Healthcare

Samsung Biologics (207940 KS) is expected to report strong Q4 results, with double-digit revenue growth. Partial operation of Plant 4 will impact profitability, which will be continued through H12023.
The Chairman of the company has been selling shares, causing recent pullback in the stock, which should be considered as an attractive entry point.
The long-term growth story remains intact, with all eyes being on upcoming conference where the company may unfold its capex plan amid stellar order book and industry demand.

Hong Kong CEO & Director Dealings (8 Jan): Tian An, Differ Group, Pharmaron, Joinn Lab, Gushengtang

By David Blennerhassett

The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
Stocks mentioned include Tian An China Investment (28 HK), Differ Group Auto (6878 HK), Pharmaron Beijing Co Ltd-H (3759 HK), Joinn Laboratories (H) (6127 HK), and Gushengtang (2273 HK).

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Jan 06

Daily Brief Health Care: HDmall, Hygeia Healthcare Group, Universal Vision Biotechnology and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

HD, the Airbnb for Surgeries in SEA, Secures US$6M Funding
Hygeia Healthcare Placement (6078.HK)- The Prospect Is More Certain After the Policy Risk Is Removed
Universal Vision Biotechnology (3218 TT): Not Suffering from Myopia; Clear Long-Term Growth Prospect

HD, the Airbnb for Surgeries in SEA, Secures US$6M Funding

By e27

HD will use the funding to expand its team and develop its technology, enabling over 5,000 healthcare providers and thousands of surgeries by 2024.
HD, a Bangkok-headquartered startup operating the healthcare and surgery marketplace HDmall in Thailand and Indonesia, has received US$6 million in new funding.
HD is an online marketplace that powers over 1,500 healthcare providers, including hospitals. It connects patients to hospitals, clinics, operating rooms, and surgeons.

Hygeia Healthcare Placement (6078.HK)- The Prospect Is More Certain After the Policy Risk Is Removed

The government has changed its tone and started to encourage social capital to run hospitals, indicating that the previous concerns about the policy risk on Hygeia has been relieved.
At this stage, Hygeia has more investment value, greater expansion space and higher market demand than Aier Eye Hospital. Meanwhile, the Company performs better in trans provincial expansion than Topchoice.
Due to large investment/“heavy asset” model, Hygeia would continue to face capital pressure. Its expansion pace may not be as fast as expected if it hopes to control expansion quality.

Universal Vision Biotechnology (3218 TT): Not Suffering from Myopia; Clear Long-Term Growth Prospect

Universal Vision Biotechnology (3218 TT) recorded revenue growth of 34% YoY to TWD2.5B during nine month ended Sept’22, driven by increasing number of refractive and cataract surgeries performed in Taiwan.
With 12M addressable patient population and just 0.16% penetration, refractive treatment market in Taiwan has favorable trend. With ~50% market share, the company is well-positioned to grab the opportunity.
This year, the company has renovated two existing centers and added four new centers. UVB is targeting 50 Universal Eye Centers by 2025 from 28 now.

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Jan 05

Daily Brief Health Care: Acotec Scientific Holdings, Jinxin Fertility Co Ltd, Zoetis Inc, Dexcom Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Acotec (6669 HK): Boston Scientific’s Partial Offer Open For Tendering
Jinxin Fertility Group Placement – Weak Track Record And Recent Deals Have Performed Poorly
Zoetis Inc.: Initiation of Coverage – The Jurox Acquisition & Key Drivers
DexCom Inc.: Initiation of Coverage – Business Strategy & Key Drivers
Zoetis Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report

Acotec (6669 HK): Boston Scientific’s Partial Offer Open For Tendering

By David Blennerhassett

On the 12 December, Acotec Scientific (6669 HK) announced a HK$20/share partial Offer from Boston Scientific, a 31.6% premium to last close, but below August 2021’s IPO price of HK$23.80/share.
Boston Scientific will acquire at least 156.7mn shares (50.01%), up to 203.7mn (65%). Irrevocables total 60.14%, comprising shares held by CA Medtech/CPE Investment, Jing Li (chairman, CEO), and Bliss Way.
The Composite Doc is now out and the Offer is open for acceptances. This Offer is done. The key question is the final proration.

Jinxin Fertility Group Placement – Weak Track Record And Recent Deals Have Performed Poorly

By Ethan Aw

Jinxin Fertility Co Ltd (1951 HK) is looking to raise US$122m via a top-up placement.
Proceeds from the offering will be used to repay its outstanding convertible bond and general corporate purposes.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

Zoetis Inc.: Initiation of Coverage – The Jurox Acquisition & Key Drivers

This is our first report on animal health pharma major, Zoetis.
Despite the world’s volatile external environment and economic unpredictability, Zoetis has performed well from a financial standpoint given to its varied durable portfolio and global reach.
It delivered a 5% operating revenue increase in Q3, which reflected a decent yet below-par performance across its range of innovation-driven companion animal products, particularly in its overseas markets.

