Healthcare

• Endo International (ENDP US) shares are trading near their lows. However, Endo does not seem to be an attractive bottom fishing idea as opioid litigation is still the major overhang.
• Endo’s top selling drug Vasostrict is facing generic competition, which has dragged Q1 performance of the company. Q1 revenue declined 9%, while Q2 revenue is expected to decline 28%.
• Endo is banking on specialty branded drug Xiaflex and QWO, and sterile injectables for its long-term growth. However, they cannot fully offset the impact of Vasostrict revenue loss in near-term.

• China’s AI medical imaging industry is still in its infancy, and needs to face industry supervision, data safety, potential compliance issues, doubts on commercialization prospects, NRDL coverage and increasing competition. 
• Shukun has its obvious technical advantage, rich product portfolio and many registration certificates, but the Company’s path to commercialization and profitability still remains to be seen.
• Infervision and Airdoc could be the benchmark companies. Considering the strength, the moat, and the potential of Shukun, its valuation could be higher than Infervision and Airdoc.

• Profit fell short; reiterate SELL
• Results below expectations
• Defers its capacity expansion
• Earnings adjustments

TOPG’s 3QFY22 net profit of MYR15m was below our and consensus full-year estimates. Management expects near-term outlook to remain challenging with oversupply issue and escalating raw material costs although the decline in ASP is at slower pace. TOPG will defer some of its capacity expansions. We lower our FY22 earnings forecasts by 40% after assuming a lower utilisation rate. Our TP is unchanged at MYR0.91 (on 13x CY23PER). Maintain SELL.

• Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
• The Diamond Hill Long-Short Fund’s returns were just about flat—slightly positive— in Q1.
• After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
• From current levels, equity market returns over the next five years are likely to be below historical averages.

• Ironwood Pharmaceuticals, Inc (IRWD US)’s sole marketed drug Linzess is the #1 prescribed branded treatment in the U.S. for adults with IBS-C/CIC with ~4M unique patients since launch.
• First commercialized in December 2012, Linzess achieved blockbuster drug status in 2021. The earliest licensed entry of any generic Linzess in the U.S. is expected only in March 2029.
• The company’s potential drug candidate IW-3300 is in phase 1 trial for interstitial cystitis/bladder pain syndrome (IC/BPS). Recently, Ironwood has shared positive findings from the study.  

• Mega should establish core competitiveness via entering hospital market and being recognized by hospitals. It’s not a long-term solution to exploit the market by mainly relying on Meinian.
• Although Mega’s competitive advantage in the channels is still more obvious due to Meinian, it is actually a double-edged sword, especially when Meinian is in financial difficulty.
• Without Meinian, whether Mega can develop independently is a question mark. In terms of valuation, BGI and Berry could be comparable companies, and Mega’s valuation could be lower than Berry.

• Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
• During a volatile quarter, the Diamond Hill All Cap Select Fund held up meaningfully better than the Russell 3000 Index.
• After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
• While the year-to-date pullback in equity markets has created some investment opportunities, broad market valuations remain above historical averages.

• Shockwave Medical Inc (SWAV US), with its differentiated local delivery of sonic pressure waves for the treatment of calcified plaque, seeks to establish a new standard of care through IVL.  
• The company is advancing IVL system for multiple large addressable markets totaling over $8.5B. Shockwave’s revenue has five-year CAGR of 244%, with continued improvement in gross margins.
• Ongoing clinical programs to expand geographies and indications should further accelerate growth. Recently, the company obtained marketing approval in China and Japan.

• Several press reports regarding potential takeover speculations related to Indian diagnostics company Metropolis Healthcare Limited (METROHL IN) have emerged in the Indian press over the last few days.
• Metropolis Healthcare Limited currently has a total market capitalization of US$1bn.
• Below is a closer look at the details of the situation.

• Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
• During a volatile quarter, Diamond Hill Large Cap Concentrated Fund performed roughly in line with the Russell 1000 Index.
• The market environment in Q1 provided a meaningful opportunity for us to initiate positions in high-quality names.
• From current levels, equity market returns over the next five years are likely to be below historical averages.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• Commercialization prospects of domestic autoimmune disease market is highly uncertain. Related drugs’ sales could be very limited in short term. Overseas market space is much larger, so internationalization is inevitable.
• Our forecast on RemeGen’s total sales is just RMB3.5-4 billion. The deal with Seagen still puzzles us, which is the key to determine how far RemeGen can go in internationalization.
• Keymed is like “a younger RemeGen” due to the differentiation strategy of pipeline layout. However, Keymed’s internationalization progress is much weaker, with higher risks and uncertainties than RemeGen.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
• Amid a rocky market quarter overall, our portfolio’s negative returns still outpaced the Russell 2500 Index by a healthy margin in Q1.
• From current levels, equity market returns over the next five years are likely to be below historical averages.
• We believe we can achieve better-than-market returns over the next five years through active portfolio management.

