Healthcare

• Dr Agarwal’s Health Care Ltd (8140044Z IN) is looking to raise about US$350m in its India IPO. The deal is downsized from an earlier reported size of around US$480m.
• Dr Agarwal’s Health Care is a healthcare/hospital chain in India providing eyecare services, including surgeries; consultations, diagnoses, non-surgical treatments; and sells opticals, contact lens, accessories and eyecare related pharmaceutical products.
• Previously, we have looked at the company’s past performance. In this note, we provide a summary of its RHP updates and share our quick thoughts on peer comparison and valuation.

• Hyphens Pharma (HYP SP EQUITY) is Singapore’s leading specialty pharmaceutical and consumer healthcare group, leveraging on its diverse footprints in ASEAN countries. Its core business lies in three segments: Specialty Pharma Principals, Proprietary Brands, and Medical Hypermart and Digital.
• Based on its scalable business model, direct access to the five countries in the southeast Asia region enabling it to capture health expenditure growth in ASEAN countries, sustainable growth from both in-house product innovation and in-licensing cooperation, as well as realization of DocMed’s potential when rolling out the digital platform to other ASEAN markets, Hyphens Pharma will demonstrate sustainable growth momentum and optimistic investment value in the future.
• Revenue in 2024 full year is expected to show a strong rebound compared to 2023.

• The underwriters amended the terms of this offering with a S-1/A on Tuesday morning.
• With the updated terms, the company could raise as much as $170 million at the high-end of the new range. 
• We have updated our first day forecast given the bullish momentum during the roadshow. 

• 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.

• DeepSeek appears to have turned the chatbot market upside-down, putting pressure on AI-linked stocks. The dust has yet to settle, but the selloff has been largely contained to AI-linked stocks.
• The rest of the market did not seem to care; the equal-weighted S&P 500 was roughly flat yesterday.
• Additionally, market dynamics remain healthy. Bottom line: as long as the S&P 500 remains above 5600-5670, our long-term outlook remains bullish.

• Henry Schein, a global leader in healthcare products and services, has faced significant scrutiny following the intervention of activist investor Anynam.
• With demands for a new CEO, strategic cost cuts, and a refined approach to capital allocation, Anynam has raised concerns over Henry Schein’s performance and governance.
• The activist’s recommendations include splitting the company’s dental and medical businesses, enhancing operational efficiencies, and reassessing leadership for improved shareholder returns.

• Imunon, Inc. (IMNN) is finishing preparations to initiate a Phase 3 clinical trial of its lead development compound, IMNN-001, in the treatment of advanced ovarian cancer.
• In support of this, the company recently announced a positive Type C Chemistry, Manufacturing, and Controls (CMC) meeting in which the agency agreed the company’s potency assay is acceptable for the Phase 3 trial and use in a commercial setting.
• This follows the company’s prior announcement in which it had reached alignment with the FDA on its proposed plan for the Phase 3 trial, including the overall trial design, the target patient population, the treatment schedule, and the primary endpoint.

• Lexaria is a biotechnology company seeking to enhance the bioavailability of multiple drug agents using DehydraTECH (DHT), its technology using oral and topical delivery.
• It combines lipophilic APIs with specific fatty acid and carrier compounds followed by dehydration.
• DHT offers several attractive features: substantial improvement in bioabsorption in terms of time to measurable plasma levels & AUC, brain permeation, taste masking & side effect reduction.

• Dr Agarwal’s Health Care is looking to raise ~$350M from its upcoming India IPO, which is a combination of fresh issue and OFS. The IPO price band is INR382–402.
• The company intends to utilize INR1.95B out of the fresh issue proceeds to repay its debts, which stand at INR3.61B as of December 31, 2024.
• The company’s proven capability to scale up the operation amid cut-throat competition and profitable business operation enhance our conviction on the long-term growth prospect of the company.