DexCom Inc.: Initiation of Coverage – Business Strategy & Key Drivers

This is our first report on medical device major, DexCom.
Although DexCom anticipates that these primary care connections will be crucial to its long-term consumer goals, they also enable the company to serve the nation’s extensive insulin users.
In addition, DexCom carried out its previously disclosed accelerated share repurchase program, buying roughly 550 million outstanding shares.

Zoetis Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report

Zoetis Inc is a well-known animal health pharma company.
Besides, their pet care products are increasingly helping to fuel growth in some of their biggest markets, like China and Australia.
The management also expects a high global demand for novel goods, particularly in companion animal parasiticides, dermatology, vaccines, diagnostics, and monoclonal antibodies for pain.

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Jan 04

Daily Brief Health Care: Acotec Scientific Holdings, Peptidream Inc, Jiangsu Hengrui Medicine, BNC Korea and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Now Open
(Mostly) Asia M&A 2022 Roundup: Bigtincan, St Barbara/Genesis, Acotec, Conexio, ENEOS, Nidec OKK
Peptidream (4587 JP): Rising Drug Discovery Collaborations To Drive Growth; New Revenue Stream Added
Jiangsu Hengrui Medicine (600276.CH) – About The Performance Recovery and the Concerns Behind
BNC Korea (256840 KS): Base Business Faces Regulatory Headwind; Delay in COVID Drugs Approval

Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Now Open

By Arun George

Acotec Scientific Holdings (6669 HK)’s partial offer from Boston Scientific (BSX US) at HK$20 per share is now open. The IFA opines it to be fair and reasonable.
The partial offer is conditional on the offeror hitting 50.01% voting rights. Irrevocables ensure that it will be declared unconditional on or before the first closing date (26 January).
Based on a minimum proration of 71.31% and at the current share price of HK$17.20 per share, the estimated breakeven price is HK$10.38 per share.

(Mostly) Asia M&A 2022 Roundup: Bigtincan, St Barbara/Genesis, Acotec, Conexio, ENEOS, Nidec OKK

By David Blennerhassett

For the month of December, 10 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6bn.
The average premium for the new deals announced (or first discussed) in December was ~46%, giving an average for 2022 of 41%.
This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.

Peptidream (4587 JP): Rising Drug Discovery Collaborations To Drive Growth; New Revenue Stream Added

Peptidream Inc (4587 JP) aspires to be a world leader in drug discovery and development to address unmet medical needs by leveraging on proprietary PDPS technology, a peptide discovery platform.
Driven by expanding research collaboration programs and progressing pipelines, Peptidream guided for revenue of ¥13–15B from drug discovery and development business in 2022, up from ¥9.4B in 2021.
Foray into Radiopharma adds a regular revenue stream. Peptidream expects the business to report revenue of ~¥11.5B and remain marginally profitable for 2022.

Jiangsu Hengrui Medicine (600276.CH) – About The Performance Recovery and the Concerns Behind

There could be some catalyst for Hengrui, such as the NRDL negotiation in early January 2023, the slowing down of the negative impact of VBP and the increasing outpatient volume.
Hengrui’s performance low point was in 2022, and it would gradually recover after that. If investors want to invest in Hengrui, 2023 is a good time to take action.
However, Hengrui could be hard to return to its peak. Without the next PD-1 level blockbuster product, it would be difficult for Hengrui to achieve complete performance reversal.

BNC Korea (256840 KS): Base Business Faces Regulatory Headwind; Delay in COVID Drugs Approval

BNC Korea (256840 KS) has been found guilty for the violation of the Pharmaceutical Affairs Act. Consequently, production of its Bienox injection has temporarily been halted till May 30, 2023.
The company’s in-licensed COVID-19 drug candidate could not secure emergency use approval from the FDA, which has asked for further clinical trial demonstrating efficacy and safety.
BNC Korea is not a bottom fishing idea, due to lack of any strong growth engine in near-term. Despite attractive valuation, we still like to avoid the stock.

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Jan 03

Daily Brief Health Care: Viatris and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Viatris Inc: Initiation of Coverage – Recent Acquisitions & Other Drivers
Viatris Inc: Detailed Credit Analysis & Financial Strength Evaluation Report

Viatris Inc: Initiation of Coverage – Recent Acquisitions & Other Drivers

This is our first report on global healthcare giant, Viatris.
The company had an interesting set of developments which included a strategic agreement to sell off their biosimilars business to Biocon Biologics.
Due to the Famy Life Sciences acquisition, five more front-of-the-eye programs in diverse indications that are in Phase III or are ready for Phase III will be added.

