In today’s briefing:
- Classys (214150 KS): Record-High Sales and Profit in 2022; Geography Expansion to Accelerate Growth
- Fresenius Medical Care (FME GR): Look Before You Leap; Uncertainty & Cost Pressure Continue to Bite
- Basilea Pharmaceutica – Profitability sooner than expected
- Cardinal Health Inc: Major Drivers
- Gilead Sciences Inc.: Advancement In Autoimmune Immunotherapy Pipeline & Other Drivers
Classys (214150 KS): Record-High Sales and Profit in 2022; Geography Expansion to Accelerate Growth
- Classys (214150 KS) reported strong performance in 2022, with highest ever revenue and profit, driven by increased sales of equipment and consumables due to increased global awareness of major products.
- Revenue from export recorded a CAGR of 30% during 2017–2022, mainly driven by strong growth in Brazil. Classys launched Shrink Universe in Korea and Ultraformer MPT in global market.
- For 2023, Classys has guided for revenue of KRW170B (+20% YoY), driven by Shrink Universe’s expansion into the global market, full-fledged domestic sales of Volumemers, and increasing volume of consumables.
Fresenius Medical Care (FME GR): Look Before You Leap; Uncertainty & Cost Pressure Continue to Bite
- Fresenius Medical Care Ag & Co (FME GR) is reporting decelerating organic revenue growth and earnings decline. The company has revised 2022 revenue and earnings guidance twice in last year.
- Earnings are heavily impacted by the unprecedented US labor market situation constraining capacity and accelerating wage inflation, and worsening macroeconomic environment driving cost inflation and supply chain disruptions.
- For 2022, the company expects low single-digit percentage revenue growth and high teens to mid-twenties percentage decline in net income. CEO has stepped down within two months of taking charge.
Basilea Pharmaceutica – Profitability sooner than expected
Basilea reported strong FY22 results following the successful execution of its strategic realignment to focus on anti-infectives. The top-line beat (c 21% ahead of the top end of guidance) was driven by accelerating global uptake of its marketed assets, primarily Cresemba, which recorded 22% year-on-year growth in royalties (to CHF65m). In combination with the receipt of milestone payments, lower-than-expected operating expenses and the sale of oncology assets, management was able to achieve profitability (FY22 net profit of CHF12.1m) a year earlier than anticipated. As Cresemba peaks, we expect additional support to come from the successful US launch of Zevtera (NDA expected in March/April 2023) and the introduction of novel late pre-clinical/clinical anti-infective assets in Basilea’s development pipeline. Our updated valuation is CHF785m or CHF65.7/share (previously CHF921.7m or CHF77.8/share), reflecting our revised estimates and the recent sale of oncology assets, partially offset by lower net debt (CHF46.7m at end-FY22) following repayment of the 2022 convertibles.
Cardinal Health Inc: Major Drivers
- Cardinal Health, one of the largest wholesalers of the healthcare industry in the U.S., continued its strong performance in the last quarter and managed to deliver an all-around beat.
- Cardinal Health’s total revenue has increased by 13% in the last quarter, and the gross margin increased by 3%, driven by the Pharma segment.
- There was an increasing overall pharmaceutical demand and a strong performance from the Generics programs.
Gilead Sciences Inc.: Advancement In Autoimmune Immunotherapy Pipeline & Other Drivers
- Gilead had a very strong quarter with solid growth in each of its core franchises and across all geographies led by oncology and HIV.
- In the U.S., Sunlenca received its foremost approval for heavily treatment-experienced adults having multidrug-resistant HIV infection.
- The company continues to add further programs, including its new preclinical candidate to collaborate with lenacapavir for its long-acting HIV treatment programs.
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