Healthcare

Helixmith (084990 KS) shares have been sliding since end of June due to delay in receiving the recommendation from the U.S. data monitoring committee for its phase 3 clinical trial.
On August 18, Helixmith received recommendation to continue phase 3 clinical trial of its lead candidate Engensis (VM202) for diabetic peripheral neuropathy, thereby removing the overhang.
Engensis has attracted high interest from investors, as it is targeting a large addressable patient population of nearly 8.5 million in the U.S. alone, with high unmet medical need.

Imugene (IMU AU): Clinical Trial Continued to Advance; Cash Position Still Strong

Imugene Ltd (IMU AU) has recently dosed the first patient in cohort 3 in the phase 1 clinical trial of oncolytic virotherapy candidate, CHECKvacc for breast cancer.
As at June 30, 2022, Imugene had cash balance of A$99.9 million, providing a runway to support its clinical pipeline and operations into 2025.
As the clinical trials progressing, the company has appointed an experienced life sciences CFO.

Abbott Laboratories: Capacity Expansion For Diabetes Care & Other Drivers

By Ishan Majumdar

Abbott Laboratories had a strong financial performance in the recent quarter led by the development of medical, diagnostics, and pharmaceutical devices.
During this quarter, the company is continuing to strengthen its Medical Device portfolio with new innovative products.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

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Aug 25

Daily Brief Health Care: Concord Biotech Ltd, HealthCare Global Enterprises, Biogen Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Concord Biotech Pre-IPO Tearsheet
HCG: Scaling Up Well
Biogen Inc: The Byooviz Marketing Agreement & Other Drivers

Concord Biotech Pre-IPO Tearsheet

By Clarence Chu

Concord Biotech Ltd (658823Z IN) is looking to raise about US$250m in its upcoming India IPO. The deal will be run by Kotak, Citi, and Jefferies.
Concord Biotech is an India-based biopharma firm, which develops and manufactures fermentation-based APIs.
As per F&S, it was one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on FY21 volume.

HCG: Scaling Up Well

By Ankit Agrawal, CFA

Over the last 5Y, HCG had been in expansion mode. However, since the last year or so, HCG has been consolidating its presence.
As a result, revenues and profitability are scaling up as new centers are inching towards maturity. FY23 is poised to be a strong year.
While HCG has been consolidating, it is not compromising on growth. Aided by technology upgradation, growing brand awareness and digital initiatives, mature centers continue to see robust growth.

Biogen Inc: The Byooviz Marketing Agreement & Other Drivers

By Ishan Majumdar

Biogen has been in the news for a number of controversies, most of which are associated with its Alzheimer’s drug, Aduhelm.
The company is looking to shake off the claims that it misled investors on the assumed success of Aduhelm.
However, the company did win a priority review from the U.S.

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Aug 24

Daily Brief Health Care: Bristol Myers Squibb Co, Shenzhen Mindray Bio-Medical Electronics and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Bristol-Myers Squibb: Acquisition of Turning Point Therapeutics & Other Developments
Shenzhen Mindray Bio-Medical Electronics (300760.CH) 2022H1 – Waiting for the Next Jump in Valuation

Bristol-Myers Squibb: Acquisition of Turning Point Therapeutics & Other Developments

By Ishan Majumdar

Bristol-Myers has continued its efforts towards expanding its new product range, in-line franchises, pipeline, and carried out critical business growth initiatives.
This result was fuelled by their in-line and new product portfolio’s 16% solid growth, which more than made up for their recent LOEs.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Shenzhen Mindray Bio-Medical Electronics (300760.CH) 2022H1 – Waiting for the Next Jump in Valuation

Mindray withstood the negative impact of pandemic/lockdown and continued to achieve solid growth in 2022H1 amid China’s “new infrastructure” projects and the recovery of overseas demand for routine medical care.
The essence of falling shares is the process of optimistic high growth expectations returning to rationality,which takes time until the cyclical shocks brought by the receding of pandemic are digested.
Mindray’s biggest alpha could be the change brought about by M&A. From the perspective of strategic development, the next jump in valuation is likely to depend on subsequent M&A performance.

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Aug 23

Daily Brief Health Care: Biocytogen Pharmaceuticals (Beijing), BeiGene Ltd, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Biocytogen (百奥赛图) IPO: Short Term and Long Term Challenges
BeiGene (6160.HK/BGNE.US) 22H1- It Is an Indisputable Fact that BeiGene Is Difficult to Make Profits
Can Companies Barely Meet Independent Director Requirement and Shy Away from Diversity Create Value?

