Daily Brief Health Care: JMDC , Concord Healthcare Group, Hugel Inc, Oryzon Genomics and more

• When this was launched, it traded more a fair bit on the first day, but then more volume traded than I expected. This could mean a couple of things.
• Re-Reading the original doc leaves nuances. The change in management responsibilities this past summer make some holders less certain. It’s complicated. 
• There have been several blocks traded, and a large short instantiated. And if one has a more conservative estimate at a higher top-end participation, the back end gets uglier.

• Concord Healthcare Group (CHG HK)’s hospital business is not strong enough to contribute strong performance consistently, leading to unsatisfactory profit margin considering its weak hospital operation and management capability.
• The network business could face some legal risks based on our analysis. In the context of anti-corruption campaign in China healthcare, Concord’s business and patients flow could be affected.
• Together with potential policy risks such as DRGs/centralized procurement, we tend to be conservative about Concord’s outlook. In terms of valuation, Concord’s valuation should be lower than Inkon Life Technology.

• Hugel Inc (145020 KS) reported 28% YoY growth in both revenue and operating profit to KRW81.6B and KRW28B in 2Q23, respectively, driven by solid performance of botulinum toxins and fillers.
• Hugel has resubmitted marketing application for botulinum toxin in the U.S. for the third time, with approval expected in 1Q24. The U.S. is the world’s single largest botulinum toxin market.
• The company is seeing North America, Australia, New Zealand, and China as future growth engines to achieve its long-term target revenue of KRW1 trillion and operating profit margin of 45%.

Oryzon has announced that it has received two separate grants from the Spanish State Research Agency and the Ministry of Science and Innovation to conduct two different public-private collaboration projects. These two-year studies – the DICTIONIS Project (€0.95m budgeted cost) and the MODERN Project (€1.33m budgeted cost) – aim to discover and validate novel biomarkers and epigenetic targets for the treatment of neuronal pathologies. The grants give us confidence in management’s ongoing efforts and they complement its clinical activities for vafidemstat, its lead CNS asset, which is currently involved in two Phase II clinical trials: PORTICO (for borderline personality disorder) and EVOLUTION (for schizophrenia). Further, the grants have the potential to expand the company’s CNS portfolio, in our view.