Healthcare

• Rigaku Holdings (268A JP) priced its IPO at JPY1,260 per share to raise gross proceeds of US$856 million. The shares will start trading on 25 October.
• We previously discussed the IPO in Rigaku Holdings (268A JP) IPO: The Bull Case, Rigaku Holdings (268A JP) IPO: The Bear Case, Rigaku Holdings (268A JP) IPO: Valuation Insights.
• The peers have modestly derated since the prospectus was released on 20 September. The IPO price remains attractive.

• Our base case target price for Orum Therapeutics is 35,170 won per share, which is within the IPO price range of 30,000 won to 36,000 won per share. 
• Given the lack of upside relative to the target price, we have a Negative View of this IPO. 
• FSS has requested correction to the company’s IPO prospectus. As a result, it now appears the IPO could be delayed. 

• Biostar’s revenue growth decreased obviously in the first five months in 2024. Under the fierce competition and anti-corruption campaign, the expectation for the commercialization performance of Biostar is not high.
• Although Biostar has invested a lot of resources in market exposure, high customer concentration indicates that the Company faces challenges in marketing/customer relationship expansion. Biostar has also encountered overcapacity issues.
• After Series E Financing, Biostar’s post-investment valuation was RMB4.49 billion. But we’re not optimistic about the outlook of Biostar. This valuation could be difficult to achieve in HK stock market.

• In 3Q24, Samsung Biologics (207940 KS) reported 15% YoY revenue growth to KRW1,187B, driven by the contribution of Plant 4, the full utilization of Plants 1–3, and biosimilar products.
• The company has raised 2024 annual revenue growth guidance to 15–20% YoY from 10–15% earlier, driven by successful ramp-up of Plant 4 and favorable Fx movement.
• The company has signed record-breaking CMO contract with an Asian pharmaceutical company, thereby bringing the company’s total new contract value for the year to more than $3.3B.

• SBC continues to expand its footprint organically and through strategic M&A to grow its franchisee network and revenue base.
• SBC can leverage its strong balance sheet and suite of solutions to lower the all-in costs for clinics to launch and / or extend their businesses and to support its overall expansion strategy.
• The rising acceptance of and popularity of aesthetic medicine in Japan and globally creates a tailwind for its growth, in our view.

• CanSino’s performance picked up in 24Q2. CDMO revenue is a surprise, which would become the second growth curve. Effective cost control and increased demand for meningococcal vaccines narrowed net losses. 
• The short-term highlight in business progress is PCV13i, whose approval process is faster-than-expected. This means CanSino’s revenue in 2025 may exceed expectations. Controlling shareholders and management have increased their holdings.
• CanSino’s revenue is expected to reach RMB750 million in 2024. If revenue this year reaches RMB800 million or above, it’s beyond expectations. Reasonable market value is at least RMB5-10 billion.

• Rani is a clinical-stage biotherapeutics company developing the ingestible robotic RaniPill (RP) that enables oral delivery of biologics & other large molecules.
• Its pipeline features clinical assets RT-102 (teriparatide for osteoporosis) & RT-111 (ustekinumab for psoriasis).
• Both programs have completed Ph1 trials characterizing safety tolerability & pharmaco-kinetics.

• Haemonetics Corporation’s first quarter fiscal year 2025 results reveal mixed outcomes in a challenging market scenario.
• The company reported a revenue of $336 million, which represents an 8% increase on a reported basis and a 3% organic growth.
• Despite the revenue growth, the adjusted earnings per diluted share decreased by 3% to $1.02, reflecting some strain from operational challenges and the dynamic market conditions.

• QuidelOrtho’s second quarter 2024 financial results were guided by substantial review and restructuring as the new CEO, Brian Blaser, begins to imprint his strategy on the company’s operations.
• The company reported $637 million in revenue and an adjusted EBITDA of $90 million.
• These figures align with the company’s expectations, indicating stable performance across its diverse geographical and operational spectrum.

• Shineway’s revenue experienced negative growth in 24H1 as expected, but net profit performance beat expectations (up 27.5% YoY). However, if excluding those one-time gains, net profit was down 14% YoY.
• In 24H2, Shineway’s performance is expected to pick up, and YoY revenue growth 2024 full-year would return to positive (e.g. 5-10% YoY). The only concern is TCM formula granule VBP.
• China Shineway Pharmaceutical (2877 HK)’s overall financial position is healthy.  However, even with large cash balance, the current dividend is not satisfactory, which has more room to improve.

