lu Daopei Medical Group, Lepu Medical Technology A and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Lu DaoPei Medical Group Pre-IPO Tearsheet
  • Lepu Medical Technology (300003.CH) – New Development Mode Changes the Valuation Logic

Lu DaoPei Medical Group Pre-IPO Tearsheet

By Clarence Chu

  • Lu Daopei Medical Group (1816743D CH) Lu DaoPei Medical Group is looking to raise around US$400m in its upcoming Hong Kong IPO. The bookrunners are CITIC Securities, CMB International, and Macquarie.
  • Lu DaoPei Medical Group (LDPM) is a hospital operator focusing on hematology healthcare services.
  • As per F&S, the firm was the largest hematology healthcare services provider in China in terms of 2021 revenue.

Lepu Medical Technology (300003.CH) – New Development Mode Changes the Valuation Logic

By Xinyao (Criss) Wang

  • After China reopens and demand for COVID-19 testing drops sharply, Lepu has lost the big driving force of performance growth. The 2022 full year performance may not be optimistic.
  • Lepu Medical Technology A (300003 CH) has begun to focus more on capital operation. As a holding platform, the valuable assets are spun off, which changes the valuation logic.
  • Even if Lepu could finally digest the negative impact of centralized procurement, such development mode would still put pressure/uncertainties on its future performance, leading to lower-than-expected financial results.

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Jan 12
0

Daily Brief Health Care: Zai Lab Ltd, Angelalign Technology, Classys, Edwards Lifesciences and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Zai LAB (ZLAB.US/9688.HK)：TTF Is Not a Done Deal, Both China and Globally
  • Angelalign Technology (6699.HK) – About the Share Price Rebound, the Outlook and the Challenges
  • Classys (214150 KS): Will Continue To Remain On a Consistent Growth Path Through New Launches
  • Edwards Lifesciences Corporation: Initiation of Coverage – Recent Approvals & Other Drivers

Zai LAB (ZLAB.US/9688.HK)：TTF Is Not a Done Deal, Both China and Globally

By Shawn Yang

  • ZaiLab and NovoCure (NVCR US, NR) surged on positive readout of Optune’s Phase III on Non-Small-Cell-Lung Cancer (NSCLC), a major indication win after the smaller ones in Glioblastoma and Mesothelioma.
  • We, however, caution that the readout is largely expected and Optune faces uncertainty in commercialization both globally and in China;
  • We raise TP to US$35 to reflect possible readouts in other cancer types

Angelalign Technology (6699.HK) – About the Share Price Rebound, the Outlook and the Challenges

By Xinyao (Criss) Wang

  • The rebound of Angelalign’s share price isn’t based on the reversal of its fundamentals,but increasing confidence in China’s economic recovery. Investors could take the opportunity to trade during this time.
  • It’s “a helpless move” for Angelalign to participate in centralized procurement. The price change brought about by centralized procurement would weaken the brand advantage of leading manufacturers and change consumers’  preferences.
  • We are not optimistic about Angelalign’s 2022 performance. Its performance in 2023 could still be lower-than-expected after China reopens. When COVID-19 is no longer an excuse, true color reveals. 

Classys (214150 KS): Will Continue To Remain On a Consistent Growth Path Through New Launches

By Tina Banerjee

  • Classys (214150 KS) has started selling Volnewmer from the end of October 2022. With a safe and comfortable treatment experience, Volnewmer will become another strong growth engine.
  • The ratio of consumables sales to total sales is gradually increasing from 33% in Q1 2022 and 37% in Q2 2022 to 46% in Q3 2022, leading to improved profitability.
  • Classys recorded 30%+ revenue growth and margin improvement in Q3, with the cumulative sales in Q3 of this year exceeded 2021 annual sales, which was already the largest.

Edwards Lifesciences Corporation: Initiation of Coverage – Recent Approvals & Other Drivers

By Baptista Research

  • This is our first report on Edwards Lifesciences, a market leading manufacturer of heart valve systems and repair products.
  • The last quarter was highly disappointing as Edwards failed to meet Wall Street expectations in terms of revenues as well as earnings.
  • Besides, their market-leading SAPIEN 3 Ultra transcatheter aortic heart valve combines Edwards’ ground-breaking RESILIA technology.

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Jan 10
0

Daily Brief Health Care: Eisai Co Ltd, Modern Dental Group and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Eisai Co (4523 JP): Alzheimer’s Drug Gets FDA Approval; Focus Is Now on the Path Forward
  • Modern Dental Group (3600.HK)- 2023 Harsh Reality Is Hard to Avoid, but Short-Term Rally Is Possible

Eisai Co (4523 JP): Alzheimer’s Drug Gets FDA Approval; Focus Is Now on the Path Forward

By Tina Banerjee

  • Eisai Co Ltd (4523 JP) received speedy regulatory nod for Alzheimer’s drug LEQEMBI. Treatment with LEQEMBI should be initiated in patients with mild cognitive impairment or dementia stage of disease.
  • LEQEMBI will be available during or before the week of January 23, 2023. Eisai decided to price LEQEMBI at WAC of $26,500 per year to promote broader patient access.
  • Eisai has submitted a supplemental Biologics License Application to the FDA supporting the conversion of the Accelerated Approval of LEQEMBI to a traditional approval.

Modern Dental Group (3600.HK)- 2023 Harsh Reality Is Hard to Avoid, but Short-Term Rally Is Possible

By Xinyao (Criss) Wang

  • Modern Dental Group (MDG) disclosed selected unaudited operational data for 22Q1-Q3. The negative trend on performance would continue to 22Q4. The overall 2022 performance of MDG would show a negative growth.
  • We may face a situation where both domestic and external demand would weaken in 2023. MDG’s overseas revenue is expected to see a bigger YoY decline than domestic revenue.
  • There would be strong expectations but weak realities in 2023Q1-Q2, during which MDG’s share price could rally in short term, but it’s not based on the improvement of its fundamentals.

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Jan 09
0

Daily Brief Health Care: Shanghai Junshi Bioscience Co. Ltd. and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Shanghai Junshi Bioscience (1877.HK/688180.CH)- Junshi Has Changed Its Story from Tumor to COVID-19?

Shanghai Junshi Bioscience (1877.HK/688180.CH)- Junshi Has Changed Its Story from Tumor to COVID-19?

By Xinyao (Criss) Wang

  • Junshi once generated sales and profits in scale, but lost money again. Its story suddenly changed from cancer drugs to COVID-19. We have lost sight of its development direction.
  • Junshi’s commercialization history has lost its reference value for confirming the outlook. The calculation of peak sales doesn’t make much sense, because they cannot help Junshi turn losses into profits.
  • The current market value still has too much “bubble”, and COVID-19 drug is a major “interference” to the valuation. We analyzed our thoughts on future valuation by excluding COVID-19 projects.  

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