Healthcare

• 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.

• LVC sits a blocking stake ahead of Shanghai Henlius Biotech (2696 HK)‘s shareholder vote on the 22nd Janaury. I’ve yet to see a solid rationality why they would block.
• Malaysia Airports Holdings (MAHB MK)extends the closing date to the 24th January. Shares held plus tendering is currently 86.18%. This is done.
• Kokusai Electric (6525 JP) was IPOed in September 2023. Lockup expiry is next week, and there is a likely large index event in ~10 weeks

• Biotechnology company developing next-generation injectable and oral nutrient stimulated hormone, or NuSH, analog peptides to treat obesity, overweight and related conditions filed for Q1 IPO
• Preliminary Phase 2 results in January suggested a durable pharmacodynamic, or PD, effect consistent with the observed half-life.
• ARCH Ventures along with Fidelity are among the existing shareholders as this company enters begins its road to be a publicly traded company

• STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
• STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
• In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the March 2025 index rebal event.

• 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 June 2025.
• We expect up to four ADDs and four DELs for the CSI Medical Service index during this index review event based on the latest available data.

• Veradigm is a healthcare IT and services company with sticky, recurring revenue and organic growth potential
• Currently trading at an inexpensive valuation due to financial issues and a questionable acquisition
• Recent changes in shareholder base and management, as well as announcement of a strategic process, suggest potential sale in near future, unlocking significant upside for investors.

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.

• Currently advancing two wholly owned lead programs, MZE829 and MZE782, each of which represents a novel precision medicine-based approach for chronic kidney disease
• Lead candidate initiated a Phase 2 trial of MZE829 in November 2024 and expect to dose their first patient in the first quarter of 2025
• We anticipate this company to set terms (share size, price range) in the next week for a late January / early February debut.

• In light of recent performance trends, DWTI has revised its initial earnings forecasts announced on February 9, 2024.
• In addition, the Company is recording an extraordinary loss in its non-consolidated financial results for the fiscal year ending December 2024.
• Net sales are expected to increase due to strong royalty income from ophthalmic surgical aid “DW-1002” in Europe, the United States, etc.

• Looking ahead in 2025, we expect greater visibility in Ainos’ AI Nose programs, including robotics, smart manufacturing, elderly care monitoring, and Ainos Flora for women’s health testing.
• Veldona clinical trials in Sjogren’s syndrome and HIV-related oral warts remain on track, with Taiwan study completions expected in 2026.
• Sets eye on robotics. Ainos aims to expand its AI Nose application to robotics. It is seeking collaboration with the robotics and humanoid developers, as it believes now is the time to equip robotics with the ability to smell, filling a key gap in robot sensory capabilities.

• You might have to go all the back to Guoco Group Ltd (53 HK)‘s 2012/2013 unconditional cash offer, which was ostensibly blocked by First Eagle AND Elliott Advisors.
• Otherwise, it’s slim pickings. Past Schemes or Tender Offers arguably failed as minorities were simply not supportive. There are exceptions, like Soho China (410 HK) and TCM (570 HK)
• IF LVC wish to remain active in this space/region, they appear to be going about it in a counterproductive way. I still don’t understand why they would want to block.

• Legend Biotech has been making headlines with its breakthrough CAR-T therapy, CARVYKTI, which has revolutionized the treatment of multiple myeloma.
• This pioneering therapy, co commercialized with Johnson & Johnson, has achieved record-setting launches and boasts a significant survival benefit over standard treatments.
• The company’s robust clinical pipeline, recent partnerships, and aggressive manufacturing expansions signal strong growth potential.

• Natco Pharma (NTCPH IN) is pivoting toward niche, high-value generics like Revlimid and Semaglutide, leveraging robust R&D, strategic acquisitions, and geographic expansions for long-term market leadership.
• This approach combats conventional generic pricing pressures, delivers stronger profit margins, and positions Natco for sustainable, innovation-driven success in increasingly competitive regulated markets.
• Natco’s willingness to tackle complex molecules and patent challenges demonstrates resilience, signaling a more diversified pipeline, prudent capital use, and potential for robust shareholder returns.

• Since mid-December, share-price spreads have generally tightened across European liquid universe of ordinary and preferred shares (8 have widened, 11 tightened) with few changes in the trends.
• Telecom Italia savers are trading at 18.5% premium to ords; Handelsbanken B at 32.4% premium to A. The discount of Grifols B has tightened, some await a comeback from Brookfield. 
• Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA, Media-for-Europe. Recommended trades long ordinary / short preferred shares: Henkel, Roche, SSAB Svenska Stal, Telecom Italia.

• Our estimations for FY 2024 annual revenue range at around $62,766 million and for FY 2025 at around $63,080 million.
• The company’s annual revenue was $58,496 million in 2023 compared to $100,330 million in 2022, post- ing a significant decrease by 41.7%.
• Pfizer’s gross profit for FY 2023 was $33,542 million, decreased by 49.1% compared to $65,986 million for the corresponding period of 2022. 

