Global Healthcare Analyst

Tina Banerjee

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> entered into a definitive agreement to acquire the U.S. retail generic prescription product portfolio of <a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a> for $105M.</li>
<li>The deal will add approximately 85 approved generic products and four pipeline products. For the fiscal year ending June 30, 2022, this portfolio generated revenue of $111M.</li>
<li>Considering the revenue potential, the acquisition price seems to be reasonable. Being a high margin and limited competition portfolio, the acquisition will be earnings accretive for Dr. Reddy’s.</li>
</ul>



Dr. Reddy's Laboratories (DRRD IN) entered into a definitive agreement to acquire the U.S. retail generic prescription product portfolio of Mayne Pharma (MYX AU) for $105M.
The deal will add approximately 85 approved generic products and four pipeline products. For the fiscal year ending June 30, 2022, this portfolio generated revenue of $111M.
Considering the revenue potential, the acquisition price seems to be reasonable. Being a high margin and limited competition portfolio, the acquisition will be earnings accretive for Dr. Reddy’s.


Dr. Reddy's Laboratories (DRRD IN): New Acquisition to Bolster US Generic Product Portfolio

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a> is selling its U.S.-based CDMO business, Metrics Contract Services for $475 million. The transaction is expected to close by the end of 2022.</li>
<li>Allowing for reinvestment needs, the net proceeds from the sale will be used to repay the syndicated debt facility and return surplus capital to shareholders.</li>
<li>Combined oral contraceptive Nextstellis remains the company’s most significant commercial opportunity. While Nextstellis was launched in the U.S. in June 2021, Mayne has launched Nextstellis in Australia in July 2022.  </li>
</ul>



Mayne Pharma (MYX AU) is selling its U.S.-based CDMO business, Metrics Contract Services for $475 million. The transaction is expected to close by the end of 2022.
Allowing for reinvestment needs, the net proceeds from the sale will be used to repay the syndicated debt facility and return surplus capital to shareholders.
Combined oral contraceptive Nextstellis remains the company’s most significant commercial opportunity. While Nextstellis was launched in the U.S. in June 2021, Mayne has launched Nextstellis in Australia in July 2022.  


Mayne Pharma (MYX AU): CDMO Business Sale- A Step Towards Focus Solely on Specialty Pharma

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a>'s revenue is decelerating since FY19, which is reflected in its share price performance. From predominantly being into generics, the company is now focusing on specialty pharma.  </li>
<li>In FY21, Mayne Pharma added 11 dermatology and women’s health products to portfolio targeting $650 million in IQVIA sales. Its U.S. contract service business is on a double-digit growth path.</li>
<li>Commercialization of new oral contraceptive Nextstellis in the U.S. is the major growth driver of the company. Neststellis peak U.S. sales are projected at $200 million annually.  </li>
</ul>



Mayne Pharma (MYX AU)'s revenue is decelerating since FY19, which is reflected in its share price performance. From predominantly being into generics, the company is now focusing on specialty pharma.  
In FY21, Mayne Pharma added 11 dermatology and women’s health products to portfolio targeting $650 million in IQVIA sales. Its U.S. contract service business is on a double-digit growth path.
Commercialization of new oral contraceptive Nextstellis in the U.S. is the major growth driver of the company. Neststellis peak U.S. sales are projected at $200 million annually.  


Mayne Pharma (MYX AU): Shifting Focus to Specialty Products to Return to Sustainable Growth Path

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.</li>
<li>An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an 'Administrative Issue'. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.</li>
<li>Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.</li>
</ul>


Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.
An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an 'Administrative Issue'. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.
Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.


Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown

<div><p>S&amp;P Dow Jones Indices will announce changes to the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.</p></div><div>We are almost three quarters of the way through the review period. There are 3 potential inclusions at the review - <a href="https://www.smartkarma.com/entities/centuria-capital-group" target="_blank" data-smartkarma-citation="entities:15546:1" rel="noopener">Centuria Capital (CNI AU)</a>, <a href="https://www.smartkarma.com/entities/pinnacle-investment-manageme" target="_blank" data-smartkarma-citation="entities:20624:1" rel="noopener">Wilson (PNI AU)</a> and <a href="https://www.smartkarma.com/entities/sealink-travel-group-ltd" target="_blank" data-smartkarma-citation="entities:6400:1" rel="noopener">Sealink Travel (SLK AU)</a> while the potential deletions are <a href="https://www.smartkarma.com/entities/nuix-limited" target="_blank" data-smartkarma-citation="entities:31040:1" rel="noopener">Nuix Limited (NXL AU)</a>, <a href="https://www.smartkarma.com/entities/nrw-holdings-ltd" target="_blank" data-smartkarma-citation="entities:9271:1" rel="noopener">NRW Holdings (NWH AU)</a> and <a href="https://www.smartkarma.com/entities/g8-education-ltd" target="_blank" data-smartkarma-citation="entities:581:1" rel="noopener">G8 Education (GEM AU)</a>.</div><div></div><div>
<a href="https://www.smartkarma.com/entities/galaxy-resources-ltd" target="_blank" data-smartkarma-citation="entities:13914:1" rel="noopener">Galaxy Resources (GXY AU)</a> is placed in the inclusion zone but is unlikely to be added to the index given its pending merger with <a href="https://www.smartkarma.com/entities/orocobre-ltd" target="_blank" data-smartkarma-citation="entities:3572:1" rel="noopener">Orocobre Ltd (ORE AU)</a>.</div><div></div><div>
<a href="https://www.smartkarma.com/entities/de-grey-mining-ltd" target="_blank" data-smartkarma-citation="entities:6192:1" rel="noopener">De Grey Mining (DEG AU)</a> is a close add and the corresponding deletion is <a href="https://www.smartkarma.com/entities/westgold-resources-ltd" target="_blank" data-smartkarma-citation="entities:24269:1" rel="noopener">Westgold Resources (WGX AU)</a>.</div><div></div><div>There is a large impact expected on the inclusions while the impact on the deletions is lower.</div><div></div><div>For <a href="https://www.smartkarma.com/entities/g8-education-ltd" target="_blank" data-smartkarma-citation="entities:581:1" rel="noopener">G8 Education (GEM AU)</a>, the short interest is close to the estimated passive selling. For the other two deletes, short interest is a lot smaller than the estimated passive selling and there will be more shorts created from now to rebalance implementation day.</div>

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 200 (AS51 INDEX) as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.We are almost three quarters of the way through the review period. There are 3 potential inclusions at the review - Centuria Capital (CNI AU), Wilson (PNI AU) and Sealink Travel (SLK AU) while the potential deletions are Nuix Limited (NXL AU), NRW Holdings (NWH AU) and G8 Education (GEM AU).
Galaxy Resources (GXY AU) is placed in the inclusion zone but is unlikely to be added to the index given its pending merger with Orocobre Ltd (ORE AU).
De Grey Mining (DEG AU) is a close add and the corresponding deletion is Westgold Resources (WGX AU).There is a large impact expected on the inclusions while the impact on the deletions is lower.For G8 Education (GEM AU), the short interest is close to the estimated passive selling. For the other two deletes, short interest is a lot smaller than the estimated passive selling and there will be more shorts created from now to rebalance implementation day.

ASX200 Sep21 Index Rebalance Preview: Large Impact Names

Australia

Mayne Pharma Group Ltd. develops and manufactures oral pharmaceuticals.  The Company produces branded generics, specialty generics, and active pharmaceutical ingredients.

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Mayne Pharma (MYX AU)

Dr. Reddy's Laboratories (DRRD IN): New Acquisition to Bolster US Generic Product Portfolio

Dr. Reddy's is acquiring the US generic prescription product portfolio of Mayne Pharma for upfront cash consideration of up to $90M. The acquired...

Tina Banerjee