• The company has a potential blockbuster treatment for a certain type of chronic kidney disease  affecting millions of Americans.
• The company could raise up to $132.6m if priced at the high-end of the range which would value the company at $728m.
• The sector vastly underperformed in the aftermarket and is looking to start 2025 on the right foot.

• Biotech targeting treatment of obesity and obesity-related conditions, starting with rare hyperphagias filed for its IPO on January 23rd.
• Morgan Stanley, BofA Securities, Cantor, RBC Capital are the bookrunners on this IPO.
• Lead product, ARD-101 is an oral gut-restricted small-molecule agonist of certain TAS2Rs expressed in the gut lumen for which they have initiated a Phase 3 clinical trial for hyperphagia.

• Visen Pharmaceuticals is looking at raising up to USD 300m to list in Hong Kong.
• We look at the company’s core product and highlight two unfavorable trends.
• We are not excited about the company’s fundamentals, and are not keen in the deal.

• In other to attract and retain high-quality dentists, dental services providers need to pay higher salaries than public hospitals, which inevitably drives up manpower costs and drag down profit margin.
• Regulatory pricing controls and centralized procurement policies on dental implants and orthodontic materials will affect the pricing of Dazhong’s dental services, thus put pressure on its future revenue growth.
• The future valuation performance largely depends on if Dazhong is able to expand out of Central China and achieve nationwide coverage. However, so far, no successful cases have emerged.

• Molina offers Managed Medicaid services to low-income individuals on behalf of state governments, receiving a fixed fee per member in exchange for assuming medical risk, managing provider networks, and administering the program
• The company operates in a competitive landscape with few key players in the Managed Medicaid market, giving them an advantage when states put their programs out to bid
• Molina’s successful business model effectively manages Medicaid programs while minimizing risk for state administrators

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.

• Humana provides Medicare Advantage plans to around 6 million members, offering government health insurance for seniors through private insurers
• Medicare Advantage plans limit provider networks, treatments, and incentivize cost-saving behavior to provide efficient and high-quality care
• MA aims to promote value-based care relationships with providers, focus on preventative treatment, and pay for outcomes rather than volume of services provided.

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.

• Metsera, Inc. is developing next-generation injectable and oral NuSH analog peptides for obesity treatment.
• ARCH Venture Partners, Google Ventures and Softbank’s Vision Fund are all existing investors in this IPO.
• The company is seeking an IPO valuation nearing $2bn for the company with a Phase III product candidate.

• Due to disappointing performance in 24Q1-Q3, both revenue and net profit attributable to the parent company in 2024 could face negative growth, but 2025 is expected to have positive growth.
• As pharmaceutical distribution business can just maintain stable but medical device distribution business and retail pharmacies cannot contribute high growth, the overall performance of Sinopharm has lost growth momentum.
• Due to longer payment cycles from hospitals and its business characteristics, Sinopharm is facing significant demands for working capital. Insufficient cash flow makes it difficult to increase the dividend rate.  

• Dongbang Medical reported excellent IPO book building results. The IPO price has been finalized at 10,500 won. The demand ratio from the institutional investors was 910 to 1.
• Our base case valuation of Dongbang Medical is target price of 13,609 won per share which is 30% higher than the IPO price of 10,500 won.
• Dongbang Medical specializes in the manufacturing and distribution of acupuncture needles, various cosmetic devices, and other medical devices.

• There have been quite a few M&As in the field of TCM, with a clear trend of SOEs taking over TCM enterprises due to strategically significant and advantageous integration.
• Whether a drug can be approved does not depend on whether it has entered Phase II/III trials. The areas with clearly unmet medical needs often indicate good investment opportunities.
• The privatization of Henlius failed. Lin Lijun’s dissenting vote was based on a deliberate decision. We are optimistic about the outlook of Henlius due to its strong fundamentals and internationalization. 

