Healthcare

• On 8 May, Eoflow announced that the U.S. federal court has decided to suspend the effect of the first injunction decision.
• While the effect of the second preliminary injunction decision remains intact, Eoflow has requested a review of the suspension of the effect of the second revised injunction decision as well.
• There has been a renewed optimism on Eoflow (294090 KS)’s share price in the past week which increased by 46% from 7 May to 10 May.

• Indegene Limited (1864095D IN) raised around US$220m in its India IPO, via selling a mix of primary and secondary shares.
• Indegene is a “digital-first” commercialisation firm with an exclusive focus on the global life sciences industry.
• We had looked at the firm’s past performance and shared our thoughts on Indegene’s valuation in earlier notes. In this note, we will look at the trading dynamics.

• Celltrion Inc (068270 KS) posted revenue of KRW700B+ in 1Q24, thanks to increasing demand for Remsima in Europe. The market share of Remsima is approaching 80–90% in select European countries.
• 1Q24 profit setback is temporary as COGS ratio is expected to improve rapidly starting from 2Q24 as the inventory is digested, leading to sequentially improved profit margins in coming quarters.
• With the successful U.S. launch of Zymfentra and continued solid uptake of the existing products, the company is well-positioned to meet its 2024 revenue target of KRW3.5T (+60% YoY).

• Committing to raising production capacity –Shofu announced its fifth medium-term plan, covering the four years from FY3/25 to FY3/28.
• The core message is that the company has competitive products and high demand visibility in overseas markets, and is reaching the point of attaining annual sales volume of ¥50bn.
• The plan will involve significant capital allocation to raise production capacity and other business investments to meet its goals. zed.

• Classys (214150 KS) started 2024 on a strong note with highest ever quarterly revenue and operating profit in 1Q24. Faster-than-expected consumables orders from overseas markets drove the overall performance.
• The proportion of consumable sales rose to 53% (1Q23: 48% and 4Q23: 43%), increasing by 42% and 32% QoQ. Increasing contribution from high-margin consumables sales improved the profitability substantially.
• Favorable industry tailwind, global expansion, and new launches remain main growth drivers. Classys still expects 2024 revenue of KRW225B, up 25% YoY. In April, Classys obtained FDA approval for Volnewmer.

• Rani is a clinical-stage biotherapeutics company developing the ingestible robotic RaniPill (RP) that enables oral delivery of biologics & other large molecules.
• Its pipeline features clinical assets RT-102 (teriparatide for osteoporosis) & RT-111 (ustekinumab for psoriasis).
• Both programs have completed Ph1 trials characterizing safety tolerability & pharmaco-kinetics.

• On 21 February, China Traditional Chinese Medicine (570 HK) announced a privatisation offer from the Sinopharm-led consortium at HK$4.60 per share, a 47.4% premium to the undisturbed price.
• The wide gross spread (7.0%) reflects risks around the re-rating of peers, the slow pace of satisfying the pre-condition, the completion timetable and Ping An’s blocking stake. 
• The key risk is the deal close timing due to the slow pace of regulatory approvals, which increases the chance that the vote will held after the August interim.   

• The growth of TIDES business slowed down, and revenue decreased QoQ despite increasing production capacity.As the main growth point of WuXi AppTec’s future performance, this is not a good signal.
• Due to BIOSECURE Act, US companies have been negotiating with other contract manufacturers so as to reduce reliance on WuXi AppTec.Let’s see the situation of new orders in following quarters.
• WuXi AppTec’s performance recovery is closely related to the pace of Fed’s interest rate cuts. From the perspective of growth outlook/macro environment/geopolitical conflicts, WuXi AppTec is still in “dangerous period”.

• Dr. Reddy’s Laboratories (DRRD IN) reported 13% revenue growth to INR71.1B in Q4FY24. EBITDA climbed 15% to INR18.7B, while net profit zoomed 36% to INR13.1B.
• North America revenue grew 29% YoY to INR32.6B, driven by increase in volumes of base business, contribution from new launches, integration of Mayne portfolio, partly offset by price erosion.
• After adjusting for brand divestment, revenue from India increased 11% YoY. Gross margin improved 140bps YoY and 10bps QoQ to 58.6%, due to better product mix and cost savings.