• ILet Bionic Pancreas Device autonomously determine every insulin dose without requiring a user to count carbohydrate intake
• Revenue for the nine months ended September 30, 2024 was $44.7 million, more than 3.5x that of their annual revenue of $12.0 million for the year ended December 31, 2023.
• We anticipate this company to set terms (share size, price range) in the next week for a late January / early February debut.

• Shanghai Junshi Biosciences (1877 HK) reported 60% revenue growth for toripalimab during 9M24 in China. All 10 indications of the drug are now included in China’s NRDL.
• Partner launched toripalimab in U.S. in January 2024 and reported ~$19M revenue for the full-year. The drug is estimated to have U.S. market opportunity of $200M for the approved indication.
• Geopolitical tension remains a major overhang and may continue to be a concern for toripalimab’s further indication expansion approvals in the U.S.

• Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is heading for a deal break. LVC has not changed its shareholding since amassing a blocking stake.
• In the absence of a last-ditch effort by Shanghai Fosun Pharmaceutical (Group) (2196 HK) to rescue the deal, the key question is the potential deal break price. 
• Based on four methods, the potential deal break price is HK$17.28, 12% below the last close price of HK$19.58.

• Fosun hopes to privatize Henlius at a low price. As usual, it does not consider the interests of long-term investors, who may express their “dissatisfaction” by opposing the privatization.
• Lin Lijun clearly has bargaining chips. He may ask Fosun to provide a clear plan for future relisting/asset restructuring, and how the Share Alternative will be linked to this plan.
• There is a possibility this privatization may fail. Such possibility is not low, because investors will only support the privatization if they can be sure that their interests are protected.

• Moderna, Inc. is undergoing a profound transformation as it navigates a post-pandemic landscape marked by mounting caution among investors.
• After delivering record-breaking Covid-19 vaccine sales that propelled it into the spotlight during global crisis years, the biotech giant now faces significant headwinds.
• Recent updates in financial performance and strategic repositioning have underscored a shift in outlook.

• Revenue for FY05/25 was JPY2.7bn, with operating profit at JPY548mn, recurring profit at JPY548mn, and net income at JPY380mn.
• The company reorganized into three segments: PR Consulting Services, Media Platform Services, and abolished its executive officer system.
• Revenue progress for FY05/25 was 51.9% of the forecast, with operating profit at 73.8% and recurring profit at 74.6%.

• Revenue increased by 28.5% YoY to JPY5.4bn, while operating profit decreased by 50.0% YoY to JPY18mn.
• The company transferred AIGATE career Co., Ltd., resulting in an extraordinary gain of JPY5.7mn from the sale.
• Healthcare Marketing business revenue declined YoY due to a large advertising order impact in Q1 FY05/23.

• 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.

• On January 13, 2025, X4 Pharmaceuticals, Inc. (XFOR) announced a licensing agreement with Norgine to commercialize mavorixafor in Europe, Australia, and New Zealand.
• X4 will receive €28.5 upfront and is eligible to receive up to €226 million in potential regulatory and commercial milestone payments along with tiered, double-digit royalties up to the mid-twenties.
• X4 will manufacture and supply mavorixafor and Norgine will reimburse X4 for CMO costs plus a low teen percentage of the CMO costs.

• I was wrong. Loyal Valley Capital (LVC) have stopped buying Shanghai Henlius (2696 HK) – or have not bought since reaching a blocking stake of 7.8295% on the 9th January. 
• LVC could either use that stake as leverage to negotiate with the Offeror on the scrip terms. Or blow up the deal and pick up shares after the deal breaks 
• OR perhaps, as per my initial impression,  LVC tenders. And they may still do that. It should be this straightforward; but the fact that it is not raises questions. 

• The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread has ballooned to 21.8%, which suggests a deal break.
• I previously stated that LVC’s trading behaviour over the coming days will indicate its voting intentions. Unfortunately, this behaviour suggests a high likelihood of blocking the vote.
• Fosun Pharma has two potential options to secure LVC’s backing: increase the share alternative cap or introduce a rollover option. Both have challenges and are, therefore, not viable options.

• Suven Pharmaceuticals (SUVENPHA IN) is acquiring56% equity share capital of ADC/XDC-focused CRDMO, NJ Bio for $64M, strengthening position in a high growth market.  
• In June 2024, Suven announced the acquisition of a majority stake in an oligonucleotide focused CDMO player, Sapala Organics, thereby adding another high-growth complex technology to its CDMO business.
• Recently, shareholders have approved Suven’s merger with Cohance Lifesciences. Cohance has global leadership in select low-mid volume molecules as well as unique capabilities in the form of its ADC platform.

