Daily Brief Health Care: Emcure Pharmaceuticals, UMP Healthcare, EC Healthcare, New Horizon Health , Oryzon Genomics, BioNTech and more

• Emcure Pharmaceuticals raised around US$240m in its India IPO. Subscription rates were strong.
• Emcure Pharmaceuticals (EP) is an Indian Pharmaceutical company engaged in the developing, manufacturing and globally marketing a broad range of pharmaceutical products across several major therapeutic areas.
• We have looked at the company’s past performance in our earlier note. In this note, we talk about the trading dynamics.

• The company announced a settlement with its subsidiary of 18 mn HKD. This is material as we estimate that core profit for FY24 (June-end) would be 30-35 mn HKD. 
• This settlement will be paid in cash (tranches) as it involves making the company whole on a vendor’s profit guarantee shortfall. It boosts cash and investments >340 mn HKD. 
• The stock is cheap, with net cash almost equal to the market capitalization, an 11x PE (on core profit), and a 9% dividend yield. 

• EC Healthcare (2138 HK) reported muted FY24 result. While revenue increased 9% YoY to a record high of HK$4.2B, EBITDA and net profit declined 10% and 85%, YoY, respectively.
• The reopening of borders saw a slower-than-anticipated recovery in revenue from Chinese Mainland medical tourism. The prevailing high interest rate, inflationary pressure, and economic uncertainties have made the operations challenging.
• EC Healthcare shares plunged ~70% over the last one year. Although the company has long-term growth drivers and margin levers, there is short-term uncertainties over financial performance improvement.

• New Horizon Health is a “big client” of Deloitte, who, however, still delay the publication of 2023 results. This leads us to take the issues raised by Deloitte more seriously.
• It’s uncertain whether New Horizon Health would obtain the audit report with non-qualified opinion or “survive” the independent investigation.2023 Annual Report/2024 Mid-Year Report/2024 Annual Report may continue to be postponed.
• If New Horizon Health fails provide reasonable explanation, investors don’t need to spend any more time on the Company with no integrity.We forecast the timetable for the resumption of trading.

Oryzon Genomics continues to fortify its IP profile for vafidemstat, which is being developed for borderline personality disorder (BPD) and for the potential application to attention deficit hyperactivity disorder (ADHD). Oryzon has received positive acceptance decisions for two incremental patent applications from the Japanese Patent Office (JPO), which should provide protection until 2040 (excluding potential extensions). Oryzon was also notified of similar patent grants from the European and Korean patent offices, which may extend the drug’s exclusivity in those jurisdictions. Oryzon is advancing its lead CNS asset towards an end-of-Phase II (EoP2) meeting with the FDA to discuss a potentially registrational Phase III trial in BPD. Vafidemstat already holds composition of matter patents in the US and EU providing protection up to 2037 and 2036, respectively.

• BioNTech’s First Quarter 2024 Earnings Call highlighted a strategic focus on their late-stage oncology pipeline and continued initiatives surrounding their COVID-19 vaccine offerings.
• The company’s advancement in multiple pivotal Phase III clinical trials, primarily in oncology, and preparation for upcoming new strains of COVID-19 vaccines suggests a pivotal transformation period.
• Positively, BioNTech’s progression in oncology is notable with its comprehensive approach of integrating multiple therapeutic solutions.