Daily Brief Health Care: China Traditional Chinese Medicine, Ilooda, Dr. Reddy’s Laboratories, Knight Therapeutics, OSE Immuno and more

• Just plain ugly. China Traditional Chinese Medicine (570 HK) (“TCM”) fell 11.7% yesterday. It’s down another 7.9%, on large volume, as I type.  The stock is now ~35% below terms
• Depending on who you talk to, the sudden move was triggered by a couple of event pods dumping stock; or the incoming CNPGC chairman is not supportive. Or perhaps both. 
• Since rumours surfaced early Feb as to an Offer, a basket of TCM’s peers are up 8% on average. The HSI is up 15%. TCM’s downside from here appears limited.

• The spread is appealing, and Classys’ shorting instrument’s liquidity issue shouldn’t be critical with a manageable position size. The concern is shareholder approval and the stock purchase cost under ₩30B.
• Despite cancellation risks, there are reasons to stay interested. Bain Capital aims to merge with Ilooda to boost Classys’ valuation, suggesting the merger may proceed even if ₩30B is exceeded.
• The deadline for dissenting votes and appraisal rights at Ilooda’s meeting is July 8th, ex-rights date July 9th. Shareholders’ meeting: August 13th; rights exercise: August 13th to September 2nd.

• Dr. Reddy’s Laboratories (DRRD IN) has signed a definitive agreement with Haleon (HLN LN) to acquire latter’s global portfolio of consumer healthcare brands in the nicotine replacement therapy outside US.
• The company will acquire the portfolio for a total consideration of £500M ($633M). In 2023, the portfolio generated ~£217M ($274M) revenue. Purchase consideration values the business at EV/sales of 2.3x.
• The acquisition will not stretch the balance sheet as Dr. Reddy’s has a cash balance of $990M as on March 31, 2024. The transaction is expected to complete in 4Q24.

• Knight Therapeutics is a specialty pharmaceutical company based in Montreal with operations in Canada and Latin America
• Founded in 2014 by Jonathan Goodman and currently led by Samira Sakhia
• Focuses on acquiring, in-licensing, marketing, and distributing pharmaceutical specialty products without conducting clinical research activities, with an EV of $430M and a market cap of $530M

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.

OSE Immunotherapeutics has entered into a commercial and revenue sharing agreement with the Memorial Sloan Kettering Cancer Center (MSK), focused on chimeric antigen receptor (CAR)-T cell therapies. OSE and MSK were already engaged in an ongoing research collaboration for a preclinical non-antagonist interleukin-7 receptor (IL-7R) monoclonal antibody to be used either as a therapeutic or for the design of CAR-T cell therapies. The new agreement specifically covers patent rights for CAR-T cell therapies targeting IL-7R expressing cancers. While precise details have not been disclosed, MSK will assume responsibility for research, development and commercialisation, and will share future potential revenue with OSE. Management also provided an update on the recent progress of its messenger RNA (mRNA) platform, highlighting the potential of an mRNA therapeutic using lipid nanoparticles in autoimmune hepatitis. OSE announced a series of partnerships in recent months that provide external validation of its capabilities in developing innovative therapies across various modalities for indications with unmet medical needs.