Daily Brief Health Care: Capitol Health, Takeda Pharmaceutical , Top Glove Corp and more

In today’s briefing:

Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): An Improved Image
Additional Points Add to Our Recent Bearish View on Takeda.
Top Glove Corp (TOPG MK): Volume and ASP Growth Achieved in 3QFY24; Sees Higher Global Demand Ahead

Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): An Improved Image

Diagnostic imaging provider Capitol Health (CAJ AU) has announced it has entered into a process deed with Integral Diagnostics (IDX AU)
This non-binding indicative Offer, by way of a Scheme, involves 0.12849 new IDX shares for each share of Capitol. The next step is four weeks of two-way confirmatory due diligence.
The implied Offer Price under the scrip terms is A$0.3284/share. Should the transaction complete, Integral would hold 63% in the combined group. This is the second Integral/Capitol merger attempt.

Production problems of Vyvanse generics seem to be largely resolved with nine of the ten suppliers back in stock.
Safety concerns with Takeda’s approved psoriasis competitor does raise further concerns as they are both TYK-2 inhibitors.
The company’s $900 m big restructure and cited areas for margin improvement are not “convincing” and lack detail.

Top Glove Corp (TOPG MK) achieved 16% QoQ revenue growth in 3QFY24, on 13% sequential volume increase and higher ASP. 3QFY24 operational loss reduced to RM34M from RM59M in 2QFY24.
Considering the current demand and supply condition, Top Glove expects the ASP to further increase. The company aims to recover its EBITDA margin to pre-pandemic levels of 15% by FY26.
With rising import alert and expected tariff increase on Chinese manufacturers, the US demand may shift from China to Malaysia. Top Glove is poised to benefit from potential trade diversion.

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