Daily Brief Health Care: Ono Pharmaceutical, China Traditional Chinese Medicine, Edwards Lifesciences, Paradigm Biopharmaceuticals and more

• Ono Pharmaceutical (4528 JP) recorded 13% YoY revenue growth to ¥120B in Q1FY24, driven by 12% YoY growth in product revenue. Royalty revenue grew 14% YoY.
• Revenue from Opdivo grew 11% YoY to ¥37.8B, due to expanded use in treatments for gastric cancer, esophageal cancer, urothelial carcinoma, etc. Revenue from Forxiga grew 34% YoY to ¥17.5B.
• For FY24, Ono continues to expect revenue growth of 6% to ¥475B. Operating and net profits are expected to increase 8% and 2% to ¥153B and ¥115B, respectively, for FY24.

• The rebound of China TCM’s performance in 23H1 could be mainly driven by its core concentrated TCM granules business as well as the recovery of other businesses after China reopens. 
• We analyzed the potential performance changes that may occur in 23H2. The full year performance of 2023 will be worth looking forward to. We expect the share price to rebound.
• TCM VBP is always an issue. Due to the high base in 2023, the YoY performance growth in 2024 could decline, which may put pressure on valuation at that time. 

• Edwards Lifesciences Corporation managed to exceed analyst expectations in terms of revenue as well as earnings.
• It achieved double-digit sales growth in the quarter driven by increased adoption of its innovative therapies.
• The second quarter TAVR sales were helped by improved hospital staffing levels as well as the continued successful launch of the SAPIEN 3 Ultra RESILIA.

Paradigm has shared its June 2023 quarterly update. In Q423, net cash outflow from operating activities was A$17.1m (up from A$10.3m in Q323) or A$45.2m for FY23. R&D costs were A$16.1m (versus A$9.0m in Q3) or A$47.0m for FY23, and were attributed to recruitment initiatives and new site identification for the PARA_OA_002 trial, analytical activities for the PARA_OA_008 trial as well as the canine model studies of naturally occurring osteoarthritis (OA), and clinical activities assessing iPPS for mucopolysaccharidosis (MPS) types I and VI. The full year figures were partially offset by a A$7.4m R&D tax incentive rebate (reported in Q223). Paradigm reported a cash balance of A$56.4m at end-June 2023 (versus A$73.2m at end-March 2023). Assuming the cash burn rate remains at the FY23 level of A$45m, the company should have sufficient funds to bring it through near-term key inflection points, as described below.