• Mani Inc (7730 JP) Q1FY25 revenue rose 8% YoY, mainly driven by surgical and eyeless needles segments, and favorable foreign exchange. However, profitability declined year-over-year.
• Despite the underperformance of dental segment, management reiterated FY25 guidance. Dental segment contributes more than 30% of total revenue.
• Mani shares plunged 20% since it published its Q1 results. Investors should avoid Mani due to its uncertain revenue outlook and deteriorating profitability in short-term.

• UMP Healthcare (722 HK) will report its results in late February. We estimate low single-digit revenue growth of 3% YoY, in line with the past two semiannuals.
• We flagged cost-cutting initiatives in UMP Healthcare (722 HK): Postcard From Hong Kong and Webinar Updates, which would result in 25% YoY profit growth. 
• Trading at 6.4x FY25e PE, with a 10% dividend yield and 85% of the market capitalization in net cash and investments, the stock has the potential to double. 

• Zacks Small-Cap Research Note for Lantheus Holdings, Inc. (LNTH)

• On January 14, 2025, Soligenix, Inc. (SNGX) announced additional interim data from the open-label, investigator-initiated study (IIS) testing HyBryte treatment in patients with cutaneous T cell lymphoma (CTCL) for up to 12 months.
• Thus far, nine patients have been enrolled and treated with HyBryte for up to 54 weeks.
• Over 80% (5/6 that have completed at least 18 weeks of therapy) have already achieved treatment success, which is defined in the study protocol as a =50% improvement in the cumulative mCAILS.

• Hengrui plans to IPO in Hong Kong, but it hasn’t yet completed the business transformation from generic drugs to innovative drugs, and is still facing the negative impact of VBP.
• The key point is whether the innovative drug business has sustained high enough growth rate to offset the decline in generic drug business so as to support the high valuation.
• Hengrui is overvalued in A-Share. We think Hengrui’s valuation should be lower than that of BeiGene (6160 HK) and Hansoh Pharmaceutical Group (3692 HK) in Hong Kong stock market.

• The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread ballooned today due to LVC’s amassing a blocking stake.
• There are valid arguments for LVC to block the vote or to support the offer. LVC’s trading behaviour over the coming days will point to its voting intentions. 
• I continue to believe that LVC will support the offer. At the current price and for a 15 February payment, the gross/annualised spread is 9.1%/160%.

• CVS Group plc (“CVSG”) has seen its share price take a hit recently, but the decline seems to stem from two short-term issues rather than any real damage to the business fundamentals.

• The first blow came in March 2024 when the UK’s Competition and Markets Authority (CMA) unexpectedly announced a nationwide review of veterinary services for household pets.

• These investigations typically last 12 to 18 months, so we’re looking at a resolution by late 2025 with a mid term resolution being around the corner mid-year.

• Anthem Biosciences (1234D IN) is looking to raise up to US$397m in its upcoming India IPO. The deal will be run by JMF, Citi, JP Morgan and Nomura.
• It is a Contract Research, Development, and Manufacturing Organization (CRDMO) with fully integrated operations spanning drug discovery, development, and manufacturing.
• As a one-stop service provider, ABS serves a range of customers, including innovator-focused emerging biotech companies and large pharmaceutical organizations globally.

• Dongbang Medical is getting ready to complete its IPO in Korea in February 2025. The IPO price range is from 9,000 won to 10,500 won. 
• According to the bankers’ valuation, the expected market cap of the comps ranges from 191 billion won to 223 billion won.
• Dongbang Medical specializes in the manufacturing and distribution of acupuncture needles, various cosmetic devices, and other medical devices. 

• I am taking several off the list, first one being Angiodynamics (ANGO) written up here .
• It jumped in the past week on a slightly improved forecast to a high of $13. I wrote it up at $6.9.
• I think fair value is around $12-15 or so, so no longer all that interesting.

• Merit Medical Systems Inc. reported its third-quarter financial results for 2024, showcasing an increase in revenue.
• The company achieved revenues of $339.8 million, marking a year-over-year growth of 7.8% on a GAAP basis and 7.9% on a constant currency basis.
• This exceeded the upper limit of the projected growth range of 6.4% to 7.8% they communicated during their previous quarter’s call.

• Perrigo has reported its financial results for the third quarter of 2024, offering insights into both its achievements and challenges during this period.
• On the positive side, Perrigo made significant progress in several strategic areas.
• Their Project Energize initiative, aimed at enhancing efficiencies, has yielded approximately $95 million in gross savings year-to-date.

• Crown Labs’ initial $6.66 bid for Revance was reduced to $3.1, while Teoxane offered $3.6, sparking potential bidding war.
• Daxxify, a Botox competitor, remains a key asset; recent Chinese market approval offsets minor setbacks in Australia/New Zealand.
• Scenarios include a bidding war, Teoxane’s bid prevailing, Crown’s bid succeeding, or both suitors withdrawing, impacting RVNC’s liquidity.

