Healthcare

Dr. Reddy’s Laboratories (DRRD IN) reported Q1FY23 results, with revenue growing 6% and 108% y/y, mainly driven by a 26% y/y growth in India business.
Despite price erosion and increasing competition in some of the key products, North America revenue grew 2% y/y, driven by launch of new products and favorable forex rates.
Bottom line got benefitted from one-off items including settlement income and non-core brand divestment proceeds. Net profit surged 108% y/y.

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Sep 08

Daily Brief Health Care: Global Health (Medanta), PureTech Health and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Global Health Pre-IPO – Stiff Competition Makes Growth Look Mediocre
PureTech Health (PRTC LN): Continued Value Unlocking; Multiple Catalysts Are Pushing Up Stock Price

Global Health Pre-IPO – Stiff Competition Makes Growth Look Mediocre

By Ethan Aw

Global Health (Medanta) (GH IN) is looking to raise approximately US$270m in its upcoming India IPO.
Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development.
The company has managed to remain profitable throughout COVID-19 and even experienced margin expansion in FY22. However, its post-COVID growth might be short-lived given stiff competition amongst peers.

PureTech Health (PRTC LN): Continued Value Unlocking; Multiple Catalysts Are Pushing Up Stock Price

PureTech Health (PRTC LN) has raised approximately $115.4 million through partial offloading of stake in Karuna Therapeutics Inc (KRTX US). PureTech will continue to hold 3.5% of Karuna’s outstanding shares.
Following the transactions, PureTech has updated guidance to extend its operational runway to Q1 2026 from prior cash runway guidance into Q1 2025.
Karuna plans to submit a new drug application for KarXT in schizophrenia with the FDA in mid-2023. As a co-inventor of KarXT, PureTech has the right to receive royalty.

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Sep 07

Daily Brief Health Care: Osstem Implant, SK Bioscience, YSB Inc, Sirnaomics and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Explaining the Unusual Flow Situation of Osstem Implant
SK Bioscience (302440 KS): Murky Outlook On Weak Vaccine Demand And Flooding Supply
YSB Inc Pre-IPO – The Positives – Evolving Business Model Coupled with Growth.
Sirnaomics (2257.HK)-Unverified Technology and Uncertainties Can Lead to Big Swings in Share Price

Explaining the Unusual Flow Situation of Osstem Implant

By Sanghyun Park

From August 26 to September 2, the net buying of investors classified as “Other Corporation” was substantial at 500K shares or 3.5% of SO, which amounted to about ₩60B.
It seems almost sure that the KCGI has made a move. As a result, the possibility that the Hanjin Kal event will be repeated is also relatively high.
The first inflection point would be when the KCGI passes the 5% stake and makes a regulatory filing. We will see a pretty intense momentum trading on proxy battle expectations.

SK Bioscience (302440 KS): Murky Outlook On Weak Vaccine Demand And Flooding Supply

SK Bioscience (302440 KS) received approval for Korea’s first locally-developed COVID-19 vaccine, SKYCovione. The company is seeking European approval and plans to apply for emergency use listing to the WHO.
The company is a late entrant in the overcrowded domestic vaccine market. Currently, six vaccines are approved for use in South Korea. Moreover, demand outlook is uncertain beyond 2022.
Recently, the company has dropped a multinational phase 3 trial of P2-VP8, trivalent rotavirus vaccine. Among the non-COVID pipeline, P2-VP8 was in the most advanced stage of clinical trial.

YSB Inc Pre-IPO – The Positives – Evolving Business Model Coupled with Growth.

By Clarence Chu

YSB Inc (YSB HK) is looking to raise about US$500m in its upcoming Hong Kong IPO.
YSB Inc. (YSB) operates a pharmaceutical platform, digitizing the pharmaceutical transaction and service segment.
Throughout its history, YSB has been evolving its business model and has been growing its user base rapidly as well, thereby leading to GMV growth and in turn, sales growth.

Sirnaomics (2257.HK)-Unverified Technology and Uncertainties Can Lead to Big Swings in Share Price

The current two mainstream delivery platforms such as LNP delivery platform and GalNAc RNAi platform have been verified and recognized, with products using these platforms successfully launched on the market.
Sirnaomics has developed its own differentiated delivery platforms, but the druggability has never been verified in trials, like a blind box. They will not be valuable until they are proven.
Sirnaomics has cashflow pressure and is uncertain if it can survive “this winter”. It’s also difficult for Sirnaomics to find suitable valuation anchor in HKEX. Share price may fluctuate largely.

