Daily Brief Health Care: ImmuneOnco Biopharmaceuticals (Shanghai), EMIS Group PLC, Shionogi & Co, Respiri Ltd, Astrazeneca Plc Spons Adr, OpGen , Bristol Myers Squibb Co and more

• ImmuneOnco’s execution/R&D efficiency is far from satisfactory. After about seven years since the establishment in 2015, there are no candidates entering phase III trials or close to market launch.
• The biggest concerns are druggability and safety profile of CD47-targeted candidates. There could be potential R&D failure risks. The pipeline layout around CD47 also makes it hard to diversify risks.
• It’s challenging for ImmuneOnco Biopharmaceuticals (Shanghai) (IOB HK) to hit high-quality license-out deals with reputable big pharma, leading to uncertainties on internationalization. We’re conservative about the outlook. 

• The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final decision to be published on 5 October.
• The Court sanctioning could take place on 16 October. The scheme would become effective on 17 October. Assuming settlement by 31 October, spread is 0.99%/4.81% (gross/annualised).
• Assuming a break of 1,292p, the market is pricing a 97% probability of deal completion (vs. 6% by 15 June).

• In Q1FY24, Shionogi & Co (4507 JP) recorded 52% YoY revenue growth to ¥109B, reflecting a one-time payment received for the transfer of co-development and co-commercialization license for ADHD drugs.  
• Shionogi has reiterated FY24 guidance. The company expects FY24 revenue of ¥450B (up 6% YoY), operating profit of ¥150B (up 1% YoY), and net profit of ¥155B (down 16% YoY).
• Despite competition, Xocova captured a 60% market share of the treatment group patients in Japan. Over a six-month period since emergency approval, more than 70K patients have used Xocova.

Following the proposed acquisition of Access Managed Services in May 2023, Respiri announced that it has raised the A$3m as planned as part of the share purchase plan (SPP), which we believe are the funds needed to close the acquisition (10 August scheduled closing date). The company has raised a total of A$4.35m (including a convertible note with Obsidian Global) to cover the upfront payment (US$1.25m) for the acquisition, working capital to accelerate US commercialisation and the US$0.25m acquisition purchase consideration due three months post-close. Also, in Q423 (ending June 2023), Respiri signed three new remote patient monitoring (RPM) agreements, increasing the total contracted healthcare customers to 13 (across eight US states), while also bolstering its sales pipeline. The acquisition of the Access platform is a key component of management’s commercialization strategy and we anticipate Respiri to be on track to reach break-even in mid-CY24.

• AstraZeneca PLC managed to exceed analyst expectations in terms of revenue and earnings.
• The first half of the year saw a rise in total revenue.
• We give AstraZeneca PLC a ‘Hold’ rating with a revised target price.

Despite the active second quarter with developments across all operational fronts, OpGen’s cash concerns have increased the risk of the company as a going concern. With a cash balance of $3.2m at end Q223, OpGen has a cash runway into September 2023, meaning the need for immediate financing will be critical. Key quarterly highlights included the extension of the FIND R&D collaboration, a non-exclusive distribution agreement with Fisher Healthcare and new commercial contracts for both Unyvero and ARES services. While topline growth was a little subdued year-on-year due to one-off income in Q222, the operating loss for the period slightly improved to $5.2m (vs $5.3m in Q222), reflecting tighter cost controls and low clinical activity. If management is able to bridge the funding gap, its efforts in building the commercial groundwork could benefit the second half of the year across Unyvero, Acuitas and ARES. Due to the funding announcement, we have put our estimates and valuation on hold and will reassess as financing updates become available.

• Bristol-Myers Squibb’s results were a major disappointment as the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
• The second quarter’s total company sales were boosted by the sustained strength of its in-line and new product portfolio.
• Several of their major products throughout the portfolio, including Reblozyl, their cell treatments Breyanzi and Abecma, as well as Camzyos and Zeposia, were responsible for this impressive result.