Healthcare

• Abbvie Inc (ABBV US) reported mixed results in Q1 2022. While revenue of $13.538 billion missed consensus by $70 million, adjusted EPS of 3.16 beat consensus of $3.14.  
• Q1 revenue from immunology portfolio was $6.141 billion, up 6.9% y/y. Management is still confident of delivering $15 billion combined revenue from Rinvoq and Skyrizi by 2025.
• The company has reduced 2022 adjusted EPS guidance to $13.92–14.12 from $14.00–14.20, to reflect an unfavorable impact related to acquired IPR&D and milestones expenses incurred during Q1.

• Global Cord Blood (CO US) is foraying into multi-billion-dollar cell therapy space through acquisition of privately-held clinical-stage biotechnology company, Cellenkos.
• Cellenkos utilizes umbilical cord blood as the raw material to develop T-regulatory cell therapies for treating autoimmune diseases and inflammatory disorders.
• Global Cord believes that Cellenkos is a perfect fit for the company and that its products can have distinct synergies with the company’s existing line of business.

• Clinuvel Pharmaceuticals (CUV AU) has sole marketed drug, Scenesse, approved in the U.S. and Europe for the treatment of a rare skin disorder that causes extreme sensitivity to light.
• Scenesse revenue jumped 65% y/y in H1FY22, due to increasing patient demand. With the re-opening of expert centers, treatment has largely normalized in Europe.
• Clinuvel has rich pipeline, to develop pharmaceutical products to treat a range of indications and non-prescription healthcare solutions to individuals in the wider population.

• Teladoc Health, Inc. (TDOC US) reported Q1 results, in-line with its prior guidance. However, 2022 guidance cut has played the spoilsport.
• Teladoc shares plummeted more than 40% in 2022 to trade near 52-week low. With the near-term noises persist, shares will need time to recover.
• With the current market dynamics in certain areas of operation not in favor of Teladoc, recent downfall in shares does not represent an attractive buying opportunity.

• Scivita Medical Technology (SMT HK) has certain technical advantage and a comprehensive portfolio of products and candidates, which would help the Company seize a position in this market.
• There are also some potential risks and concerns that could be unfavorable for Scivita’s development, which should be aware of by investors.
• In terms of the valuation, SonoScape and Aohua Endoscopy (688212.CH) could be the comparable companies, but the valuation of Scivita should be lower than either of them.

• Align Technology (ALGN US) reported underwhelming Q1 results. Both revenue and earnings missed consensus and were down sequentially.
• Sequential results primarily reflect lower volumes mainly due to continued impact of the COVID-19 causing lesser patient traffic and practice closure.
• Due to increased uncertainty across all its operating markets, the company suspended 2022 revenue guidance. Earlier, Align guided for 20–30% y/y revenue growth in 2022.

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• The quit of the centralized procurement of chemiluminescence products in Anhui directly put Autobio Diagnostics (603658 CH) in a passive position. The implications could be deeper and more complex than expected.
• Autobio didn’t seize COVID-19 testing opportunities, leading to the doubts about the Company’s market sensitivity and team execution, thus losing the opportunity to generate substantial cash flow for future acquisitions.
• Together with weak internationalization business, Autobio’s future performance growth could be uncertain and may not be able to support the rapid valuation expansion as expected.

• Santen Pharmaceutical (4536 JP) is the market leader for prescription ophthalmic pharmaceuticals in Japan, with 52% market share. 68% of total revenue comes from domestic market.  
• Santen’s key partnered drug, Eylea, which contributes 29% of total revenue, is set to lose patent protection in Japan this year.
• Eylea is expected to face competition from biosimilars as well as new biologic drugs launched. This will limit Santen’s near-term growth potential.  

• M3 Inc (2413 JP) reported 4QFY03/2022 and full-year FY03/2022 results yesterday. Revenue grew 18.8% YoY to JPY54.0bn (vs consensus JPY51.9bn) while OP dropped 32.2% YoY to JPY10.5bn (vs consensus JPY17.4bn).
• OPM for the quarter declined to 19.5% vs 34.1% a year ago while core business, Medical Platform’s revenues declined 0.9% YoY for the first time since 2QFY03/2018.
• M3’s shares are down 26.5% YTD and we think there is further downside with weakening of the company’s core earnings.

• Ryman Healthcare (RYM NZ) is expected to see pent-up demand, with the gradual re-opening of New Zealand. Long-term demand environment is expected to be positive, due to favorable macro tailwind.
• However, the company is facing regulatory risk. One of its sites in Australia has ongoing litigation risk. Possibility of renewed COVID-19-related restrictions can not be overruled.
• While Ryman has long-term growth engines, these overhangs may limit the near-term upside potential of Ryman shares.  

• The weak performance of WuXi AppTec’s investment business dragged down the overall net profit growth, which could get worse considering the macro uncertainties, leading to the change of valuation logic.
• The gross profit margin showed a declining trend, and cost control in the context of inflation becomes urgent. Reduced cash balance, weaker short-term solvency and liquidity should also be noticed.
• With majority revenue from overseas markets, external uncertainties (e.g. geopolitical conflict, complex Sino-US relationship, etc.) may be greater than expected. Investors may need to be ready for this.