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Sep 06

Daily Brief Health Care: Zydus Lifesciences Ltd, Kintor Pharmaceutical, Thermo Fisher Scientific Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Zydus Lifesciences Ltd (ZYDUSLIF IN): Q1FY23 Results Review- Showing Early Sign of Improvement in US
Kintor Pharmaceutical (9939.HK) Placement – The Hidden Risks and the True Colors
Thermo Fisher Scientific: New Product Launches & Other Drivers

Zydus Lifesciences Ltd (ZYDUSLIF IN): Q1FY23 Results Review- Showing Early Sign of Improvement in US

Zydus Lifesciences Ltd (ZYDUSLIF IN) reported stable Q1FY23 results, with its U.S. business witnessing healthy rebound supported by volume share gain in base portfolio and new product launches.
Excluding COVID-related products, generics portfolio, and divested products, India branded prescription business grew 9% y/y. India consumer wellness business rebounded with 18% y/y revenue growth.
Zydus aims to grow across all our key businesses in FY23. Through cost control and improved efficiencies across the value chain, Zydus aspires to achieve 20%+ EBITDA margin for FY23.

Kintor Pharmaceutical (9939.HK) Placement – The Hidden Risks and the True Colors

Over the past year, we’ve seen the stock price of Kintor fluctuate largely, which was mainly driven by its COVID-19 drug proxalutamide. However, we are not optimistic about its outlook.
There are big concerns about the credibility of management. The suspicion caused by mistrust leads us to suggest that investors directly enter the “show me the result” mode.
Shares plunged after the announcement of the Placing. Obviously, Kintor Pharmaceutical (9939 HK) is short of money. Considering the potential risks behind, we are bearish on Kintor.

Thermo Fisher Scientific: New Product Launches & Other Drivers

Thermo Fisher had a good quarter and delivered an all-around beat as a result of the fact that its core business has been robust.
Excellent growth has been viewed over every business, highlighted by its pharma services and bioproduction businesses.
We provide the stock of Thermo Fisher with a ‘Hold’ rating with a revision in the target price.

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Sep 05

Daily Brief Health Care: Polaris Group, Beijing Tongrentang Co A and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Polaris Group (6550 TT): An Attractive Bet With Differentiated Approach To Cancer Therapy
Beijing Tongrentang (600085.CH)- Neither Brand Nor Angong Niuhuang Pills Can Secure Future Prospects

Polaris Group (6550 TT): An Attractive Bet With Differentiated Approach To Cancer Therapy

Polaris Group (6550 TT) is developing novel anti-cancer therapies, with its lead drug candidate, Pegargiminase (ADI‑PEG 20) in late-stage clinical development for a wide range of cancers.
The various cancers targeted by Pegargiminase combination therapy have combined annual new cases of more than 19 million. The treatment market size is estimated to reach $20 billion in 2025.
Polaris aims to get at least two biologics license applications (BLA) approvals by 2025. With cash balance of NT$7.7 billion, the company is well-resourced to fund its ongoing clinical activities.

Beijing Tongrentang (600085.CH)- Neither Brand Nor Angong Niuhuang Pills Can Secure Future Prospects

2018 was a watershed for Tongrentang. After the incident of using expired honey was exposed and the corruption scandal afterwards, Tongrentang’s performance declined significantly and didn’t recover until 2021.
Angong Niuhuang Pill is the major performance driver and also Tongrentang’s core product. Due to the economic downturn, the price increase of Angong Niuhuang Pills could lead to inventory overstocking.
The high growth in 2021 may not be sustained. We lowered our forecast for 2022. Without core competitiveness and high moat, we are conservative about Tongrentang’s long-term outlook.

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Sep 02

Daily Brief Health Care: Burning Rock Biotech, Beijing Continent Pharmaceuticals, Abbvie Inc, Medici Vietnam and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Burning Rock Biotech (BNR US): Despite Q2 Results Missing Consensus Management Reiterated Guidance
Pre-IPO Beijing Continent Pharmaceuticals – The Orphan Drug Pioneer Needs to Expand Overseas
AbbVie Inc: Agreement With Cugene & Other Developments
Jungle Ventures Leads Vietnamese Insurtech Startup Medici’s Series A Round

Burning Rock Biotech (BNR US): Despite Q2 Results Missing Consensus Management Reiterated Guidance

Burning Rock Biotech (BNR US) has announced Q2 results. Despite the negative impact from COVID-related restrictions in China, revenue increased 3% y/y to RMB130.8 million, driven by pharma R&D service.
Gross margin deteriorated due to unfavorable revenue mix and inventory write down. Even upon this, operating expenses grew 19%, thereby widening net loss to RMB262.1 million.
Encouraged by ongoing business volume recovery, management has reiterated full-year 2022 revenue guidance of approximately RMB620 million, indicating H2 2022 revenue of RMB354 million, which represents 29% y/y growth.

