Daily Brief Health Care: BeiGene Ltd, Dr Lal PathLabs Ltd, Sri Trang Gloves (Thailand) Public Company Limited, Moderna Inc, Recce Ltd, Teladoc Health, Inc. and more

• BeiGene and Novartis mutually terminate the Option Agreement on ociperlimab. Our interpretation is Novartis may think its clinical data wouldn’t meet expectations, and is therefore unwilling to take the risk.
• Theoretically, BeiGene still has the possibility of creating miracles to turn things around, but based on the current situation, the risk of TIGIT project failure is already very high.
• We suggest that investors can reduce the position of BeiGene in advance or even consider offload entirely (In case its stock price falls due to unsatisfactory clinical data in 23H2).

• Dr Lal PathLabs Ltd (DLPL IN) reported 14% and 16%, YoY, revenue growth from its non-COVID business in 4QFY23 and FY23, respectively.
• The company’s base business is now back to pre-COVID trajectory. Margins are also nearing pre-COVID level. Going ahead, the company has couple of margin levers.
• Due to lesser competitive threat and uncertainty over COVID, FY24 is lesser challenging than the previous year. The company expects higher revenue growth in FY24 than FY23.

• Moderna’s move into China helps ease its current performance difficulties. But China has its own regulations/policies on vaccines. Whether Moderna can successfully adapt/stand out in China remains to be seen.
• The entire vaccine industry in China is expected to undergo significant changes. We listed the companies in this industrial chain that would benefit from the successful signing with Moderna.
• An important signal behind this deal is that while significant differences remain at the top, mutually beneficial business cooperation between China and US will continue, providing investors with additional options/confidence.

Recent months have been eventful for Recce Pharmaceuticals, with the company presenting its Q323 operational update and announcing ethics approval in April 2023 to commence Phase I/II clinical trials in healthy volunteers for the intravenous (IV) formulation of its lead broad-spectrum synthetic polymer anti-infective compound, RECCE 327 (R327), using a more rapid infusion rate. The Phase I part of the study will assess faster infusion rates of R327 in c 16 healthy participants across three cohorts, with the first cohort recently having successfully completed a 2,500mg R327 dose. A Phase II efficacy study in patients with uncomplicated or recurrent urinary tract infections (UTIs) is expected to commence in H2 CY23. While several potential value inflection points may arise in the next 12 months, obtaining financing is likely to be a near-term strategic priority given the current cash at hand (A$4.6m at 28 April 2023). We value Recce at A$535.6m, up from A$497.4m previously.

• Teladoc Health managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• Consolidated revenue grew by 11% year-over-year, exceeding their guidance range, and their consolidated adjusted EBITDA also exceeded expectations.
• We give Teladoc Health a ‘Hold’ rating with a revised target price.