• Teladoc Health’s third quarter of 2024 demonstrated a mixed bag of performance, with both positive strides and notable challenges.
• The company’s consolidated revenue for the quarter was $641 million, reflecting a 3% decrease year-over-year.
• Despite the revenue decline, the company maintained its adjusted EBITDA at $83.3 million with a margin of 13%, although this represents a 6% decrease from the previous year.

• Cardinal Health is a wholesale drug and medical supplies distributor competing in the industry
• The company is focusing on transitioning to higher-margin services for growth and profitability
• Strong performance under CEO Jason Hollar with double-digit EPS growth, share repurchases, and three-year growth targets, despite challenges like generic price fluctuations

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.

• 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), Fujitsu General (6755 JP), Fuji Soft Inc (9749 JP), Pressance Corp (3254 JP), Smart Share Global (EM US). 

• Ahead of Shanghai Henlius Biotech (2696 HK)‘s EGM and Court Meeting on the 22 January, the focus has shifted to Loyal Valley Capital (LVC)’s continued buying in the market.
• After the close of market last Friday, LVC held 7.8295%, above the 7.826% blocking stake. That % was as at 9th January. I assume LVC are still buying.
• Yet if you analyse how LVC has traded in and out of Henlius, they are not in it to block. They’re in for the back-end scrip option.  

• 95% of the way through the review period, there could be 3 changes for the SSE STAR50 (STAR50 INDEX) and 8 changes for the STAR100 Index.
• We estimate turnover of 4.1% for the STAR50 INDEX and 9.3% for the STAR100 Index. The net round-trip trade is CNY 14.1bn (US$1.9bn).
• The forecast adds to the STAR50 INDEX have outperformed the forecast deletes with steady outperformance over the last 3 months; the performance for the STAR100 Index is a lot better.

• Imugene Ltd (IMU AU) announced dosing of the first Australian patient in the Phase 1b clinical trial of its allogeneic CAR T-cell therapy azer-cel in diffuse large B-cell lymphoma.
• Azer-Cel is one of the few allogeneic CAR T-cell therapies currently being evaluated in Australia. Azer-cel has potential revenue opportunity of $2.5B per annum.
• Imugene intends to raise A$46M through convertible bonds and warrants. Cost savings initiatives provide cash runway into late 2025. Early-stage pipeline and fund raising requirement make Imugene a risky bet.

• Since the room for China’s medical insurance fund to continue to increase reimbursement for high quality innovative drugs is still large, we are optimistic about 2025 NRDL negotiation.
• Although it’s inevitable trend for commercial insurance to cover innovative drugs, it won’t truly improve the payment end until the contribution of commercial insurance to hospital revenue increase to 10-15%.
• Due to the complexity of the transaction, Haier Biomedical and RAAS terminated their merger. We think disagreements would easily emerge regarding the core issue in this transaction (i.e. the price).

• Halozyme Therapeutics reported strong financial and operational results for the third quarter of 2024.
• The company achieved a 34% increase in total revenues, reaching $290 million, primarily driven by a 36% increase in royalty revenues, which set a new record at $155 million.
• The growth stemmed largely from the expanded adoption of the ENHANZE drug delivery technology, especially through products like DARZALEX subcutaneous, Phesgo, and VYVGART Hytrulo.

• WuXi AppTec (2359 HK) aims to raise around US$150m via selling around 3% stake in WuXi XDC Cayman (2268 HK).
• WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• HCA Healthcare recently held its third-quarter earnings call, and the insights provided offer a complex view of the company’s current position and future outlook.
• The financial results reflected strong performance despite notable challenges, particularly from recent hurricanes.
• Positively, HCA Healthcare reported substantial year-over-year growth in several key financial metrics.

• Hisamitsu Pharmaceutical Co (4530 JP) reported single-digit revenue growth and net profit growth in low-teens during 9MFY25, on the back of 13% YoY growth in Salonpas focused OTC segment.
• Rx business revenue grew 4% YoY as new products such as Zicthoru, Apohide, Combipatch, Vivelle-Dot etc clocked healthy numbers.
• Hisamitsu raised its FY25 guidance for revenue by 1% to ¥154B, operating profit by 24% to ¥18B, and net profit by 24% to ¥20.5B.

• Feature article: Hardman & Co Healthcare Index, 2024 – Tough year for Life Sciences By Dr Martin Hall The main function of the HHI is to monitor the performance, and to highlight the attractiveness, of life sciences investments over the long term, and to try to identify those stocks that have disruptive technologies that consistently allow them to outperform both the index and the markets.
• Many of the 53 constituents of the index are high-risk, with micro-capitalisations and a long way from profitability.
• Despite this, some companies can still make extremely attractive returns for investors.