Oryzon’s Q124 results emphasised the company’s focus on advancing and expanding its CNS and oncology pipelines, driven by its core assets, vafidemstat and iadademstat. Operating performance was in line, with the lower opex (37% y-o-y decline to €3.2m) driven by reduced R&D spending following completion of the Phase IIb PORTICO trial. Notwithstanding the mixed PORTICO results in borderline personality disorder (BPD), we expect clinical activity to pick up in the coming months, with the initiation of the iadademstat combination studies in first-line AML (Phase Ib) and SCLC (Phase Ib/II) in Q224, and the planned end of Phase II (EoP2) meeting with the FDA in BPD. We also expect interim readouts from the Phase Ib FRIDA study in advanced AML (to be presented at the European Hematology Association conference in June this year). We keep our assumptions broadly unchanged and incorporate the latest net debt figure (€3.7m at end-Q124) in our estimates. Our valuation adjusts to €12.1/share.

• Leading pharmaceutical company AbbVie Inc. has outperformed expectations in its first quarter 2024 results.
• The financial results and current business outlook reflect the strength and momentum of AbbVie’s diversified pharmaceutical portfolio, which is projected to have long-term growth prospects.
• The company reported adjusted earnings per share of $2.31 and total net revenues of $12.3 billion, exceeding expectations by $400 million.

• On May 7, 2024, X4 Pharmaceuticals, Inc. (XFOR) announced financial results for the first quarter of 2024.
• The company will be hosting an investor event in June 2024 to present interim results from the ongoing Phase 2 trial of mavorixafor in chronic neutropenia (CN).
• The company has initiated the launch of XOLREMDI (mavorixafor) for use in patients 12 years of age and older with WHIM syndrome.

• Elanco Animal Health Inc is a leading global provider of pharmaceutical products for Companion Animals and Farm Animals
• Stock has declined around 50% since early 2020 due to challenges such as the Covid pandemic and disappointing guidance for FY 2022
• Activist engagement from Sachem Head and a stock price trading at a wide discount to peers make Elanco an intriguing investment opportunity for those willing to weather industry turbulence

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• HCA Healthcare, one of the largest U.S. health systems, has shown robust quarterly results backed by sustained fundamentals in their business.
• The momentum primarily results from broad-based volume growth, improved payer mix, and healthy operating margins.
• While HCA Healthcare generally presents a promising outlook for the rest of the year, the management underscores uncertainties that diverse risks may pose.

• WuXi XDC Cayman (2268 HK) was listed in Hong Kong on 17th Nov 2023 after raising US$470m. Its six-month lockup will expire on 16th May 2024.
• WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• With the review period now complete, we forecast 7 changes for the ChiNext Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in June.
• There are 4 stocks that could be added to both indices while some stocks will also have same way flows from CSI Smallcap 500 Index (SH000905 INDEX) trackers.
• The potential adds have outperformed the potential deletes over the last 6 months. There has been a big move higher in the potential adds over the last few weeks.

Recce Pharmaceuticals has reported several encouraging developments in recent weeks for its lead development compound RECCE® 327 (R327). The intravenous (IV) R327 formulation is advancing to a higher dose level (4,000mg) in its ongoing Phase I/II rapid infusion study and the company is progressing in its plan to submit a US Investigational New Drug (IND) application to commence a US Phase II complicated urinary tract infection (cUTI) study before end-CY24. Recce is also planning to start an Indonesian Phase III registrational study in Q3 CY24, which we anticipate could lead to initial commercialisation in South-East Asia in H2 CY26. We have made minor adjustments to our valuation and now obtain a risk-adjusted net present value (rNPV) of A$661.3m (or A$3.27/share), versus A$644.4m previously.

• ZimVie Inc. historically focused on dental and spine industries since spinning out from Zimmer Biomet in 2022
• Company faced challenges with large debt burden and declining spine business, leading to discounted valuation
• Recent sale of spine business to HIG Capital for $375 million expected to eliminate overhangs, simplify valuation, and position company for stronger future performance

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• In early December, pharmacy distributor Sigma Healthcare (SIG AU) arranged a “transformational merger” with mega chain Chemist Warehouse (CWG). Effectively a reverse takeover designed to get CWG listed.
• SIG issued shares, raising cash, enabling it so NEWCO had high enough minimum float upon merging. Financial engineering for the win. SIG popped – a kind of IPO premium trade.
• But plenty of people are against the deal, and ACCC hasn’t yet opined (13 June is the provisional date), but on Thursday, S&P announced SIG would join ASX200 despite risks.

• The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
• The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
• The 6-month reference period for the June 2024 index rebal event just ended. In this insight, we take a look at our final expectations for ADDs and DELs. 