Biocytogen (百奥赛图) IPO: Short Term and Long Term Challenges

By Ke Yan, CFA, FRM

Biocytogen is a leading animal model player in China expanding into biotech. The company launched a downsized deal to raise up to USD 70m via a Hong Kong listing.
In our previous note, we looked at the company business lines and compared the company’s operation with leading animal model players.
In this note, we provide an update for the book building. We provide our quick thoughts on the valuation and deal dynamics.

BeiGene (6160.HK/BGNE.US) 22H1- It Is an Indisputable Fact that BeiGene Is Difficult to Make Profits

BeiGene’s product sales in 2022H1 more than doubled YoY, which was a positive sign for commercialization. However, net loss further widened, mainly due to significantly high R&D and SG&A expenses.
Tislelizumab and zanubrutinib are not enough to support BeiGene’s high valuation. The success or failure of TIGIT project will be the key to determine how far BeiGene will go.
So far, it is still an indisputable fact that BeiGene has profitability issues. That’s why it’s hard for us to be optimistic about this company.

Can Companies Barely Meet Independent Director Requirement and Shy Away from Diversity Create Value?

The number of companies that meet the requirement has increased since the listing criteria for prime market specified specific numbers. However, the majority of companies have managed to meet 30%.
It’s clear that once the numerical criteria for board diversity as well as ％ independent directors were specified, it would have gone all the way. But this couldn’t be done.
It is concerned that Japanese companies may be distancing themselves from the need to listen to a wide range of opinions and create new value.

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Aug 22

Daily Brief Health Care: Hansoh Pharmaceutical, Wuxi Biologics, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Hansoh Pharmaceutical (3692 HK): Strengthening Innovative Portfolio Through In-Licensing
Wuxi Biologics (2269.HK) 2022H1 – Hard to Achieve V-Share Rebound
More Companies Are Hiring Women Directors, but to Solve the Fundamental Problem of Diversity

Hansoh Pharmaceutical (3692 HK): Strengthening Innovative Portfolio Through In-Licensing

Hansoh Pharmaceutical (3692 HK) is strengthening its innovative drug pipeline. In August the company in-licensed one clinical stage drug candidate for women health, having large addressable market opportunity in China.
Earlier in May, entered into an exclusive license agreement with NiKang Therapeutics and obtained an exclusive license to develop and commercialize NKT2152 for the treatment of cancer within China.
Hansoh’s self-developed oncology drug is getting closer to the UK approval through its partner EQRx. The company received approval for one generic oncology drug in China.

Wuxi Biologics (2269.HK) 2022H1 – Hard to Achieve V-Share Rebound

WuXi Biologics released 2022H1 results. The Company maintained its growth momentum. We highlight some positive sides. However, gross profit margin decreased. Considering the future trend, margin performance is not optimistic.
A drop in demand has already occurred. Meanwhile, after the biologic drug boom has passed, the “low-hanging fruit” is gone, there could be more magnified cyclical problems for WuXi Biologics.
As an old generation CXO, it’s difficult for WuXi Biologics to achieve V-shaped rebound or hit new highs.2022 is a good time to offload. Investors can take advantage of it.

More Companies Are Hiring Women Directors, but to Solve the Fundamental Problem of Diversity

It shows that many companies still do not recognize the importance of diversity and that the hiring of women independent directors is merely a numbers game.
In Japan, there is the belief that a close-knit organization is more effective in achieving its goals, and there is a practice of excluding different opinions by emphasizing homogeneity.
In addition to the repeated disregard for women’s rights, the deep-seated problem of accepting this disregard is the reason diversity has not truly progressed.

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Aug 20

Daily Brief Health Care: Tokyo Stock Exchange Tokyo Price Index Topix, Amvis Holdings Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Interest Will Be Focused on when the TSE Will Begin Cleaning up the Prime Market
Amvis Holdings Inc (7071 JP): An Expanding Hospice Business in Japan

Interest Will Be Focused on when the TSE Will Begin Cleaning up the Prime Market

The listing criteria regarding trading volume is much simpler than other criteria. It’s clear that an average daily trading value of 20 million yen isn’t sufficient liquidity for many investors.
Many companies that fail to meet listing standards have low expectations for future cash flows, which leads to low valuations and is the reason for sluggish trading volume.
Keeping these companies in prime market is expected to lead to more focus on this issue, as the gap between these companies and their exact opposites will widen further.