• Rainbow Children’s Hospital (RCH) aims to raise around US$200m via issuing a mix of primary and secondary shares in its India IPO.
• RCH is a multi-specialty pediatric and obstetrics and gynecology hospital chain in India, operating 14 hospitals and three clinics in six cities, with a total bed capacity of 1,500 beds.
• In this note, we will talk about the recent updates and peer comparison.

• InnoCare was approved to list in the SSE STAR Market, and the Company also released its improving financial performance in 2021. However, the outlook for InnoCare remains challenging and uncertain.
• Either orelabrutinib or the pipeline, they don’t have pricing power due to lack of sufficient competitiveness and slower development progress, which means that their commercialization performance is highly uncertain.
• There’s no definite commercialization outlook for InnoCare, with a far distance from becoming a biopharma. InnoCare was overvalued and could be attractive if the market value could be 50% off.

• Rainbow Children’s Hospital (RCH) aims to raise around US$200m via issuing a mix of primary and secondary shares in its India IPO.
• RCH is a multi-specialty pediatric and obstetrics and gynecology hospital chain in India, operating 14 hospitals and three clinics in six cities, with a total bed capacity of 1,500 beds.
• In this note, we will talk about our earnings forecast and thoughts on valuation.

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore and the US (Chinese ADRs only).
• This week, the highest gross spreads are 21Vianet Group (VNET US), Yashili International Holdings (1230 HK), Dongzheng Automotive Finance (2718 HK), Sezzle Inc (SZL AU), Link Administration Holdings (LNK AU). 
• The lowest gross spreads are Virtus Health (VRT AU), Uniti Group Ltd (UWL AU), 51 Job Inc Adr (JOBS US), China Logistics Property Holdings (1589 HK), Jin Jiang Capital.

• Despite solid growth in 2021, if seen from prior years, the revenue YoY growth rate and net profit YoY growth rate showed a state of divergence, which is “interesting”.
• Since half of Tigermed’s net profits were from investment income,it’s not logical to apply the valuation methods of traditional CXO to Tigermed. Its CRO and investment should be valued separately.
• The poor IPO sentiment, risk of recession and the domestic healthcare rational return would make investors reconsider if Tigermed’s “CRO + PE/VC business model” would be a safe play.

• There are 36 – mostly firm – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal. 
• Two new deals this week: KKR’s possible tilt for Ramsay Health (RHC AU); Dongzheng Automotive  (2718 HK)‘s possible MGO. Possible Offers for Cleanaway (CWY AU)and Hitachi Transport (9086 JP).
• Key updates took place for: Gold Road Resources (GOR AU)‘s all-scrip off-market Offer for DGO Gold Ltd (DGO AU).

• The Strategy underperformed during a pronounced rotation out of higher-growth companies due to investor de-risking and a less accommodative macro backdrop.
• We used opportunities created by heightened volatility to establish seven new positions while exiting eight other names to increase conviction in stocks with more attractive risk/reward profiles.

• ClearBridge is a leading global asset manager committed to active management.
• Research-based stock selection guides our investment approach, with our strategies reflecting the highest-conviction ideas of our portfolio managers.
• Recent underperformance was driven by stock selection, where earnings shortfalls impacted several names in communication services and technology.

• Jinxin announced in recent days that it further increases stake in Shenzhen Hospital, Jiuzhou Hospital and Hewanjia Hospital.
• In this note, we analyze the impact on the company. We think the acquisition is sensible when the market sentiment is weak. 
• We also summarize recent industry development and the company’s FY2021 results. We are turning relatively more bearish.

• Intuitive Surgical (ISRG US) Q1 revenue and EPS beat consensus. High-teens procedure volume growth is the brightest spot and management raised full-year 2022 procedure growth guidance to 12–16%.
• After a strong placement in last couple of quarters, Intuitive is seeing some near-term softening of its system placement pipeline in the U.S.
• In near-term, macro headwinds including regional waves of COVID, staffing pressure at hospitals, component and raw material availability, and logistic delays will remain biggest overhang for the company.

• After the market close on 21 April, it was reported that SK Chemical’s CEO Jeon Kwang-Hyun sold all his shares (21,852 shares) of SK Bioscience from April 19th to 21st.
• The fact that the CEO of SK Chemical, the controlling shareholder of SK Bioscience, sold all his stake in the latter company does not bode well for SK Bioscience. 
• The CEO of SK Chemical selling all his shares in SK Bioscience and increasing reluctance in getting more COVID booster shots suggest further downside risk for SK Bioscience. 

• HilleVax (HLVX US), a novel vaccine developer intends to raise $100 million through an IPO. Its lead program HIL-214, intended to prevent norovirus infection is in phase 2 clinical trial.
• The number of shares to be offered and the price range are yet to be disclosed. Post listing, the company will trade under the ticker HLVX on the Nasdaq.
• HIL-214’s large addressable market, with huge unmet need, HilleVax’s earlier fund-raising history, and Takeda’s backing are some of the positives of this new offering.  

• Abbott Laboratories (ABT US) reported better-than-expected Q1 revenue and earnings, due to higher diagnostic revenue led by strong COVID-19 testing revenue. 2022 adjusted EPS guidance remains unchanged.
• In Q1, global COVID-19 testing-related sales reached to a record high of $3.3 billion, representing 28% of total revenue. COVID-19 testing revenue guidance was raised to $4.5 billion for 2022.
• Medical devices business reported double-digit organic revenue growth in the U.S. as well as international market, showing continued recovery in the elective procedures.