Daily Brief Health Care: Healius, Bionote, Takeda Pharmaceutical, Newron Pharmaceuticals and more

• Australian Clinical Labs (ACL AU) has announced its intention to make an off-market takeover for Healius (HLS AU) offering 0.74 ACL shares for each Healius share.
• The offer represents a nil-premium merger and if successful will result in current Healius (HLS AU) shareholders owning 68% of the merged company.
• The offer is a big discount to longer-term VWAPs. We don’t expect shareholders will tender and Australian Clinical Labs (ACL AU) will need to sweeten the offer.

• Australian Clinical Labs (ACL AU) has launched an all-scrip off-market takeover offer for Healius (HLS AU) at 0.74 ACL shares for each HLS share.
• The offer is saddled with several onerous conditions which disproportionately shift the risk to HLS shareholders. The offer is long-dated as ACCC approval is expected to take six months.
• The lack of premium and unattractive deal metrics suggests a high probability of Board rejection. Nevertheless, ACL’s bid underscores HLS’s beaten-down valuation. Expect improved terms.

• Australian Clinical Labs (ACL AU) has announced a merger proposal for Healius (HLS AU), the completion of which would create Australia’s largest pathology provider.
• ACL is offering 0.74 new shares for each share in Healius. Healius shareholders will hold 68% of the enlarged entity, with ACL shareholders holding 32%.  
• The Offer is conditional on a 90% minimum acceptance condition and regulatory approvals (ACCC and FIRB). Healius’ board is evaluating the Offer. 

• Bionote (377740 KS) was listed on 22nd Dec 2023, when it raised US$73m in its downsized Korean IPO. Its three-month lockup will expire on 21st Mar 23.
• Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products.
• Coming up for three-month lockup expiry are the firm’s three pre-IPO investors, together with Gunwoo Ha (ex-CEO). The three pre-IPO investors had earlier trimmed their respective stakes in the IPO.

• Takeda Pharmaceutical (4502 JP)  revealed over the weekend that experimental drug TAK-279 (acquired from Nimbus) for psoriasis is showing positive results suggesting it could become the best of its type.
• On the other hand, Takeda’s dengue vaccine Qdenga has been granted approval in Brazil, a country with high prevalence of dengue.
• Takeda’s top selling drug Entyvio’s exclusivity in the US will end in 2026 and the company continues to see strong progress with its development pipeline and M&A deals.

Newron has released its annual report and provided an operational overview for evenamide as a potential schizophrenia therapy. Positive interim data for the Phase II (study 014/015, in treatment-resistant schizophrenia, TRS) was shared in Q123 with similar results demonstrated in the full/top-line six-week data for all enrolled patients (released on 20 March 2023). The Phase III (study 008A, for patients on antipsychotics but not with TRS) is ongoing; results are expected in H223. Newron is preparing another Phase III (study 003 in TRS), which it plans to initiate in 2023. We believe positive results from these trials would represent the most significant near-term catalysts. At end December 2022, Newron had a total cash and liquid asset position of €22.8m, which we estimate will provide a cash runway into 2024. We value Newron at CHF128.7m or CHF7.2/share (previously CHF113.9m or CHF6.4/share).

Newron Pharmaceuticals has announced positive top-line results from its Phase II trial (study 014) assessing evenamide, a glutamate modulator, as an add-on therapy to antipsychotics in moderate-to-severe treatment resistant schizophrenia (TRS). While detailed data (for the full 161 patient cohort over the six-week treatment period) have not been disclosed, management asserts that the results were similar to the six-week interim safety and efficacy data from the first 100 patients reported in June 2022. Newron intends to begin a potentially pivotal multinational Phase III study (study 003) in TRS patients (expected to start in H223) and, in our view, its initiation represents a future catalyst for investor attention. We anticipate that the 52-week results from the full evenamide extension study (study 015) in Q124, if positive, will further enhance the existing evenamide data package and support future regulatory discussions.