Amvis Holdings Inc (7071 JP): An Expanding Hospice Business in Japan

Amvis Holdings Inc (7071 JP) is expected to have revenue CAGR of 57% and 600 basis points net profit margin improvement during FY18–23, driven by aggressive business expansion.
Amvis plans to have 100 hospice facilities by 2025–2026 from 58 at the end of FY22. FCF is steadily improving, due to the high profitability of the business.
With a float of 27.4%, Amvis is just maintaining the listing criterion on the Tokyo Stock Exchange’s Standard market. It has announced stock split, with record date of September 30.

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Aug 19

Daily Brief Health Care: Shanghai Pulse Medical Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Pre-IPO Shanghai Pulse Medical Technology – The Industry, the Business and the Concerns

Pre-IPO Shanghai Pulse Medical Technology – The Industry, the Business and the Concerns

The products of Shanghai Pulse Medical Technology (PMT HK) have entered the commercialization stage, indicating that the Company has gone through the stage from 0 to 1.
The medical insurance coverage and CE Mark offer Pulse more options in terms of commercialization, which is very vital especially in front of domestic policy risk and unfriendly financing environment.
Next, Pulse needs to focus more on how to increase the market penetration, so as to present promising commercialization results. Overall, we are looking forward to the future of Pulse.

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Aug 18

Daily Brief Health Care: Paradigm Biopharmaceuticals, Weimeizi (Guangdong) and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Paradigm Biopharmaceuticals (PAR AU): Comfortable Funding Position Through 2024
Pre-IPO Weimeizi (Guangdong) – The Market Position Is Not Solid

Paradigm Biopharmaceuticals (PAR AU): Comfortable Funding Position Through 2024

Paradigm Biopharmaceuticals (PAR AU) announced A$66 million capital raising, comprising A$45.7 million institutional placement and rights issue offer of A$20.3 million at A$1.30 per share.
At the completion of the transaction, Paradigm will have a proforma cash position of $108.5 million, which funds the company into 2024.
Paradigm is expected to announce data from one of its key trials related to knee OA pain in September, which will be a near-term catalyst for the company.

Pre-IPO Weimeizi (Guangdong) – The Market Position Is Not Solid

WEIMEIZI develops the oral care market by means of large promotion and marketing so as to attract consumers, which helps Saky become one of the top brands in China.
However, with the layout of other long-lasting reputable brands and the entry of new brands, how to maintain the market share in fierce competition has become an important issue.
WEIMEIZI’s leading market position is not solid, unless it could create differentiated products and keep up with industry trends closely.

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Aug 17

Daily Brief Health Care: Olympus Corp, Tokyo Stock Exchange Tokyo Price Index Topix, Sinopharm Group Co Ltd H and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Olympus Corp (7733 JP): Started FY23 on a Strong Note Thanks to Favorable Foreign Exchange Rate
The Time Is Not Far off when the Prime Market Listing Criteria Itself Will Be Questioned
Sinopharm Group (1099.HK) – Industry Trends Hardly Support High Valuation Expectations

Olympus Corp (7733 JP): Started FY23 on a Strong Note Thanks to Favorable Foreign Exchange Rate

Olympus Corp (7733 JP) reported double-digit revenue and operating profit growth in Q1FY23, thanks to favorable foreign exchange rate. Adjusting for FX, revenue was flat compared to year-ago period.
Based on favorable foreign exchange rate, management has raised FY23 revenue and operating profit guidance by 5% and 12% to ¥1,019 billion and ¥231 billion, respectively.
With more than 85% of total revenue coming from international markets, Olympus should remain a prime beneficiary of Japan’s weak currency.

The Time Is Not Far off when the Prime Market Listing Criteria Itself Will Be Questioned

For the majority of companies applying the measures, the market capitalization in circulation is less than 10 billion yen, which is the reason for not meeting the listing criteria.
The only solution to this problem is to raise the stock price, which can only be done either by improving profits or by raising the expectation on the future profits.
It won’t be long before the time comes when the criteria will be questioned in the first place, whether tradable market capitalization of 10 billion yen is sufficiently liquid investment.

Sinopharm Group (1099.HK) – Industry Trends Hardly Support High Valuation Expectations