Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

<ul>
<li>Heartflow Inc., a commercial-stage medical technology company that has pioneered the use of software and AI for diagnosing and managing CAD, is expected to IPO this week.</li>
<li>Heartflow is marketing the sale of ~16.7M shares at $17-$18 per share in upsized initial public offering in the United States.</li>
<li>I believe current IPO valuation range appears to capture much of the near- to mid-term upside potential. Moreover, I’m concerned about the lack of profitability and mounting losses.</li>
</ul>


Heartflow Inc., a commercial-stage medical technology company that has pioneered the use of software and AI for diagnosing and managing CAD, is expected to IPO this week.
Heartflow is marketing the sale of ~16.7M shares at $17-$18 per share in upsized initial public offering in the United States.
I believe current IPO valuation range appears to capture much of the near- to mid-term upside potential. Moreover, I’m concerned about the lack of profitability and mounting losses.


Heartflow IPO: Mounting Losses, ~99% Revenue Concentration From a Single Product

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

<ul>
<li>After an IPO attempt two years ago, Mirxes filed an updated prospectus in an attempt to raise at least US$100m via a Hong Kong listing.</li>
<li>In our previous note, we analyzed its product pipelines and highlighted signs of commercialization challenges.</li>
<li>In this note, we note that the company expanded its clinical trial plans. Yet, more data shows that blockbuster-level uptakes are unlikely given the profile of its clinical data.</li>
</ul>


After an IPO attempt two years ago, Mirxes filed an updated prospectus in an attempt to raise at least US$100m via a Hong Kong listing.
In our previous note, we analyzed its product pipelines and highlighted signs of commercialization challenges.
In this note, we note that the company expanded its clinical trial plans. Yet, more data shows that blockbuster-level uptakes are unlikely given the profile of its clinical data.


Mirxes Pre-IPO: Challenges for Mass Adoption Become Clearer

Equity Bottom-Up

<ul>
<li>GRAIL shares outperformed the market in 2025 with shares up ~168% year-to-date vs. a modest ~3% gain on the Nasdaq Composite.</li>
<li>Most notably, management disclosed that Quest Diagnostics and TRICARE Health Insurance expanded their relationships with GRAIL.</li>
<li>A fast-growing healthcare company reported FY24 revenues of ~$126M, up ~35% year-over-year, and ended 4Q’FY24 with ~$767M of cash and cash equivalents.</li>
</ul>


GRAIL shares outperformed the market in 2025 with shares up ~168% year-to-date vs. a modest ~3% gain on the Nasdaq Composite.
Most notably, management disclosed that Quest Diagnostics and TRICARE Health Insurance expanded their relationships with GRAIL.
A fast-growing healthcare company reported FY24 revenues of ~$126M, up ~35% year-over-year, and ended 4Q’FY24 with ~$767M of cash and cash equivalents.


GRAIL’s 4Q’FY24 Financial Results: The Company Is On Track To Complete FDA/PMA Submission In FY26

<ul>
<li>I expect GRAIL shares will appreciate over time as investors gain greater conviction in one of the most meaningful opportunities in healthcare.</li>
<li>A fast-growing maker of MCED screening tests reported ~46% sales growth of Galleri tests in 2024. Commercial Galleri sales surpassed 250K tests since launch.</li>
<li>At ~0.5x EV/2025E revenues, GRAIL shares trade at a significant discount to Guardant Health and Tempus AI. GRAIL shares appreciated ˃100% from October 4, 2024.</li>
</ul>


I expect GRAIL shares will appreciate over time as investors gain greater conviction in one of the most meaningful opportunities in healthcare.
A fast-growing maker of MCED screening tests reported ~46% sales growth of Galleri tests in 2024. Commercial Galleri sales surpassed 250K tests since launch.
At ~0.5x EV/2025E revenues, GRAIL shares trade at a significant discount to Guardant Health and Tempus AI. GRAIL shares appreciated ˃100% from October 4, 2024.