• Dr. Reddy’s Laboratories (DRRD IN) reported Q3FY25 US business revenue of INR33.8B, up 1% YoY, mainly dragged by lower contribution from Lenalidomide. Q3FY25 EBITDA margin deteriorated to 27.5% (Q3FY24: 29.3%).
• Limited growth catalysts remain major overhang. No near-term key launches lined-up to fill the void created by Lenalidomide. Moreover, paltry new launches in the U.S. entail limited revenue visibility.
• Lack of near-term catalyst and bleak growth outlook justify cheaper valuation of Dr. Reddy’s. We do not consider Dr. Reddy’s as value buying opportunity and remain bearish on the name.

• The company has jumped from just eight sales territories in Q2 2023 to 43 sales to end 2024 with more than 15,000 units installed.
• An existing shareholder is on the cover of the prospectus with a concurrent private placement
• Medical Device IPOs have a strong history of success as many are poised for growth

• Akebia Therapeutics aims to challenge the standard of care for anemia management in chronic kidney disease in the USA
• Despite setbacks with FDA rejection of new drug Vafseo, company holds growth potential
• Aims to have over 75,000 patients prescribed to Vafseo by end of 2026, leading to significant sales growth and operating profit; stock seen as undervalued with potential to reach price target of $5.00+

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.

• Astellas Pharma (4503 JP) revised FY25 revenue guidance upward to ¥1900B on robust Xtandi performance and favourable forex movement. Core profits and margins will also see upward revisions and expansions.
• The company will record an impairment charge of ¥176B for intangible assets this fiscal. As a result, FY25 operating profit on reported basis will come down to ¥11B from ¥80B.
• Recently, Astellas has received approval for Vyloy and label expansion approval for Padcev in China. Label expansion application for Izervay in the U.S. has been accepted by the FDA.

• Hogy Medical (3593 JP) reported flat sales of ¥30B in 9MFY25. Sales of surgical kit products rose 3.2%, to ¥20B, of which Premium Kit sales climbed 7.8%, to ¥13.2B.
• Higher costs dented operating margin by 40 bps while net profit rose 5% YoY to ¥2.7B due to an extraordinary gain from sale of investment.
• The company reiterated guidance for FY25 of a rise in sales of 5% to ¥40.9B, with profits also witnessing double digit growth.

• Dr Agarwal’s Health Care Ltd (8140044Z IN) is looking to raise about US$480m in its upcoming India IPO.
• Dr Agarwal’s Health Care is a healthcare/hospital chain in India providing eyecare services, including surgeries; consultations, diagnoses, non-surgical treatments; and sells opticals, contact lens, accessories and eyecare related pharmaceutical products.
• In this note, we talk about the company’s historical performance.

• TMDX is a high-growth med-tech company specializing in organ transplant therapy
• Despite expensive traditional valuation metrics, TMDX offers a compelling investment opportunity
• Company recently became GAAP profitable and free cash flow positive, indicating a bright future ahead

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.

• Sichuan Biokin is looking at a A-H listing and is looking to raise up to USD 500 million. 
• In this note we look at the company’s fundamentals briefly including its heavyweight product BL-B01D1. We also examine its deal with BMS.
• The stock has performed well on Shanghai STAR board since its A share listing. 

• EHAB is undervalued at 6x FCFE
• EHAB can increase profitability by focusing on Medicare Advantage plans and fee-for-service patients
• Home health and hospice industry is growing, making EHAB an attractive investment with potential for consolidation in the sector

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.

• Like most good comedy bit, it is funny probably because there is an element of truth to it. As a society, we are increasingly humanizing our pets.

• When we look at our pets, we increasingly don’t just consider them our mere properties, rather we sense a much deeper bond to a sentient beings.

• Former Petco CEO Ron Coughlin provided some numbers to contextualize society’s growing sense of devotion to our pets:

  “Pet parents don’t want to be called pet owners. Seventy-seven percent say they want to be called pet parents, and 60 percent say they love spoiling their pets.”

• Shanghai Henlius Biotech (2696 HK) shareholders have voted against Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
• The China Traditional Chinese Medicine (570 HK) and Henlius deal breaks have rewritten the HKEx merger arb rulebook. The Henlius deal break offers several lessons.
• The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares remain vulnerable and could touch HK$15.  