Pre-IPO Beijing Continent Pharmaceuticals – The Orphan Drug Pioneer Needs to Expand Overseas

With favorable policies and improved intellectual property protection, investors’ attitude towards rare diseases in China has changed significantly and become more interested in this field.
Since no new candidates would be commercialized until 2024, Beijing Continent Pharmaceuticals (CPH HK) could face increasing competition and financial pressure. The breakthrough point is to develop overseas markets.
In terms of valuation, Continent is better than CANbridge Pharmaceuticals (1228 HK), so it is expected to have higher valuation than CANbridge after listing.

AbbVie Inc: Agreement With Cugene & Other Developments

AbbVie has witnessed a strong correction over the past few months and its results have also not been the best.
The company’s revenues in the last result were below market expectations though it did deliver an earnings beat.
The silver lining for AbbVie has been the strong growth in double-digit operational sales from immunology, where Skyrizi exceeded the expectation of the company with its impressive market share gains in both PSA and psoriasis.

Jungle Ventures Leads Vietnamese Insurtech Startup Medici’s Series A Round

By e27

Iinsurance startup Medici claims it has hit double-digit m-o-m growth and has 35+ branches across almost 40 provinces.
Vietnamese healthtech and insurance startup Medici has received an undisclosed sum in a Series A round led by existing backer Jungle Ventures.
The company will use the money to improve its technology infrastructure to capture the tremendous growth opportunity of Vietnam’s insurance and healthcare market.

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Aug 31

Daily Brief Health Care: Hangzhou Tigermed Consulting (A), Boston Scientific, Gilead Sciences, Oneness Biotech, Teladoc Health, Inc. and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Hangzhou Tigermed Consulting (3347.HK/300347.CH) 2022H1 – The Time Bomb Is Ticking
Boston Scientific: Major Drivers
Gilead Sciences: The MiroBio Acquisition & Other Drivers
Oneness Biotech (4743 TT): Positive Clinical Trial Progress Is Pushing Stock Prices to Higher Highs
Teladoc Inc: Major Drivers

Hangzhou Tigermed Consulting (3347.HK/300347.CH) 2022H1 – The Time Bomb Is Ticking

Tigermed had high revenue growth in 2022H1 but with a YoY decrease in net profit attributable to the owners of the Company, mainly due to poor performance of investment business.
Tigermed’s investment business is like a “time bomb” that would detonate in the future. Its “CRO+PE/VC business model” would trap its performance in a vicious circle due to unfriendly macro.
We are conservative about Tigermed’s outlook and performance. Tigermed is difficult to achieve the V-shaped rebound. So we recommend investors to offload, or just do some short term trade.

Boston Scientific: Major Drivers

Boston Scientific’s innovation portfolio, commercial execution, clinical data, and strategic tuck-in M&A supported its solid second-quarter results where the company delivered an all-around beat.
Furthermore, their Diagnostics business performed well during the quarter because of the Preventice portfolio and implantable cardiac LUX-Dx.
Despite the macroeconomic difficulties Boston continues to be well-positioned for a decent 2022 ahead given their category leadership strategy, commercial execution, and robust portfolio.

Gilead Sciences: The MiroBio Acquisition & Other Drivers

Gilead had a very robust second quarter with total product sales of $5.7 billion, up 7% year over year, excluding Veklury.
The company managed to deliver an all-around beat powered by HIV, cell therapy, and Trodelvy, partially offset by HCV.
Sequentially, total product sales excluding Veklury increased by 14%, driven by seasonal pricing and inventory dynamics, especially in their HIV business, and increased demand across the whole portfolio.

Oneness Biotech (4743 TT): Positive Clinical Trial Progress Is Pushing Stock Prices to Higher Highs

Oneness Biotech (4743 TT) is showing steady progress in its R&D pipeline. The company submitted IND application to FDA for phase 1 trial of SNS812 for the treatment of COVID-19.
SNS812 is a first-in-class broad-spectrum siRNA-based new drug against SARS-CoV-2 variants covering 99.8% of current variants and shown picomolar inhibition of dominant ones, including Alpha, Delta, Gamma, Epsilon, and Omicron.
The health authorities in Singapore, Malaysia, the Philippines, and Vietnam have accepted the NDA application of Fespixon, which has been commercialized in Taiwan last year for diabetes foot ulcer.