• Perrigo Company plc’s recent earnings for Q2 2024 revealed both strengths and challenges within its portfolio of products and strategic initiatives.
• Under the leadership of CEO Patrick Lockwood-Taylor, the company has made significant progress in restructuring its operations and cost management, which is reflected in select financial strengths and strategic positioning evident in the quarterly outcomes.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Merit Medical Systems Inc. showcased robust fiscal progress in its second-quarter 2024 earnings.
• The company witnessed total revenue growth of 5.6% on a GAAP basis and 6.6% on a constant currency basis, amounting to $338 million, exceeding the forecasted performance.
• This growth was fueled by strong organic expansion and modest contributions from acquired products, with particularly notable performance in the Cardiovascular and Endoscopy segments.

• Glaukos Corporation’s second quarter earnings for 2024 revealed a 19% increase in consolidated net sales which amounted to $95.7 million, reflecting consistent growth across both U.S. and international markets, particularly in the glaucoma division.
• The company has upwardly revised its full-year net sales guidance for 2024 to $370 million – $376 million, indicating optimistic projections based on current performance.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

BB Biotech (BION) invests in innovative, rapidly expanding biotech companies. BION’s portfolio company Wave Life Sciences (Wave) recently announced a significant milestone in the field of genetic medicine: the first successful therapeutic RNA editing in humans. This news lifted Wave’s share price by c 60%. It follows recent positive developments in three of BION’s largest holdings, Alnylam, Intra-Cellular Therapies and Agios, which all saw substantial improvements in their longer-term revenue prospects after positive Phase III readouts. Wave’s news adds to the recent positive momentum in BION’s NAV, which rose by 5.2% in the year ended 30 September 2024, after several years of annual declines, although this return lagged the Nasdaq Biotech Index’s 12.3% rise. Yet the company’s share price declined by 8.1% over this period and the share price discount to NAV is currently over 15%, in stark contrast to an average NAV premium of c 10% over the past 10 years. With interest rates falling and the outlook for the biotech sector potentially brightening accordingly, as we argued in our August 2024 update, this may represent an opportunity for investors to acquire access to the exciting opportunities offered by this industry at what may be an uncommonly wide discount.

• MIRA Pharmaceuticals(MIRA) Company Sponsored Research Report

• The “industry clearing”  of innovative drug companies is far longer and more brutal than imagined. But Chinese innovative drug ecosystem will ultimately usher in a better innovation pattern in the future.
• For every innovative pharmaceutical company with ambitious goals, globalization is a “must option”. With more and more Chinese biotech achieving success, the internationalization prospects will become better and better.
• China TCM’s privatization failure made us realize large SOEs we always believe in would violate their commitments to market/investors.Now, we need to get back to the fundamentals to minimize losses.

• Legochem Biosciences (141080 KS) entered into a license agreement with Ono Pharmaceutical for LCB97, a pre-clinical stage ADC targeting solid tumors for an upfront and milestone payment of $700M.
• Legochem is now pursuing high-value package deals, combining platform and product deals or multi-target product deals. The above-mentioned deal with Ono is the first such package deal.
• Legochem’s ADC technology platform is seeing rising demand as number of providers decreased (due to recent M&A deals) while big pharmaceutical companies are rapidly expanding their ADC businesses.   

• CVRx (CVRX US) was up 19% (including after hours) as the AMA accepted CPT Category I codes for Barostim. Codes are to be implemented on January 1, 2026
• With Category I CPT codes CVRX should see the benefits of clinical validation, regulatory de-risking, reimbursement potential, increased market access and significant improvement in revenue potential
• Barostim is the only neuromodulation device for heart failure and resistant hypertension, positioning CVRx as a compelling acquisition target due to its unique technology and strong market potential.

• China Traditional Chinese Medicine (570 HK)  (TCM) has been a frustrating deal, for a deal that shouldn’t be frustrating.
• As feared from its 16th October monthly update, the inability to secure investor group consents appears to have torpedoed the transaction. Will we eventually find out why this got stonewalled?
• This deal lapse changes the Hong Kong M&A landscape; if you can’t rely on SOE transactions to get up, what next?  The immediate question now is downside support on Monday.  

