Daily Brief Health Care: Kelun Biotech, Apollo Hospitals Enterprise, Viatris, Zoetis Inc, Actinogen Medical, Davita Healthcare Partners and more

• Kelun-Biotech, a China-based integrated innovative biopharmaceutical company, plans to raise up to US$400m via a Hong Kong listing.
• In our previous note, we examined the company’s two core products, namely SKB264, a TROP2-ADC, and A166, a HER2-ADC.
• In this note, we will provide a valuation for the company’s key products.

• Apollo Hospitals Enterprise (APHS IN) reported a 21% YoY growth in revenue in Q4FY23, mainly driven by 31% and 18% revenue growth in Apollo HealthCo and hospital business, respectively.
• For FY24, Apollo expects HCS segment revenue growth at 15% YoY, mainly driven by higher occupancy. The company aims to improve hospital occupancy to 70% by the end of FY24.
• Apollo 24/7 business is on track to achieve breakeven at an entity level in Q4FY24. GMV of Apollo 24/7 is expected to be double in FY24 compared to FY23 level.

• Viatris’ results were a major disappointment as the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
• The company achieved decent results in developed markets, with a full European version driven by critical brands and generics.
• The company expects mid-single-digit growth in this segment, primarily driven by the brand category.

• Zoetis delivered a mixed set of results for the previous quarter with revenues well below analyst expectations but managed an earnings beat.
• While revenues from companion animal products were flat operationally, their livestock portfolio led to the results with a 12% operational gain in revenue.
• Zoetis’ team anticipates flat operational growth in its cattle portfolio and double-digit operational growth for its cutting-edge companion animal portfolio.

Actinogen intends to start patient enrolment and dosing in H2 CY23 in the Phase IIb XanaMIA study portion assessing Xanamem in lead indication Alzheimer’s disease (AD). The company expects to receive FDA approval in the coming weeks on amendments to the study design protocol and the new Xanamem tablet formulation to be used (replacing the capsule used in prior Xanamem trials). It expects to report top-line efficacy data in H2 CY25, with interim readouts projected in or around late CY24 or early CY25. We believe market participants will be keen to observe whether this study, which prospectively enrols patients with elevated pTau, will confirm the positive findings shown in a subset biomarker analysis from the earlier XanADu study. Positive Phase IIb data could introduce the possibility of material out-licensing or value realisation opportunities, in our view.

• Despite the management’s cautious approach and uncertainties surrounding treatment volume and the labor market, DaVita performed well and delivered an all-around beat in the most recent quarterly result.
• One of their long-term strategies is to connect transitions of care through solutions for patients in the Kidney Care continuum.
• Financially, the company delivered solid results in the first quarter, with adjusted operating income and earnings per share exceeding expectations.