Daily Brief Health Care: CRISPR Therapeutics AG, Edwards Lifesciences, Gilead Sciences, Bristol Myers Squibb Co, Cutia Therapeutics, OSE Immuno, Bio Techne Corp, MicroPort Cardiac Rhythm Management, Aft Pharmaceuticals and more

• CRISPR Therapeutics AG (CRSP US) completed regulatory submissions for exa-cel in the U.S., EU, and UK, positioning exa-cel to potentially become the first approved CRISPR-based therapy in the world.
• According to Evaluate Pharma, if approved, exa-cel’s revenue is expected to be $1B+ in 2028, with expected market share of 20% in sickle cell and 36% in beta thalassemia.
• As of March 31, 2023, CRISPR has cash, cash equivalents, and marketable securities of $1,889.5M, which is sufficient to fund its operating expenses for ~3 years.

• The last quarter proved to be a strong one for Edwards Lifesciences and its results exceeded market expectations in terms of revenues as well as earnings.
• While Japan faced lingering COVID impacts, strong growth was observed in the U.S., Europe, and the rest of the world.
• With a positive outlook, a strong pipeline, a raised sales expectation for the full year, and a commitment to innovation and clinical outcomes, the Edwards Lifesciences management intends to capitalize on the opportunities in the cardiovascular healthcare market.

• It was a mixed quarter for Gilead Sciences as the company’s revenues were above Wall Street expectations but it missed out on the earnings front.
• On the expense side, R&D expenses came in higher than anticipated, reflecting the company’s commitment to investing in research and development.
• We give Gilead Sciences, Inc. a ‘Hold’ rating with a revised target price.

• Bristol Myers had a mixed start to 2023 with below par revenues but its earnings exceeded analyst expectations as the management continues to accelerate the renewal of its portfolio and execute its strategy.
• During the quarter, the company’s new product portfolio and in-line brands grew.
• Revenue from its new product portfolio more than doubled as compared to the previous year.

• Majority of Cutia’s products are based on license-in/distribution agreements. Cutia’s independent R&D capability has yet to be proven. Stock prices of companies that completely rely on license-in are unsatisfactory.
• Cutia’s pipelines have unique characteristics. So, the requirements on team’s ability are comprehensive. Purely medical background of Cutia’s team could be a “hindrance” and may fail to commercialize them well.
• There is a real need in the fields Cutia is focusing on, so the story is compelling. However, with limited commercialized products, it’s difficult to prove anything at current stage.

OSE Immunotherapeutics has announced its FY22 results, providing financial and operational updates as the company continues to advance its key clinical assets. A confirmatory and potentially pivotal Phase III study is planned for Tedopi, OSE’s lead cancer vaccine candidate, which we expect to be initiated by end-FY23/early-FY24, and this would mark a significant clinical milestone, in our view. Additional upcoming catalysts for investor attention include readouts in Q423 for OSE-127, being investigated in a Phase II study in ulcerative colitis (UC). OSE-127 had previously been subject to a two-step licensing option granted to Servier. However, following negative readouts from a Phase II Servier-sponsored trial in primary Sjögren’s syndrome (SS), OSE and Servier have mutually decided to terminate the option license agreement. We value OSE at €280.8m or €15.2 per share, with Tedopi as the primary contributor to this valuation, for which we expect commercialisation in 2028.

• Bio-Techne had a weak quarter, with revenues below market expectations.
• Its revenue growth was not up to the mark despite the key drivers being physician uptake, utilization of its ExoDx prostate test, and increased demand for its cell therapy workflow solutions.
• Their Exosome Diagnostics business remained extremely strong in the quarter due to a better marketing message, a stronger commercial team, and the recently modified Medicare LCD, which generated significant test volume and revenue growth.

• MicroPort Cardiac Rhythm Management (1813053D CH) is looking to raise about US$200m in its upcoming HK IPO. The deal will be run by Goldman Sachs and CICC.
• Microport Cardiac Rhythm Management (MCRM) is a R&D-driven, commercial-stage medical technology company specializing in active implantable medical devices for cardiac rhythm management (CRM). 
• Its operations are dedicated to the design, development and commercialization of products and solutions to treat and manage arrhythmias and heart failure. 

AFT Pharmaceuticals reported another strong fiscal year, capping off three consecutive years of double-digit top-line growth. FY23 revenues of NZ$156.6m grew 20.2% year-on-year. As expected, top-line growth was H2 weighted, with a c 38% sequential improvement in H223 over H123 attributed primarily to new launches in Australia (revenue up c 61% over H123 in the region). Margins, however, were affected by lower licensing income and higher product launch marketing spend (operating margin of 12.6% vs 15.6% in FY22). We expect management to achieve the stated revenue target of NZ$200m in FY25, supported by higher marketing spends that will put some pressure on margins in the near term (FY24 operating profit guidance of NZ$22–24m). Management also announced a maiden dividend of 1.1c/share (payable in July 2023), although the payout (c 11%) is lower than the initial target of 20–30%. Accordingly, our valuation adjusts to NZ$644m or NZ$6.14/share from NZ$6.34/share previously.