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Tokyo Metro (9023 JP), Rigaku Holdings (268A JP), Horizon Robotics (9660 HK), China Resources Beverage (2460 HK) and Hyundai Motor India (1342Z IN) IPOs.
• Event-Driven developments: China Traditional Chinese Medicine (570 HK), Greatview Aseptic Packaging (468 HK), Sun Art Retail (6808 HK), Fuji Soft Inc (9749 JP), Dyna Mac Holdings (DMHL SP).

• 10x Genomics, a leader in single-cell and spatial technologies, presented a mixed financial and operational report for Q2 2024, characterized by modest revenue growth alongside strategic advancements and evident pressures from the external economic environment.
• On the financial front, 10x Genomics reported a revenue increment of 4% year-over-year, reaching $153 million, driven particularly by robust demand for spatial consumables and a sequential increase in single-cell consumables.
• Notably, the company achieved a free cash flow positive status during the quarter.

• Halozyme’s recent quarterly performance underscored a strong trajectory in its financial and operational fronts.
• The company, which specializes in the ENHANZE drug delivery technology, reported robust second-quarter earnings, with total revenue hitting $231 million, showing a growth that aligns with the company’s full-year expectations of 13% to 22%.
• Notably, royalty revenues increased by 12%, reaching $125 million.

• Teladoc Health’s second quarter 2024 financial results present a complex yet promising terrain as the virtual healthcare provider continues to navigate challenges while identifying avenues for growth and improvement.
• Despite reporting a net loss, Teladoc Health demonstrated strategic areas of strength, particularly in its Integrated Care business, which noted a revenue increase and solid EBITDA performance.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Shockingly, the Sinopharm-led consortium’s offer for China Traditional Chinese Medicine (570 HK) has lapsed as the precondition long stop date has not been extended.
• This deal break caught many, including me, off guard. There are lessons to be learnt and questions to be asked. 
• Shareholders will have a bruising Monday. Our analysis suggests a deal break price of around HK$3.44, a 10% downside to the last close.

• Intuitive Surgical (ISRG US) posted 3Q24 result, with revenue, procedure volume growth, system placement, and EPS beating estimates. Accelerating rollout of da Vinci 5 remains one of the growth engines.
• During 3Q24, Intuitive placed 110 da Vinci 5 systems, up from 70 in Q2 and eight in Q1. da Vinci 5 system has been used in more than 12,000 procedures.
• Intuitive has raised the low end of the procedure growth guidance range from 15.5% to 16.0% and expects full year 2024 procedure growth within a range of 16% and 17%.

• BioStem Technologies is a leading innovator focused on harnessing the natural properties of perinatal tissue in the development, manufacture, and commercialization of allografts for regenerative therapies.
• The company announced testing results for its core BioRetain technology that showed the superiority of the treatment over the traditional standard of care.
• Additionally, the company received national pricing from Medicare for its Vendaje AC product.

• Adicet Bio is a biotech company working on developing an off-the-shelf CD20 gamma delta CAR-T cell therapy for autoimmune diseases, particularly lupus nephritis
• The company also has gamma delta CAR-T programs targeting various cancers, with value inflection data points expected in 2024 and 2025
• Despite trading at a negative enterprise value, Adicet has significant cash reserves and a manageable quarterly spend, making its equity potentially underpriced compared to peers, with the potential success of its autoimmune program leading to a stock re-rating.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• China Traditional Chinese Medicine (570 HK)’s monthly update notes that the consortium has secured SAMR approval and made progress in obtaining the other regulatory approvals. 
• As expected, the precondition will not be satisfied before the 18 October long stop date. Unexpectedly, whether the consortium members will consent to the extension remains uncertain.
• The extension will be forthcoming as the delay is procedural, there is a reputational risk from a deal break, the time investment is significant, and the warning was legally required.

For our next Corporate Webinar, we are glad to welcome UMP Healthcare’s Chief Financial Officer and Company Secretary, Patrick Cheung. 

In the upcoming webinar, Patrick will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Sameer Taneja. The Corporate Webinar will include a live Q&A session.

The webinar will be hosted on Wednesday, 23 October 2024, 15:00 SGT/HKT.

About UMP Healthcare

• China Traditional Chinese Medicine (570 HK) (TCM) will fall today. Perhaps a lot.
• With two days left on the clock to secure the pre-conditions (18th October), the Offeror said “it remains uncertain” whether it can secure an extension from the investor group.
• Such wording could be viewed as boilerplate SFC legalise. I would argue the use of “uncertain” is superfluous, unhelpful, and for investors, downright worrying. 

