Daily Brief Health Care: China Traditional Chinese Medicine, WuXi AppTec, Dr. Reddy’s Laboratories, Oryzon Genomics, Abbvie Inc, X4 Pharmaceuticals , Elanco Animal Health , HCA Healthcare, Inc. and more

• On 21 February, China Traditional Chinese Medicine (570 HK) announced a privatisation offer from the Sinopharm-led consortium at HK$4.60 per share, a 47.4% premium to the undisturbed price.
• The wide gross spread (7.0%) reflects risks around the re-rating of peers, the slow pace of satisfying the pre-condition, the completion timetable and Ping An’s blocking stake. 
• The key risk is the deal close timing due to the slow pace of regulatory approvals, which increases the chance that the vote will held after the August interim.   

• The growth of TIDES business slowed down, and revenue decreased QoQ despite increasing production capacity.As the main growth point of WuXi AppTec’s future performance, this is not a good signal.
• Due to BIOSECURE Act, US companies have been negotiating with other contract manufacturers so as to reduce reliance on WuXi AppTec.Let’s see the situation of new orders in following quarters.
• WuXi AppTec’s performance recovery is closely related to the pace of Fed’s interest rate cuts. From the perspective of growth outlook/macro environment/geopolitical conflicts, WuXi AppTec is still in “dangerous period”.

• Dr. Reddy’s Laboratories (DRRD IN) reported 13% revenue growth to INR71.1B in Q4FY24. EBITDA climbed 15% to INR18.7B, while net profit zoomed 36% to INR13.1B.
• North America revenue grew 29% YoY to INR32.6B, driven by increase in volumes of base business, contribution from new launches, integration of Mayne portfolio, partly offset by price erosion.
• After adjusting for brand divestment, revenue from India increased 11% YoY. Gross margin improved 140bps YoY and 10bps QoQ to 58.6%, due to better product mix and cost savings.

Oryzon’s Q124 results emphasised the company’s focus on advancing and expanding its CNS and oncology pipelines, driven by its core assets, vafidemstat and iadademstat. Operating performance was in line, with the lower opex (37% y-o-y decline to €3.2m) driven by reduced R&D spending following completion of the Phase IIb PORTICO trial. Notwithstanding the mixed PORTICO results in borderline personality disorder (BPD), we expect clinical activity to pick up in the coming months, with the initiation of the iadademstat combination studies in first-line AML (Phase Ib) and SCLC (Phase Ib/II) in Q224, and the planned end of Phase II (EoP2) meeting with the FDA in BPD. We also expect interim readouts from the Phase Ib FRIDA study in advanced AML (to be presented at the European Hematology Association conference in June this year). We keep our assumptions broadly unchanged and incorporate the latest net debt figure (€3.7m at end-Q124) in our estimates. Our valuation adjusts to €12.1/share.

• Leading pharmaceutical company AbbVie Inc. has outperformed expectations in its first quarter 2024 results.
• The financial results and current business outlook reflect the strength and momentum of AbbVie’s diversified pharmaceutical portfolio, which is projected to have long-term growth prospects.
• The company reported adjusted earnings per share of $2.31 and total net revenues of $12.3 billion, exceeding expectations by $400 million.

• On May 7, 2024, X4 Pharmaceuticals, Inc. (XFOR) announced financial results for the first quarter of 2024.
• The company will be hosting an investor event in June 2024 to present interim results from the ongoing Phase 2 trial of mavorixafor in chronic neutropenia (CN).
• The company has initiated the launch of XOLREMDI (mavorixafor) for use in patients 12 years of age and older with WHIM syndrome.

• Elanco Animal Health Inc is a leading global provider of pharmaceutical products for Companion Animals and Farm Animals
• Stock has declined around 50% since early 2020 due to challenges such as the Covid pandemic and disappointing guidance for FY 2022
• Activist engagement from Sachem Head and a stock price trading at a wide discount to peers make Elanco an intriguing investment opportunity for those willing to weather industry turbulence

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.

• HCA Healthcare, one of the largest U.S. health systems, has shown robust quarterly results backed by sustained fundamentals in their business.
• The momentum primarily results from broad-based volume growth, improved payer mix, and healthy operating margins.
• While HCA Healthcare generally presents a promising outlook for the rest of the year, the management underscores uncertainties that diverse risks may pose.