• Ajanta Pharma (AJP IN) reported strong Q4FY24 results, with double-digit revenue and PAT growth, and improving margins, driven by growth across all the business segments.
• The company has announced INR3.5B buyback plan, involving purchase of 10,28,881 equity shares (0.82% of the total paid-up equity share capital) at a price of INR2,770 per equity share.
• Ajanta Pharma is confident of maintaining double-digit growth going ahead with the existing products gaining market share, new launches, and expansion of field force.

• Laboratory Corporation of America Holdings (LabCorp) has seen significant growth in its first quarter of 2024 and continues to show promise for the rest of the year.
• The total revenue for the quarter was $3.2 billion with adjusted earnings per share at $3.68, which represents a 5% increase in enterprise revenue from the first quarter of 2023.
• Within the revenue growth, the Diagnostic Laboratories business accounted for a 4% increase, while Biopharma revenue rose 8%.

• ResMed has had a strong third financial quarter for 2024, demonstrating strong top-line growth and double-digit bottom-line growth.
• This growth is driven by the ongoing demand for their devices across global markets, high single-digit growth in their Software as a Service business, and double digit global growth in masks and accessories.
• These results are particularly impressive given the company is annualizing a robust quarter of growth from the previous year.

• West Pharmaceutical Services, a globally recognized leader in innovative solutions for injectable drug administration, reported a strong start to the year 2024, despite several challenges in the market.
• The firm recorded a slight decrease in organic sales, operating profits and diluted EPS compared to Q1 2023 due to market dynamics, primarily inventory adjustments, and customer destocking, which is the reduction of excess inventory held by customers.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Hollysys Automation Technologies (HOLI US), QV Equities Ltd (QVE AU), Southern Cross Media (SXL AU), Qantm Intellectual Property (QIP AU), Probiotec Ltd (PBP AU), China TCM.
• Lowest spreads: Chilled & Frozen Logistics Holdings (9099 JP), Roland DG Corp (6789 JP), Mma Offshore (MRM AU), Pact Group Holdings (PGH AU), Jastec Co Ltd (9717 JP).

• With the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index – Shang (SH000905 INDEX) at the close on 14 June.
• We estimate a one-way turnover of 9.3% at the rebalance resulting in a one-way trade of CNY10.88bn (US$1.5bn). The Industrials and Information Technology sectors gain at the expense of Materials.
• The potential adds have outperformed the potential deletes by 8% over the last 3 months. There could be further outperformance over the next few weeks.

• Some investors have concerns that the privatization may fail. We also noticed that Morgan Stanley raised China TCM’s target price to HK$5.4. However, the privatization of China TCM seems “mandatory”.
• At this stage, some background information is worth the attention, which will help investors better understand the logic behind this privatization and thus resolve the “confusion”.
• According to regulatory requirements, it’s expected that both CNPGC and Taiji will integrate resources in pharmaceutical manufacturing and distribution sectors, so as to solve horizontal competition issue between the two.

• Due to the overvaluation of pharmaceutical companies in the primary market, only foreign markets are able to “digest” such high valuation. So, various promising drugs are acquired by foreign investors.
• The field of RDC/RLT has attracted our attention, which could become the next hot area. Since nuclides are the most important bottleneck, domestic related enterprises will usher in opportunities.
• Shijiazhuang Yiling Pharmaceutical’s performance would continue to be under pressure in 24H1 but would rebound in 24H2 after “destocking”. Valuation/share price have not yet bottomed out. Don’t rush to bottom-fish.

• Based on the Q1 2024 results earnings call for AstraZeneca, the British multinational pharmaceutical and biopharmaceutical company seems to be on a steady growth trajectory, but like all corporations, it’s not without its risks.
• In terms of its achievements, AstraZeneca reported its first quarter of 2024 with a 19% growth in total revenue, reflecting high demand for its products.
• Core earnings per share rose by 13%.

• It is clear from Bristol-Myers Squibb’s first quarter 2024 earnings that the company has had a strong start to the year, even as it navigates some challenges.
• The firm’s performance during this time showcased the strength and potential of its commercial portfolio and the progress it has made in advancing its pipeline.
• Key brands such as Eliquis, Opdualag, Reblozyl, Yervoy, and Breyanzi have demonstrated significant strength, contributing to the company’s overall performance.

• Dexcom, Inc., particularly known for its continuous glucose monitoring (CGM) technology, consistently showcased strong performance in the first quarter of 2024 with an organic revenue growth of 25% compared to the first quarter of 2023.
• This noteworthy surge is credited to the substantial demand for Dexcom CGM, seen as customers increasingly value its leading product performance and unique user experience.
• The shift towards Dexcom’s CGM technology has been significant, especially since the launch of G7 in the U.S., which enabled Dexcom to attract a broad range of new prescribers and improve its impact within primary care, resulting in growing demand from people with diabetes.