• Since Tasly’s performance growth has long stagnated and Yan Kaijing has no better way to turn the situation around, selling Tasly to SOE and cashing out becomes a good choice.
• Upon completion of all approvals (e.g. the SASAC, SAMR, shareholders’ meeting of CR Sanjiu, etc.), the deal aims to be completed in 25Q1. We think the deal will get up.
• Tasly’s share price should be at least higher than RMB14.85/share based on the cash transfer price. Its P/E would reach 30 in the future after the integration with CR Sanjiu.

• BenQ BM Holding Cayman Corp. (BBHC HK) is looking to raise at least $US100m in its upcoming Hong Kong IPO. 
• It is a leading private for-profit general hospital group in mainland China, operating two general hospitals – Nanjing BenQ Hospital and Suzhou BenQ Hospital.
• In this note, we look at the firm’s past performance.

• Dr. Wu Skincare is a leading skincare brand from developed Asia known for its skin vitamins and strong financial performance
• Despite not being cheap from a tangible NAV perspective, the brand is considered undervalued with high margins, ROE, and cash returns to shareholders
• Dr. Wu, structured as a pure marketing company with no manufacturing, has top market share in key sales channels in Taiwan and continues to grow and maintain a 5% dividend yield

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• At a 51 NPE, Daiichi Sankyo was priced for perfection.
• We do like their focus on the high growth oncology segment, however, we felt that the valuation left no room for error.
• Post the two disappointing trial announcements, at a 39 NPE, the valuation is become more palatable and getting closer to our mid-thirties target entry point.

• Masimo Corporation’s second quarter of 2024 earnings conference call came with updates that carry implications of both strength and ongoing challenges.
• The company, primarily known for its healthcare technologies, showed a robust performance in its healthcare segment, with a noticeable 23% year-on-year growth in healthcare revenues, totaling $344 million for the quarter.
• This growth is supported by a 29% increase in consumables and service revenue, reflecting strong demand for Masimo sensors, driven by hospital conversions and normalization of installations.

• GENOVA (9341 JP) recorded better-than-expected sales and operating profit in Q1FY25, driven by continued strong demand. With the progress achieved in Q1FY25, the company is expected to beat H1FY25 guidance.
• Medical Platform business has been experiencing steady growth in both the number of articles and page views, leading to creation of multiple contracts and improve the platform’s unit contract price.  
• The company had 14K customers for the Medical Platform Business and the Smart Clinic Business in Q1FY25, a mere 8% of its estimated potential customer base of 173K clinics.

• Exelixis, Inc. presented its second-quarter 2024 financial results, revealing a period of strong performance and strategic advancements in its portfolio.
• The company highlighted significant growth in both its top and bottom lines, primarily driven by the success of the cabozantinib franchise, demonstrating a robust market presence, especially in renal cell carcinoma (RCC).
• Globally, net product revenues from the cabozantinib franchise, along with revenues from partnerships, showed significant increases, totaling $618 million for the quarter.

• CSI Medical Service represents the top 50 largest and most-liquid stocks involved in medical devices, medical care, medical informatization and other medical theme from the Shanghai, Shenzhen and Beijing Exchanges.
• In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2024.
• We expect up to five ADDs and five DELs for the CSI Medical Service index during this index rebal event based on the latest available data.

• Top Glove Corp (TOPG MK) achieved 75% YoY and 31% QoQ revenue growth in 4QFY24, driven by higher volume and relatively stable selling price, with net loss narrowing down further.
• Considering the current demand and supply condition, Top Glove expects the ASP to further increase. The company aims to recover its EBITDA margin to pre-pandemic levels of 15% by FY26.
• Import alert and expected tariff increase on Chinese manufacturers, may help shift the focus from China to Malaysia, as the preferred sourcing destination, thereby helping Top Glove.

• Fosun has a clear plan for Henlius’ future development. This seems to hint at “an internal consensus” – Fosun seems to have persuaded major shareholders to vote for the privatization.
• The privatization of Henlius will make positive contributions to Fosun Pharma’s revenue/profit, but this impact is limited.  What Fosun really wants is to obtain huge investment income from another spin-off/re-listed.
• For investors who are interested in the Share Alternative, they’re advised to figure out whether the Rollover Entities/Securities is relevant to the new entity.If not, the Share Alternative is worthless.