Viatris Inc: Detailed Credit Analysis & Financial Strength Evaluation Report

Viatris is a well-known global healthcare major with operations spread across North America, Europe, China, and other markets.
The company’s financial performance has been in recovery mode and has been impacted by numerous industry headwinds, especially inflationary pressures.
It had an interesting set of developments which included a strategic agreement to sell off their biosimilars business to Biocon Biologics.

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Jan 01

Daily Brief Health Care: Clinuvel Pharmaceuticals and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Clinuvel Pharmaceuticals (CUV AU): Strong Start of FY23; Pipeline Progress Enhances Conviction

Clinuvel Pharmaceuticals (CUV AU): Strong Start of FY23; Pipeline Progress Enhances Conviction

Clinuvel Pharmaceuticals (CUV AU) is recording consistent profitable revenue growth backed by Scenesse. 2023 will be marked by several clinical trial progress and data readouts from the company.
The first readouts of the DNA repair program on xeroderma pigmentosum patients treated with afamelanotide are expected to be available early in the new year.
Clinuvel has started FY23 on a strong note, with Q1 recording highest ever customer receipts. Current cash balance of A$138 million represents sufficient funding for nearly eight quarters.

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Dec 30

Daily Brief Health Care: Sinopharm Group Co Ltd H, Cigna Corp, Exact Sciences and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Sinopharm Group (1099 HK): Industry Tailwind and China Reopening To Drive Growth
Cigna Corporation: Initiation of Coverage – Business Strategy & Key Drivers
Exact Sciences Corporation: Initiation of Coverage – Business Strategy & Key Drivers
Exact Sciences Corporation: Detailed Credit Analysis & Financial Strength Evaluation Report

Sinopharm Group (1099 HK): Industry Tailwind and China Reopening To Drive Growth

Sinopharm Group Co Ltd H (1099 HK) remains a beneficiary of both VBP and China reopening. Consensus expects double-digit revenue and earnings growth for the company in 2023 and 2024.
SinoPharm’s acquisition of VBP varieties constantly stood in the leading position in the industry. Through June 2022, China carried out seven batches of VBP, with 294 categories being included.
With China gradually re-opening, SinoPharm should record accelerated growth in its pharma distribution business. With subsiding COVID-19 cases in Q3, SinoPharm reported 10% YoY and 8% QoQ revenue growth.

Cigna Corporation: Initiation of Coverage – Business Strategy & Key Drivers

This is our first report on Cigna Corporation, a leading player in health services and insurance.
Evernorth delivered strong top-and bottom-line results because of their innovation and affordability across pharmacy benefit services, specialty pharmacies, and Evernorth Care Solutions.
This collaboration with Centene builds on Express Scripts’ reputation as a reliable partner and will eventually offer expansion options to offer more Evernorth Health services.

Exact Sciences Corporation: Initiation of Coverage – Business Strategy & Key Drivers

This is our first report on Exact Sciences, a leading cancer diagnostics company.
It has created a robust engine that will enable them to realize their goal of assisting in the eradication of cancer.
Besides, Exact Sciences can support new cancer tests with a small incremental investment due to their well-known test, smart patient navigation, electronic ordering and resultant platform, extensive lab capabilities, and strong payer partnerships.

Exact Sciences Corporation: Detailed Credit Analysis & Financial Strength Evaluation Report

Exact Sciences is one of the leading cancer diagnostics companies across the globe.
The company has a resilient business model and a unique platform that it has created to engage patients and medical professionals.
Exact Sciences can support new cancer tests with a small incremental investment due to their well-known test, smart patient navigation, electronic ordering and resultant platform, extensive lab capabilities, and strong payer partnerships.

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Dec 29

Daily Brief Health Care: Sawai Group Holdings, Jinxin Fertility Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Sawai Group Holdings (4887 JP): Continued Price Erosion Is Weakening Earnings Prowess
Jinxin Fertility Co Ltd (1951.HK) – Hard to Achieve Performance Reversal in 2023

Sawai Group Holdings (4887 JP): Continued Price Erosion Is Weakening Earnings Prowess

Sawai Group Holdings (4887 JP) is negatively impacted by drug reimbursement pricing in Japan. H1FY23 revenue, operating profit, net profit decreased 1%, 36% y/y, and 29%, y/y, respectively.
Generic pharmaceutical companies are more affected by the drug price revisions than their branded counterparts. In addition, APIs are impacted by increases in the cost of oil and exchange rates.
The sustainability of the U.S. business rebound is still uncertain. We want to watch Sawai from sidelines and wait for full-year FY23 results, FY24 guidance, and NHI pricing decision.

