Daily Brief Health Care: Hugel Inc, Terumo Corp, Iqvia Holdings, CanSino Biologics Inc, Sipai Health Technology, Aft Pharmaceuticals and more

• Korea FSC will accept financial institutions’ LOC and LPs’ investment performance agreements as certifying documents for securing funds. This revision will be effective right from April 1 this year.
• The impact from a preemptive trading perspective is likely to be significant. Additional stake purchases through tender offers will increase more aggressively, particularly when purchasing shares from the majority shareholder.
• We should first pay attention to companies where private equity (PE) is the largest shareholder whose stake is relatively low (less than 50%): Hugel, Hana Tour Service, & Hanssem

• Terumo Corp (4543 JP) raised FY23 revenue guidance due to greater than expected depreciation of Yen. However, excluding Fx, revenue growth expectation has been lowered to 5% from 6% earlier.
• New guidance implies Q4FY23 revenue of ¥197B (-8% QoQ) and operating profit of ¥28.5B (-24% QoQ). Terumo assumed exchange rate of ¥130/USD for Q4FY23, similar level realized in Q1FY23.
• Terumo has reduced FY23 operating and net profit guidance by ¥10B and ¥8.5B, respectively due to higher-than-expected inflation. Excluding Fx, operating profit is expected to decline 2% in FY23.

• IQVIA Holdings is an global healthcare-tech major providing services to the clinical research and health information technology sectors.
• In partnership with Tasso, they have launched the first self-collection safety lab panel for clinical trial participants in the United States, enhancing their decentralized clinical trial capabilities.
• Our focus is on analyzing the financial strength and the debt servicing capability of the company and the analysis does not differentiate among debt instruments.

• The investment logic of vaccine companies is different that of biotech. Generally speaking, vaccine companies cannot develop to large scale without successfully betting on big vaccine varieties.
• The most fatal problem of CanSino is that there’re no other blockbuster varieties except COVID-19 vaccine. So, either CanSino develops a big variety,or it would gradually enter a vicious circle.
• CanSino’s current valuation is at a low level. Even with many negative factors, that doesn’t mean CanSino’s stock price won’t rebound. 

• This is our first report on an IQVIA Holdings, an international player providing services to the clinical research and health information technology sectors.
• IQVIA expanded access to clinical research.
• We initiate coverage on the stock of IQVIA Holdings Inc. with a ‘Buy’ rating.

• The sustainability/stability of Sipai’s performance and growth potential are worrying. Sipai doesn’t have a business with core competitiveness as its foundation, thus leading to potential problems in its business model.
• It is useless to have fast revenue growth because Sipai’s profitability is very weak, which is actually closely related to its business characteristics. Sipai is far from being breakeven.
• Sipai is overvalued. Such high valuation is not reasonable based on our analysis. We are conservative about Sipai’s outlook and we think there are much better investment opportunities.

AFT Pharmaceuticals (AFT) has announced that it has signed three additional licensing agreements for Maxigesic IV – with Labatec in Switzerland and Pharma Bavaria in Argentina and Paraguay. The product franchise continues its international expansion, with the deals following the recent launches of Maxigesic IV in five European countries. To date (FY23, ending 31 March) AFT’s flagship product, Maxigesic, is available in 61 countries (across all dose forms), up 15 from the prior year. This is marginally lower than the target of 63 countries for FY23, but the company also announced achieving its first product registration in China with Crystawash Extend, its long-lasting sanitiser. China launches are generally highly sought after, and this announcement should provide access to the larger offline retail and hospitals segments (c 75% of the over-the-counter (OTC) market in China). Currently AFT only has an online retail presence in China (under the Cross Border E-Commerce OTC scheme).