• Rigaku Holdings (268A JP) has opened its books for the IPO, and the IPO will raise $753m purely through the sale of shares by the existing shareholders.
• Unlike its competitors, Rigaku has a very specialized product portfolio that is entirely focused on X-ray technology which makes the company unique among its competitors. 
• Our analysis reveals that Rigaku’s IPO is attractively priced compared to its competitors and there is more than 15-20% upside to the indicative IPO price range.

• Rubicon Research Limited (1453591D IN) is looking to raise about US$130m in its India IPO.
• It is a pharmaceutical formulations company with an increasing portfolio of specialty products and drug-device combination products targeting regulated markets, particularly, the United States.
• In this note, we talk about the company’s historical performance.

Actinogen Medical announced the successful completion of its A$3.0m share purchase plan (SPP), which closed 1.3x oversubscribed. With its previously disclosed A$8.1m share placement, total funds from the combined capital raising reached the targeted A$11.1m in gross proceeds. The company expects that the total proceeds will enable its operating runway to reach the release of top-line results for its XanaMIA Phase IIb/III trial in patients with mild-to-moderate Alzheimer’s disease (AD), expected in mid-CY26. The next major catalyst for Actinogen is the interim results on the first c 100 patients of this study, expected in mid-CY25, which could lead to licensing and/or value realisation opportunities. Our risk-adjusted net present value is A$619.8m (vs A$616.8m previously).

• On October 7, 2024, Virios Therapeutics, Inc. (VIRI) announced a business combination with privately-held Wex Pharmaceuticals, Inc. to form Dogwood Therapeutics, Inc. (DWTX).
• The name and ticker change, along with a 1:25 reverse split, took effect October 9, 2024.
• The new company will be focused on the advancement of three assets: Halneuron , which is currently in a Phase 2b trial for the treatment of chemotherapy-induced neuropathic pain (CINP) IMC-1, which is a Phase 3-ready asset for the treatment of fibromyalgia and IMC-2, which is currently in development to treat Long COVID.

• The review period ends on 31 October, the changes should be announced on 29 November and will be effective after the close of trading on 13 December.
• We forecast 4 potential changes for the index in December where there could be buying of 0.5-3x ADV in the adds and selling of between 0.5-1.3x ADV in the deletes.
• The forecast adds have drifted lower versus the forecast deletes following the rally in the markets and the large ETF creations. That could reverse from now till review period end.

• Positive results from a Phase 3 clinical trial show that avasopasem reduces the severity of symptomatic oral mucositis (SOM) and decreases the need for opioid analgesics.
• Galera Therapeutics plans to submit a New Drug Application (NDA) to the FDA based on these promising results.
• There is potential for avasopasem to become a new standard of care for patients receiving radiation therapy for head and neck cancer.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• We do not want to make a premature conclusion about this acquisition too early. For both Legend Bio and Genscript, this acquisition is worth considering, given the geopolitical risks.
• There could be difference in expectations between buyers and sellers regarding the acquisition price. For fear of losing their jobs, Legend Bio’s management may not be happy about being acquired.
• Considering the high uncertainty, our suggestion is that investors spend more time on the fundamentals of Legend Bio, rather than just betting on the success of the acquisition.

• Zacks Small-Cap Research Note for Windtree Therapeutics (WINT)

• Neurocrine Biosciences, in its second quarter earnings call for 2024, highlighted significant achievements and strategic movements, setting a dynamic course for its future.
• As CEO Kevin Gorman prepares to step down, the company reported a robust year with strong financial and clinical developments, though faced challenges typical of a biotech firm scaling its operations and research endeavors.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Seres Therapeutics, a leading microbiome therapeutics company, recently held its second-quarter 2024 earnings call.
• The company is refining its strategic direction, focusing on live biotherapeutics, while simultaneously divesting its VOWST business to Nestlé Health Science.
• This transaction, expected to close soon, involves the sale of the VOWST commercial rights for $155 million.

• Stevanato Group’s second quarter 2024 earnings results reflect a mixed performance characterized by robust revenue growth in the Biopharmaceutical and Diagnostic Solutions (BDS) segment, offset by challenges in the Engineering segment.
• Challenges included project delays and higher costs primarily related to supply chain disruptions.
• Stevanato Group provided comprehensive updates on operational initiatives aimed at optimizing production and improving efficiency across their locations, especially in Denmark and Italy.