Daily Brief Health Care: Kaken Pharmaceutical, Dong E E Jiaoco Ltd A, Aspira Women's Health and more

In today’s briefing:

Kaken Pharmaceutical (4521 JP): Key Operating Parameters Weakened in H1; H2 Not Seem to Be Better
Dong E E Jiao Co Ltd (000423.CH) – The Situation Is Getting Better and Better
Aspira Women’s Health, Inc. – Secures Important Reimbursements

Kaken Pharmaceutical (4521 JP): Key Operating Parameters Weakened in H1; H2 Not Seem to Be Better

Kaken Pharmaceutical (4521 JP) reported 2% YoY decline in revenue H1FY24, while operating profit decreased 33% YoY. Top selling products are impacted by NHI drug price revision and increasing competition.
The company has reiterated FY24 guidance of flat revenue, 5% YoY decline in operating profit, and 23% YoY growth in net profit. Profitability is expected to deteriorate in H2.
Kaken is not expected to see any immediate respite as the small contribution from the new products will not compensate for the revenue loss from its top selling products.

Some investors are disappointed with 23Q3 performance, but we think Dong-E-E-Jiao is getting back on track. The de-stocking has achieved great results and pressure on distribution channels has been alleviated.
Since Dong-E-E-Jiao’s contract liabilities hit a record high, we are optimistic about the performance in 23Q4 and 24Q1. China Resources could further improve Dong-E-E-Jiao’s dividend rate, making it more attractive.
Since Dong-E-E-Jiao’s performance is continuously improving, valuation still has room to grow. A significant increase in valuation in the short term depends on whether there would be M&A deal emerges.

Aspira Women’s Health made two reimbursement announcements this week.
On November 27, Aspira announced that the Centers for Medicare and Medicaid Services (CMS) approved the crosswalk of the fee to be paid to the company for OvaWatch to the fee paid historically for Ova1.
Aspira will be reimbursed at a rate of $897 for all OvaWatch and Ova1 tests processed for Medicare patients meeting applicable coverage requirements beginning on January 1, 2024.

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