• Green Cross LabCell (144510 KS) (now known as GC Cell) the world’s largest cell therapy product producer with its top selling anticancer drug, Immunecell-LC. The drug has label expansion scope.
• The company has developed a pipeline of late and early-stage cell therapy candidates for solid tumors. It also has a strong position in global cell therapy CDMO business.
• GC Cell’s unrivaled position in the specimen test services in Korea acts as the main cash cow to feed its future growth engine of cell therapy development.

• IRay’s performance has shown a trend of accelerating growth in 2021/2022Q1, mainly driven by the mobile DR sales during COVID-19 as well as the dental (CBCT) and industrial security businesses.
• The sales of mobile DR would slow down after COVID is under control. The decreasing price due to fierce competition in grassroots markets would finally drag down gross profit margin. 
• The concern is that the market space (DR/dental/industrial fields) is not big, with obvious growth ceiling. So, we lowered our revenue/profit margin forecast and we think iRay is overvalued 

• With the screening period over (May 3-31), Shinhan IN/Celltrion OUT is virtually a foregone conclusion.
• We should consider an individually-hedged approach, instead of a plain long/short, with a tightly moving-together peer, preferably on a single-day trading window.
• I suggest using KB Financial and Celltrion Healthcare as hedges of LONG & SHORT for Shinhan and Celltrion, respectively.

• Enzychem Lifesciences Corp (183490 KS) is eyeing on its lead innovative drug candidate, EC-18 for long-term sustainable growth driver. EC-18 is in late-stage clinical trial for couple of indications.
• EC-18 is in phase 2 clinical trial for the treatment of chemoradiation-induced oral mucositis (CRIOM), an acute inflammation of the oral mucosa following systemic chemoradiation therapy.
• Currently, CRIOM has no approved therapies. Enzychem Lifesciences has filed for FDA breakthrough therapy designation for EC-18 in CRIOM, which will enable designing of phase 3 study.  

• Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
• Amid a rocky market environment, our portfolio’s negative returns still outpaced the Russell 2000 Index by a healthy margin in Q1.
• After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
• From current levels, equity market returns over thenext five years are likely to be below historical averages.

• Bukwang Pharmaceutical (003000 KS) is developing innovative new drug candidates in partnership with pharmaceutical and bio-venture companies in Korea and abroad.
• Antipsychotic lurasidone (brand name: Latuda), in-licensed from Sumitomo Pharma is the lead candidate of Bukwang’s innovative drug pipeline. Lurasidone will be launched in 3–4 years in Korea.
• Recently, Bukwang announced positive phase 1 trial for SOL-804 for the treatment of prostate cancer, in-licensed from Solural Pharma. SOL-804 has an addressable market opportunity of KRW23 trillion in 2027.

• Burning Rock Biotech (BNR US) reported strong Q1 2022 results, with accelerated double-digit revenue growth of 27% y/y, higher than full year 2022 revenue growth guidance of 22%.
• Operating loss widened due to 41% y/y surge in opex, primarily attributed to higher staff cost, which resulted from an increase in headcount.
• Management reiterated 2022 revenue growth guidance of 22% y/y. With Shanghai re-opening, this seems to be achievable.

• BGH played a shrewd game. It bumped its Offer to A$8.15, matching CapVest’s Scheme price. With BGH (then) holding 22.38% of shares out, CapVest folded its tent.
• As CapVest was not returning calls, Virtus Health (VRT AU) commenced discussions with BGH and ultimately reversed course and recommended BGH’s Offer.  
• BGH now has 71.63% of the voting power, edging towards the 90% threshold, following which a special fully franked dividend will be paid. 