• The question was asked in Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal? Well, now we have one as LVC inexplicably blocked.
• It didn’t appear to make economic rationale for LVC to crash the party – knowing they would do so, and not bother to reduce their position accordingly.
• In tandem with the TCM (570 HK) debacle, it sets another bad precedent for future/existing Hong Kong  events. Expect spreads for HK arbs to widen. And Henlius to crater.

• Lin Lijun voted against the privatization, which is in line with our analysis.Lin and some other long-term investors expressed their “dissatisfaction” by opposing the privatization due to disappointing Cancellation Price.
• Due to deal break, Henlius’ share price could be under pressure in short term.Investors may need to wait until the implementation of biosimilar VBP in 2025 to see situation clearly.
• Despite biosimilar VBP, we remain optimistic about the outlook of Henlius, because its future development positioning will not be limited to just biosimilars, but will focus on internationalization.

• Beta Bionic, Inc. set terms for an IPO that could raise up to $120 million
• The IPO is led by Bank of America Securities and is scheduled to debut on Thursday, 1/30.
• The company’s product, iLet Bionic Pancreas, was approved by the FDA in May 2023 and posted $44.7 million in sales for the nine months ended September 30, 2024.  

• Beta Bionics, a high-growth medtech company and developer of an integrated bionics pancreas system called iLet, filed for an IPO in the United States.
• Maker of insulin delivery device cleared by the FDA offers 7.5M shares at a price range between $14.00 and $16.00 per share.
• With the most recent S-1/A, Beta Bionics plans to raise ~$122M at the high end of range at $16.00 per share, including a concurrent private placement.

• Biopharmaceutical company on a mission to revolutionize the current treatment paradigm for cystic fibrosis filed for IPO.
• Company’s NBD1 stabilizers, are both in Phase 1 healthy volunteer trials in Australia to evaluate their PK profile, safety and tolerability.
• RA Capital, TPG’s the Rise Fund, Atlas Venture, OrbiMed and Enavate Sciences are all among existing investors.

• On December 13, 2024, Edesa Biotech, Inc. (EDSA) announced financial results for the fourth quarter and full fiscal year 2024 that ended September 30, 2024 and provided a business update.
• The company is continuing to advance its pipeline, which includes EB06, and anti-CXCL10 monoclonal antibody for the treatment of vitiligo, EB05 for the treatment of acute respiratory distress syndrome (ARDS) and pulmonary fibrosis, and EB01 for the treatment of allergic contact dermatitis (ACD).
• We anticipate an IND being filed before the end of 2025 for EB06 such that a Phase 2 clinical trial can initiate in 2026.

• Ensysce Biosciences is committed to finding a solution to the opioid crisis plaguing the US and other developed countries around the world.
• Through its proprietary TAAP technology Ensysce is in the process of receiving approval for an abuse-resistant yet still pain-relieving opioid.
• The company announced interim data on testing on its PF614-MPAR treatment, designed to reduce the potential for opioid abuse, that showed that goal appeared to be achieved.

• Samsung Biologics (207940 KS) reported 2024 revenue of KRW4.55T, up 23% YoY, ahead of guidance of 15–20%. Growth was driven by increased contribution from Plant 4 and milestone payment.
• Ramp-Up at Plant 4 is expected to drive further revenue growth, while Plant 5, scheduled to begin operations in April 2025, will expand total production capacity to 784,000 liters. 
• Samsung Biologics is well positioned to be resilient to the industry challenges. The company has guided for 20–25% YoY revenue growth to KRW5456–5684B in 2025.

• Biotech seeking to transform the standard of care for patients suffering from autoimmune and inflammatory diseases filed its IPO on January 18th
• Lead program, OD-07656, is currently in a Phase 2a monotherapy trial for ulcerative colitis
• Potential IPO for Odyssey Therapeutics would be the first half of February

• Achieve Life Sciences is developing cytisinicline for use as a smoking cessation treatment in the United States and rest of world.
• Topline results from ORCA-2 were reported in April 2022 and for ORCA-3 in May 2023.
• Results exceeded expectations on safety & efficacy parameters.