• Edwards Lifesciences Corporation recorded robust first quarter 2024 results, demonstrating growth on numerous fronts.
• The company’s total sales rose by 10% to $1.6 billion against the same period last year, leading Edwards to raise its 2024 sales guidance to the high end of 8% to 10%.
• This highlights the company’s successful strategic direction, underscored by its substantial investments across transcatheter platforms which are addressing patient needs associated with aortic, mitral, and tricuspid diseases.

• Gilead Sciences Inc. reported a solid first quarter of 2024.
• Total product sales, exclusive of Veklury, rose 6% year-over-year to $6.1 billion.
• Growth was driven primarily by demand across its HIV, oncology, and liver disease verticals.

• Indegene Limited (1864095D IN) is looking to raise US$220m in its India IPO, via selling a mix of primary and secondary shares.
• Indegene is a “digital-first” commercialisation firm with an exclusive focus on the global life sciences industry.
• In this note, we will look at peers and discuss our thoughts on valuation.

• Bumrungrad Hospital Pub Co (BH TB) reported strong 1Q24 results, with revenue growing 8% YoY to THB6,576M, EBITDA climbing 22% to THB2,676M, and net profit increasing 25% to THB1,985M.
• International patients revenue increased 6% YoY. Slow growth in the revenue from international patients can be attributable to high base, as it grew by a whopping 105% YoY in 1Q23.
• With tight control on cost, the company has reported record high margins in 1Q24, with gross, EBITDA, and net margin reaching 51.7%, 40.7%, and 30.2%, respectively.

• Lexaria is a biotechnology company seeking to enhance the bioavailability of multiple drug agents using DehydraTECH (DHT), its technology using oral and topical delivery.
• It combines lipophilic APIs with specific fatty acid and carrier compounds followed by dehydration.
• DHT offers several attractive features: substantial improvement in bioabsorption in terms of time to measurable plasma levels & AUC, brain permeation, taste masking & side effect reduction.

• MiMedx is a wound care and therapeutic biologics company, developing and distributing allografts.
• The company derives its products from human placental tissues processed using the Purion technology.
• MiMedx differentiates itself in the regenerative medicine market through the substantial library of supportive research for its products.

• Organovo is a biotech company that has 3D technology enabling the company to produce various human tissues, allowing the company to target diseases and accelerate the drug development process.
• The company recently released positive Phase 2 results for one of its primary treatments-FXR314.
• These results are very encouraging and bolsters our belief in the future prospects for ONVO.

• Align Technology Inc. started the year 2024 on a strong note with better than expected revenue and earnings for the first quarter.
• The company reported a 5.8% year-over-year rise in worldwide revenues, driven by a 3.5% growth from the Clear Aligner segment and a whopping 17.5% growth from Systems and Services.
• The Align First Quarter 2024 Earnings call highlighted revenue growth across all regions, powered by robust volume growth of Clear Aligners, especially in the Asia Pacific region.

• On April 1, 2024, Tonix Pharmaceuticals Holding Corp.
• (TNXP) announced financial results for the fourth quarter and full year 2023 and provided a business update.
• Tonix will be filing a New Drug Application (NDA) for TNX-102 SL (cyclobenzaprine HCl) for fibromyalgia in the second half of 2024 based on positive results from the Phase 3 RELIEF and RESILIENT trials.

• Biogen’s first quarter 2024 earnings reflect the company’s commitment to growth and innovation within its portfolio, coupled with an unwavering focus on improving profitability.
• The company has seen growth in its earnings per share for the first time in several years, largely due to the performance of its underlying business.
• CEO, Chris Viehbacher, praised the company’s teams for their commitment and the role they play in driving the company’s success, notwithstanding the ongoing changes within the company.

• BioMarin Pharmaceutical Inc. reported strong financial results for Q1 2024, while implementing significant advances as part of the company’s new corporate vision and strategy.
• According to the firm, this is done in the interest of positively influencing patients’ lives and generating value for shareholders, with several strategic initiatives currently underway.
• Based on the company’s R&D portfolio assessment, three assets were chosen to be accelerated based on their potential to transform patients and shareholder value.

• Chemed Corporation’s management recently their financial results for the first quarter of 2024, which ended on March 31, 2024.
• The earnings showed mixed results, with strong performance from VITAS and weaker metrics from Roto-Rooter.
• VITAS, Chemed’s healthcare subsidiary, showcased a robust operating performance with an increase in admissions of 4.5% over the previous year.

