Daily Brief Health Care: Capitol Health, Green Cross, Upstream Bio, Ainos , Medicus Pharma , Sichuan Kelun Pharmaceutical, Essa Pharma , Basilea Pharmaceutica Ag, Aethlon Medical and more

• The Capitol Health (CAJ AU) IE considers Integral Diagnostics (IDX AU)’s merger proposal (0.12849 Integral shares per Capitol share) fair and reasonable. 
• While ACCC informal clearance is an overhang, the evidence suggests that clearance should be secured. The shareholder vote risk is low.
• The offer terms are attractive. At the last close and for the 14 November payment, the gross/annualised spread is 4.7%/37.3%.  

• Green Cross (006280 KS) has gained access to 80% of privately insured members in the U.S. for blood product Alyglo, which has been included in formularies of three major insurers.
• Green Cross targets to generate $50M revenue from Alyglo this year. The target seems to be conservative. The company further aims to sustain annual growth of 50%+, which is achievable.
• The company reported sequential improvement in 2Q24, with 17% QoQ revenue growth and significant improvement in gross margin. Revenue growth of 7–8% is expected during 2024–2026.

• Upstream Bio, a clinical-stage biotech company developing novel therapies for inflammatory and allergic diseases, filed for an IPO in the United States.
• The biotech firm was backed by premier investors, including OrbiMed, Access Industries, Maruho Co., Samsara BioCapital, Omega Funds, and Enavate Sciences, among others.
• I believe that company’s lead compound, verekitug (UPB-101), has a broader commercial opportunity than many investors appreciate.

• Taiwan Veldona human study to start in Sjogren’s.
• Ainos will initiate a Veldona clinical study in Taiwan for primary Sjogren’s syndrome in December 2024.
• This follows the announcement of an oral warts in HIV+ clinical study planned for November 2024. 

• Medicus Pharma Ltd. (TSXV:MDCX) is focused on acquiring or partnering with life-science companies that are developing novel therapeutics for unmet healthcare needs that are already in the clinical trial stage.
• Management plans fast-track these specific therapies through FDA clinical trials toward commercialization.
• The company’s first acquisition was SkinJect, which has a novel, patented transdermal patch for the treatment of BCC.

• The imagination brought to the market by Kelun’s traditional businesses (infusion business, antibiotics and bulk pharmaceutical chemicals, generic drugs) is not high. So, the only highlight is Kelun-bio’s ADC pipeline.
• Considering that Kelun has lost pricing power due to VBP, and both Chuanning and Kelun bio have been spun off and listed independently, Kelun’s valuation will not be too high.
• Our forecast is net profit attributable to shareholders in 2024-2026 is in the range of RMB3-5 billion. Reasonable market value is RMB30-50 billion. Subsidiary Kelun Bio is a better bet.

• On September 13, 2024, ESSA Pharma Inc. (EPIX) announced that updated dose escalation data for the ongoing Phase 1/2 clinical trial of masofaniten (EPI-7386) in combination with enzalutamide (Enz) was presented at the 2024 European Society for Medicinal Oncology (ESMO) Congress.
• With 15.2 months of follow up, neither the median radiographic progression free survival (rPFS) or time to PSA progression (TTPP) have been reached.
• Additionally, since the last trial update at ASCO-GU, one more patient has achieved PSA90, bringing the total to 14/16 (88%).

• AEMD has three sites in Australia that are moving towards near-term patient enrollment.
• In Australia, Royal Adelaide is ready for enrollment and Kinara is expected to be open for enrollment shortly.
• A third site in Sydney has submitted a request to be added to the study.

Basilea has bagged a multi-year agreement with the Biomedical Advanced Research and Development Authority (BARDA), potentially worth US$268m, to advance its anti-infectives franchise. The Other Transaction Agreement (OTA) will include an initial payment of US$29m to support clinical development work for fosmanogepix and BAL2062 as they prepare to enter the next phase of clinical development. The agreement will last up to 12 years and management expects it to cover 60% of its development costs related to the covered programmes over the period. These expected inflows have triggered another guidance upgrade for FY24 (revenue of CHF203m, from CHF196m previously) with a significant uptick in the bottom line on increased deferred taxes (net profit guided to be CHF60m vs CHF42m previously). We have adjusted our estimates to reflect the potential non-dilutive funding from BARDA, with our valuation increasing to CHF95.3/share, from CHF89.7/share previously.

• AEMD has three sites in Australia that are moving towards near-term patient enrollment.
• In Australia, Royal Adelaide is ready for enrollment and Kinara is expected to be open for enrollment shortly.
• A third site in Sydney has submitted a request to be added to the study.