• CareCloud, Inc. (NASDAQ: CCLD) is a technology company providing key business solutions to healthcare providers including small practices, large physician groups, and hospitals across the U.S. The company’s platform includes Revenue Cycle Management (RCM), Electronic Health Records (EHR), Practice Management (PM), digital health, and other healthcare business solutions.
• As of September 30, 2024, CCLD serviced approximately 40,000 providers across ~2,600 medical practices and hospitals.
• The company was founded in 2000 and is headquartered in New Jersey.

• EVAX is a clinical stage company that has proprietary AI models designed to more efficiently and more accurately target much-needed treatments.
• The company has two streams of possible revenue: from the treatments themselves and from the licensing of the AI technology.
• The company changed the ADS ratio from 1 ADS representing 10 ordinary shares to 1 ADS from 50 ordinary shares.

• SCLX is filling a much-needed area of the health care sector, that of developing non-opioid pain relief products.
• The company already has commercialized products that are proven to improve patients’ lives.
• The company announced 3Q2024 earnings that exceeded expectations and continues to look to grow revenues and its portfolio.

• The sharp performance decline of China TCM in 2024 is actually in line with our expectation. The current valuation has not yet reached its lowest point. 
• China TCM can still achieve an average annual profit of RMB1 billion in the future. Together with the new management, we expect the Company to come out of the trough.
• Instead of betting on privatization again, it’s better to focus more on whether China TCM’s fundamentals would improve, which is the key factor that can support a sustainable valuation rebound.

• Yatharth Hospital & Trauma Care Services (YATHARTH IN) successfully completed a QIP, raising Rs. 625 crore which was followed by the stock falling by nearly 26% in the following month.
• The company and its subsidiaries has recently been facing a significant challenge with an investigation by the Income Tax Department and the attachment of company assets.
• The document released on December 17, 2024 has confirmed the search and seizure operations conducted on October 19, 2023, targeting Yatharth and two of its subsidiaries.

• Sysmex America, Inc., a subsidiary of Sysmex Corp, recently announced plans to build a new reagent manufacturing, distribution, and service center in Brazil.
• In FY24, sales in the Americas region for Sysmex increased 12% YoY to ¥118.7B. Reagents drove the revenue growing 16%.
• Operating margins in the Americas have largely trodden on a volatile trajectory over the last few years hovering in the range of 4-6%, lowest among all the geographies.

• Daiichi Sankyo (4568 JP) has received FDA approval for Datroway for the second-line treatment of unresectable or metastatic hormone receptor (HR) positive, HER2 negative breast cancer.
• Last month, Datroway got approval in Japan. Regulatory submissions for the drug are under review in the EU, China, and other regions. The drug is undergoing trial for other indications.
• AstraZeneca’s proven commercialization capability for Enhertu enhances conviction on the commercialization prospect of Datroway too. AstraZeneca pegged peak year revenue of Datroway at more than $5B (similar level to Enhertu).

• 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: LG CNS (LGCNSZ KS) seeks to raise up to US$837 million through a primary/secondary offering.
• Event-Driven developments: Shanghai Henlius Biotech (2696 HK), Greatview Aseptic Packaging (468 HK), Jamco Corp (7408 JP), Macromill, Inc (3978 JP), Insignia Financial (IFL AU), Avjennings Ltd (AVJ AU). 

• Anhui Province will lead the first National biological drugs VBP in 2025. However, we are optimistic because we think the whole industry will start to bottom out from here.
• EVER001 has the potential to become “a game changer” for membranous nephropathy treatment. We are waiting for Everest Medicines to reach licensing cooperation based on EVER001 in the future.
• The real motivation for the Disposals of WuXi XDC shares could be to boost WuXi AppTec’s stock price first so that the management can again reduce positions at high level.