Jinxin Fertility Co Ltd (1951.HK) – Hard to Achieve Performance Reversal in 2023

We have seen some positive policies released in China to support assisted reproduction. However, domestic policy support is more of a short-term catalyst and would not fundamentally change Jinxin’s prospects.
The number of assisted reproductive centers in China is close to supply-demand equilibrium. It’s hard to support Jinxin’s valuation expansion by relying on China market. The breakthrough point is internationalization.
Jinxin’s 2023 performance wouldn’t rebound largely. Investors could do short-term trade based on positive news/policy related to ARS in China.There’s no signal to support the complete reversal of share price.

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Dec 28

Daily Brief Health Care: Ono Pharmaceutical, Beauty Farm Medical and Health Industry, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Ono Pharmaceutical (4528 JP): Key Drugs On High Growth Trajectory; Pipeline Expands Beyond Opdivo
Pre-IPO Beauty Farm Medical and Health Industry – Hard to Make Money Due to Industry Characteristics
Isn’t FSA Too Forward-Thinking to Keep up with the Global Trend in Human Capital Disclosure?

Ono Pharmaceutical (4528 JP): Key Drugs On High Growth Trajectory; Pipeline Expands Beyond Opdivo

Ono Pharmaceutical (4528 JP) is an innovation driven pharmaceutical company, with major focus on oncology. Opdivo, Forxiga, and Orencia are the top three products, together contributing ~75% of product revenue.
While the competition intensified, use of Opdivo for malignant tumors was expanded to first-line treatment for NSCLC, esophageal cancer, and gastric cancer, resulting in FY22 sales of ¥112.4B (+14% y/y).
Ono’s second largest drug Forxiga is also on a double-digit growth path. The company has been expanding its pipeline beyond Opdivo by reinforcement of in-house research and in-licensing activities.

Pre-IPO Beauty Farm Medical and Health Industry – Hard to Make Money Due to Industry Characteristics

Beauty Farm Medical and Health Industry (BFM HK)’s solid growth has indicated that its business model works. But the industry tightening regulation and potential policy risk are our concerns.
As a downstream company in this industry, we are conservative about Beauty Farm’s profitability. Its profit space could be limited. The Company has weak bargaining power in the whole industrial chain.
Beauty Farm’s performance could continue to be under pressure due to weak recovery of domestic demand after three years of the pandemic, especially those non-rigid consumption demand.

Isn’t FSA Too Forward-Thinking to Keep up with the Global Trend in Human Capital Disclosure?

By Aki Matsumoto

The government’s application of human capital disclosure starting with FY3/2023 companies runs the risk of omitting process of fully discussing and internalizing concept of human capital with company’s management strategy.
The government’s policy change to make disclosure of quarterly financial results voluntary in exchange for mandatory disclosure of human capital will likely lead to a setback in information disclosure.
Various issues will likely emerge in the future: whether the 3 indicators mandated for disclosure correctly reflect the company’s human capital approach and whether they can be compared among companies.

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Dec 27

Daily Brief Health Care: Sichuan Kelun Pharmaceutical, Mckesson Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Merck Puts Eye-Popping $9.3B in ADC Deal with Kelun – The “New Story” Is About to Begin
McKesson Corporation: Initiation of Coverage – Business Strategy & Recent Developments
McKesson Corporation: Initiation of Coverage – Business Strategy & Recent Developments

Merck Puts Eye-Popping $9.3B in ADC Deal with Kelun – The “New Story” Is About to Begin

Merck entered into an agreement with Kelun to develop seven new ADC candidates. Merck will pay an upfront payment of US$175 million, with milestone payments worth up to US$9.3 billion.
It’s a strong signal that Merck gives up acquiring Seagen and fully embraces Kelun. Merck may not just simply recognize Kelun’s ADC candidates but is optimistic about its ADC platform/technology.
Chinese pharmaceutical enterprises are becoming more pragmatic and peaceful in licensing cooperation, which has more trend significance for the development of industry than the value of a product or an enterprise.

McKesson Corporation: Initiation of Coverage – Business Strategy & Recent Developments

McKesson is one of the leading U.S. healthcare distributors and operates in an oligopolistic market along with rivals, Cardinal Health and AmerisourceBergen.
The company has continued its efforts towards improving its competitive edge in cancer and biopharma services through internal investment and acquisition.
The Medical-Surgical business has achieved market-leading positions in the primary and extended care markets through years of deliberate investment and expansion.

McKesson Corporation: Initiation of Coverage – Business Strategy & Recent Developments