Teladoc Inc: Major Drivers

Teladoc delivered a mixed result and managed to surpass Wall Street expectations on the revenue front but its losses were more than market expectations.
The management continues its efforts towards creating solutions that change how customers engage with the healthcare system.
This growth builds on the company’s current relationship in chronic care and will give plan members access to a wide range of integrated primary and chronic care options.

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Aug 30

Daily Brief Health Care: Resapp Health, Merck & Co Inc., Amgen Inc, Assertio Holdings, Eli Lilly & Co and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

ResApp’s Scheme Meeting on 7 September Still Faces Headcount Test Risk
Merck Inc.: Keytruda & Other Drivers
Amgen Inc: The ChemoCentryx Acquisition & Other Drivers
ASRT: Convertible Offering Pauses Momentum
Eli Lilly & Co: Acquisition-Led Growth & Other Drivers

ResApp’s Scheme Meeting on 7 September Still Faces Headcount Test Risk

By Arun George

Resapp Health (RAP AU)’s scheme meeting date has been set for 7 September. Pfizer Inc (PFE US)’s A$0.208 per share is its best and final offer.
The Board hoped that the threat of a discounted equity raise and Pfizer’s final offer would sway the retail shareholders’ NO vote camp. However, there remains a vocal NO camp.
The headcount test remains a key risk. The upside (9.5% spread to the offer) vs downside (likely equity raise at a huge discount) is an unfavourable risk/reward profile.

Merck Inc.: Keytruda & Other Drivers

Merck continues to perform pretty well in the last quarter and delivered another all-around beat while continuing to bid on long-term growth.
During the quarter, it achieved robust bottom and top-line growth and has made some additional vital clinical advancements in its pipelines.
The animal health business of Merck also delivered strong performances as sales increased, driven by growth in both companion animal products and livestock.

Amgen Inc: The ChemoCentryx Acquisition & Other Drivers

Amgen delivered strong volume-driven growth in the last quarter which resulted in the company managing an all-around beat.
Many of the innovative products of the company performed quite well, namely Evenity, Prolia, Otezia, and Repatha, all of which delivered sales growth of double-digits.
Across general medicine, oncology, and information, the company has a wide portfolio of biosimilar and innovative products that meet the patients’ needs globally.

ASRT: Convertible Offering Pauses Momentum

By Hamed Khorsand

ASRT has completed a convertible note offering providing financial flexibility in management’s pursuit of purchasing pharmaceutical assets.
ASRT’s limited financial history of generating positive free cash flow limits available options
The timing of the debt offering without a deal announced poses the possibility of limiting ASRT’s stock price appreciation

Eli Lilly & Co: Acquisition-Led Growth & Other Drivers

Eli Lilly and Company had a very disappointing quarter and failed to meet the Wall Steet expectations in terms of revenues as well as earnings.
In this quarter, the volume grew by 10%, and the new medicines of the company contributed 18% to the volume growth.
We provide the stock of Eli Lilly and Company with a ‘Hold’ rating with a revision in the target price.

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Aug 29

Daily Brief Health Care: Ramsay Health Care, Bumrungrad Hospital Pub Co, Jafron Biomedical Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Ramsay and KKR’s Game of Cat and Mouse
Bumrungrad Hospital Pub Co (BH TB): Flying High on Return of Medical Tourism
Jafron Biomedical (300529CH) 22H1- Possibility of Logic Reversal and Upside Potential of Stock Price

Ramsay and KKR’s Game of Cat and Mouse

By Arun George

Ramsay Health Care (RHC AU) disclosed that the KKR & Co Inc (KKR US) consortium withdrew its indicative proposal but remains committed to the alternative proposal, which the Board earlier rejected.
The alternative proposal, while inferior to the indicative proposal, is still attractive and better than the status quo of no deal. The Board will engage for an improved offer.
The value gap between the parties is not huge, and a deal is possible. The upside (20% to alternative proposal) vs downside (-9% to undisturbed price) is worth a punt.

Bumrungrad Hospital Pub Co (BH TB): Flying High on Return of Medical Tourism

Bumrungrad Hospital Pub Co (BH TB) reported strong Q2 2022 results, with revenue growth of 64% y/y, mainy driven by a 121% y/y increase in revenue from non-Thai patients.
Despite international patient volume is recovering, it is still lower than pre-COVID levels. Non-Thai patients contributed 66.2% of total revenue in Q2 2019, higher than 62.3% reported for Q2 2022.
Thailand targets 10 million foreign tourist arrivals this year, which should augur well for Bumrungrad.

Jafron Biomedical (300529CH) 22H1- Possibility of Logic Reversal and Upside Potential of Stock Price