GRAIL: Significant Sales Growth of Galleri Test and The Increase in 2025 Revenue Guidance

<ul>
<li>In June of 2024, GRAIL, a market leader in early cancer detection, spun off from Illumina into an independent publicly traded company.</li>
<li>Following the spin-off, Illumina retains up to ~15% ownership interest in GRAIL and continues to fund GRAIL’s operations and R&amp;D with disposal funding of ~$974M.</li>
<li>I view GRAIL as a market leader in the MCED testing market and uniquely positioned to be very effective in detecting some of the most aggressive early-stage cancers.</li>
</ul>


In June of 2024, GRAIL, a market leader in early cancer detection, spun off from Illumina into an independent publicly traded company.
Following the spin-off, Illumina retains up to ~15% ownership interest in GRAIL and continues to fund GRAIL’s operations and R&amp;D with disposal funding of ~$974M.
I view GRAIL as a market leader in the MCED testing market and uniquely positioned to be very effective in detecting some of the most aggressive early-stage cancers.


GRAIL: Detecting Early-Stage Cancers With Galleri Test, A Significant Market Opportunity

United States

Guardant Health, Inc. operates as a biotechnology company. The Company provides sequencing and cell diagnostics services for the cancer patients. Guardant Health serves patients worldwide.

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Guardant Health (GH US)

Heartflow IPO: Mounting Losses, ~99% Revenue Concentration From a Single Product

Heartflow Inc., a provider of AI-powered scalable software platform for diagnosing and managing CAD, set to IPO this week. In my insight, I...

Andrei Zakharov

Mirxes Pre-IPO: Challenges for Mass Adoption Become Clearer

Mirxes files updated prospectus for Hong Kong listing, expanding clinical trial plans but facing challenges in achieving blockbuster-level success.

Ke Yan, CFA, FRM

GRAIL’s 4Q’FY24 Financial Results: The Company Is On Track To Complete FDA/PMA Submission In FY26

In my insight, I discuss GRAIL’s 4Q’FY24 financial results, outline key revenue growth drivers and update my financial model.

Andrei Zakharov

GRAIL: Significant Sales Growth of Galleri Test and The Increase in 2025 Revenue Guidance

GRAIL shares have materially outperformed Nasdaq and peers. The stock has bottomed in the low $13s and gained more than 100%. I see further room...

Andrei Zakharov

GRAIL: Detecting Early-Stage Cancers With Galleri Test, A Significant Market Opportunity

GRAIL, a fast-growing Galleri test maker, spun off from Illumina in June. The population-scale MCED screening test identifies 50+ types of cancer...

Andrei Zakharov

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Heartflow IPO: Mounting Losses, ~99% Revenue Concentration From a Single Product

​Heartflow Inc., a provider of AI-powered scalable software platform for diagnosing and managing CAD, set to IPO this week. In my insight, I...

Andrei Zakharov

Mirxes Pre-IPO: Challenges for Mass Adoption Become Clearer

​Mirxes files updated prospectus for Hong Kong listing, expanding clinical trial plans but facing challenges in achieving blockbuster-level success.

Ke Yan, CFA, FRM

GRAIL’s 4Q’FY24 Financial Results: The Company Is On Track To Complete FDA/PMA Submission In FY26

In my insight, I discuss GRAIL’s 4Q’FY24 financial results, outline key revenue growth drivers and update my financial model.

Andrei Zakharov

GRAIL: Significant Sales Growth of Galleri Test and The Increase in 2025 Revenue Guidance

GRAIL shares have materially outperformed Nasdaq and peers. The stock has bottomed in the low $13s and gained more than 100%. I see further room...

Andrei Zakharov

GRAIL: Detecting Early-Stage Cancers With Galleri Test, A Significant Market Opportunity

GRAIL, a fast-growing Galleri test maker, spun off from Illumina in June. The population-scale MCED screening test identifies 50+ types of cancer...

Andrei Zakharov

Heartflow Inc., a provider of AI-powered scalable software platform for diagnosing and managing CAD, set to IPO this week. In my insight, I...

Mirxes files updated prospectus for Hong Kong listing, expanding clinical trial plans but facing challenges in achieving blockbuster-level success.