• Indegene Limited (1864095D IN) is looking to raise about US$220m in its upcoming India IPO.
• Indegene is a “digital-first” commercialisation firm with an exclusive focus on the global life sciences industry.
• We looked at the firm’s past performance in an earlier note. In this note, we look at the RHP updates.

• Seven Group Holdings (SVW AU) now holds 85.8% of Boral Ltd (BLD AU) and that will lead to deletion of Boral from the S&P/ASX 200 (AS51 INDEX). 
• As expected, Sigma Healthcare (SIG AU) will be added to the S&P/ASX 200 (AS51 INDEX) at the close on 9 May.
• Sigma Healthcare (SIG AU) price movements will be largely influenced by its pending merger with Chemist Warehouse Group (CWG).

• Cancer is the most common cause of death in Japan, and at 282.9 cases per 100 000 people, it ranks at the upper end of the global recorded range.
• In 2020, Daiichi Sankyo embarked on transforming to a leading oncology specialist in terms of new drug development.
• Daiichi Sankyo’s ADC pipeline comprises of six higher level drugs with a number of indications (sub-categories). This pipeline is part of a universe of 2499 oncology drugs in development.

• Sumitomo Pharma (4506 JP) cut FY24 revenue guidance by 1% to ¥314.6B (-43% YoY) and raised operating loss guidance by ¥199B to ¥355B. Impairment loss of ¥180B negatively impacted bottomline.
• Sumitomo has set FY25 revenue guidance at ¥338B (down 27% from MTBP 2027) and core operating profit at ¥1B (down 98% from MTBP 2027). The company suspended FY25 dividend.
• The company will announce FY25 guidance for operating and net profits during the announcement of FY24 result, scheduled for May 14, 2024.

• Quest Diagnostics’ earnings promising headlines such as the company delivering nearly 6% base business revenue growth in Q1, Quest’s ability to sustain strong commercial focus on physicians and hospitals, continued investment in automation and artificial intelligence (AI), and a reevaluation of the guidance for the full year.
• Quest Diagnostics’ Q1 growth was driven by its significant focus on physicians and hospitals.
• The company’s broad health plan access allowed it to leverage sustained high rates of health care utilization to drive new customer growth.

AFT continues to expand its Maxigesic IV footprint with the announcement of a licensing agreement in Brazil, the largest pharma market in South America and tenth largest market globally. The deal signed with Halex Istar, a leading manufacturer of injectables in the country, provides a strong foundation for further extension into the Latin American and global markets, an overarching long-term goal for AFT. Maxigesic IV is a higher-strength version of AFT’s proprietary paracetamol plus ibuprofen formulation targeting post-surgical pain relief in the hospital setting. It is currently available in 36 countries, including the US, with the recent launch by Hikma, its distribution partner.

• Thermo Fisher Scientific posted a strong start to the year, with the first-quarter revenue reaching $10.34 billion and an increase of 2% year-over-year in adjusted EPS, to $5.11 per share.
• The robust financial performance was primarily driven by strong operational discipline, superior commercial execution, and its effective growth strategy.
• The company managed to beat their expectations which is reflected in the raised guidance, setting the stage for strong performance in 2024.

• Peptidream Inc (4587 JP) has obtained first-in-human imaging studies approval for its first in-house peptide radiopharmaceutical therapeutic program, PD-32766 targeting patients with clear cell renal cell carcinoma.
• Novartis (NOVN SW) has expanded peptide discovery collaboration with Peptidream. The expanded partnership could bring up to $2.7B in milestone payments plus royalties to Peptidream.
• In 2023, Peptidream reported revenue of ¥29B, up 7% YoY, with radiopharmaceutical revenue growing 40% YoY to ¥16B. For 2024, the company guided for revenue of ¥35B, up 22% YoY.  

Newron Pharmaceuticals has shared positive top-line data for its evenamide programme from its potentially pivotal Phase II/III trial (study 008A) in patients with poorly managed schizophrenia on current antipsychotic therapy, but not considered treatment-resistant. The trial met its primary endpoint of improvement on the Positive and Negative Syndrome Scale (PANSS) score from baseline, and the key secondary endpoint of improvement on the Clinical Global Impression of Severity (CGI-S) scale. Statistical significance was met in both, consolidating the already strong results from the Phase II trial (study 014/015) in treatment-resistant schizophrenia (TRS). Management plans to follow this up with a potentially pivotal Phase III study in TRS (study 017), which, subject to final agreement by potential partners and regulatory bodies, could commence within 2024.