• Huons Global (084110 KS) is focusing on new growth drivers such as health functional food, medical devices, and research collaboration to accelerate its earnings further.
• Huons’ health functional food brand, Menolacto has become Korea’s no. 1 brand for menopausal lactic acid bacteria and generated cumulative sales of KRW64 billion within two years of its launch.
• Through external research collaboration and developing its own pipeline, Huons has a rich pipeline of new products, including new chemical entities, medical devices, and functional foods for the domestic market.

• OrbusNeich Medical Group (NEICHZ HK) has a rich pipeline with a leadership position in the PCI balloon markets.
• Its global business layout would also help the Company “hedge” the negative domestic policy impact or regulation changes.
• However, the fierce competition, market pattern, industry characteristics, centralized procurement and other concerns should not be neglected.

• The Carillon Family of Funds spans a range of investment objectives and asset classes designed for long-term investors.
• Along with the spike in oil prices, energy stocks performed best during the quarter, followed by more defensive and countercyclical sectors like utilities and consumer staples.
• As we look toward the rest of 2022, we continue to see a somewhat balanced outlook for equity markets returns.

• The Carillon Family of Funds spans a range of investment objectives and asset classes designed for long-term investors.
• The U.S. stock and bond markets appear to be conveying different assessments of the outlook, leaving investors to decide which view will prevail.
• Focusing on how it affects markets, the war also is a concern for global growth and a source of volatility as the highly uncertain situation evolves.

• The Carillon Family of Funds spans a range of investment objectives and asset classes designed for long-term investors.
• The U.S. stock and bond markets appear to be conveying different assessments of the outlook, leaving investors to decide which view will prevail.
• The situation could favor U.S. stocks, as they are more insulated than their European counterparts from energy price spikes and the direct impacts of the war and its economic ramifications.

• The Carillon Family of Funds spans a range of investment objectives and asset classes designed for long-term investors.
• Inflation concerns and accelerating expectations of interest rate hikes by the U.S. Federal Reserve sent equity markets in a downward spiral to start the new year.
• Investors continued to favor value stocks over growth stocks as small-cap value outperformed small-cap growth by more than 10% during the quarter.

• The Carillon Family of Funds spans a range of investment objectives and asset classes designed for long-term investors.
• Q1 2022 was marred by tragedy on a global scale and investors encountered three months of volatile trading induced by persistently high inflation, rising rates, and Russia’s invasion of Ukraine.
• Over the last 12 months many investors anchored to the long-term growth trends while discounting value’s recent strength, and more importantly the reasons behind it.

• Nissui Pharmaceutical (4550 JP) has been cheap for years. Years and years and years. 
• It has traded at negative Enterprise Value for almost all of the past year. 
• Now Shimadzu Corp (7701 JP) is taking it over and heavily indebted parent Nippon Suisan Kaisha (1332 JP) is letting it go.

• PureTech Health (PRTC LN) has highly differentiated wholly owned pipeline of seven therapeutic candidates and four lymphatic and inflammation platforms. It also has strategic investments in six founded entities.
• KarXT, lead candidate of founded entity Karuna Therapeutics Inc (KRTX US), is progressing toward commercialization, thereby entailing milestone and royalty opportunities for PureTech. 
• PureTech’s lead candidate LYT-100 is in three late-stage clinical trials for three indications addressing large patient population. LYT-100 also has potential to address to other underserved diseases.

• Scivita is a China-based medical device company with a focus on single-use endoscope. The company is looking to raise up to USD100 m via a Hong Kong listing.
• In this note, we look at the company’s background, the industry dynamics and the company’s products.
• We think the company has a decent investor backing and management team but the intense competition is the main issue.

• Due to the reduction of glove selling price, lower demand, significant cost hike and inflation, it is expected that Intco would continue to face declining performance and margins. 
• Under current circumstances, supply exceeds demand. The overcapacity could lead to substantial asset impairment. So, it would take some time before the industry clearing is finished or reach new balance.
• Intco’s weak performance would continue. Its share price is likely to remain depressed for some time.So, it may not be wise to bottom fishing that early even with low valuation.

• Distillate Capital Partners LLC was formed in 2017 and is based in Chicago, IL. The firm is 100% employee-owned, and DCP’s partners each have invested significantly in the firm’s investment strategies.
• Distillate’s U.S. FSV returned -3.60% net of fees versus -4.60% for the benchmark.
• Distillate’s Intl. FSV strategy returned -6.19% net of fees.
• Distillate’s U.S. SQV’s 2022 Q1 total return after fees was -4.49%.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.