Healthcare

• Mesoblast Ltd (MSB AU) got FDA approval for Ryoncil for steroid-refractory acute graft versus host disease (SR-aGvHD) in pediatric patients 2 months of age and older.
• Following approval in pediatric patients, Mesoblast intends to commence a Phase 3 trial of Ryoncil in adults and adolescents, which has larger market size.
• FDA approval enhances conviction on the commercial prospect of the other late-stage product candidates of the company, including Revascor for advanced chronic heart failure and rexlemestrocel-L for inflammatory pain indications.

• Chemed Corporation’s third-quarter 2024 earnings present a mixed performance across its two primary business segments: VITAS Healthcare and Roto-Rooter.
• The company reports strong performance from VITAS, while Roto-Rooter is facing challenges.
• VITAS Healthcare displayed robust growth in the quarter, primarily driven by increased admissions and the successful acquisition of Covenant Health.

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• Japan Eyewear Holdings (5889 JP) continues to be our top pre-event pick for TOPIX Inclusion.
• Core Concept Technologies Inc (4371 JP) is another potential TOPIX Inclusion candidate but it is quite far away from being satisfy the main Section Transfer requirements.

• In 1H24, Hygeia Healthcare Group (6078 HK) reported revenue growth of 35% YoY to RMB2,382 million, mainly driven by a 37% YoY growth in hospital business.
• Hygeia’s gross profit margin contracted 60bps YoY to 31.8%. Lower government grant led to 230bps operating margin squeeze to 21.6%.
• The share price of Hygeia Healthcare has gone down almost 56% in the last one year. Accelerated organic growth and strengthening of margins are crucial to boost valuation.

• X.J. ELECTRICS not only relies on export revenue, but also on ODM/OEM models, with a relatively low proportion of independent brands. Such business model would not bring high profit margin.
• X.J. ELECTRICS’ equity is concentrated in PAN YUN/GUANGSHE PAN, but they have plans to reduce holdings.This makes us feel that actual controllers are more inclined to cash out through IPO.
• Valuation of X.J. ELECTRICS should be lower than Carote, as Carote has established branded business and its revenue proportion in different regions is also “healthier” than that of X.J. ELECTRICS.

• On December 31, 2024, Cocrystal Pharma, Inc. (COCP) announced that the Phase 2a clinical trial of its oral PB2 inhibitor CC-42344 will be continued due to an unexpectedly low influenza infection rate in study participants that were challenged with a H3N2 viral strain.
• The results from the study showed that CC-42344 had a favorable safety and tolerability profile, however due to the low infectivity rate the virology results were not interpretable.
• Cocrystal will now work with the clinical research organization to construct an amendment to the trial protocol to extend enrollment in the study and increase the likelihood of a proper infection rate for data evaluation.

• SigmaHealthcare and ChemistWarehouse shareholders meet on 29 January. If the merger resolutions are approved, Second Court Hearing is on 3 February and the merger will be effective on 4 February.
• Upward migration in one large global index could take place on 13 February while upweights and upward migrations in the S&P/ASX indices should be at the close on 21 March.
• Upward migration in the other global index could take place in March or June. Total passive buying estimate is A$2.76bn. This will be offset by positioning and CWG shareholders selling.

• The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread widened after the initial tightening due to the precondition satisfaction.
• Several readers have enquired about my thoughts on the widening spread. Our conversations have raised several potential concerns that could explain it.
• I think these concerns are unwarranted, and the vote should pass. At the last close and for a 15 February payment, the gross/annualised spread is 4.7%/55.0%.

• Jiangsu Hengrui Medicine (600276 CH) has filed for a listing on the HKEX (388 HK) and reports indicate that the raise will be at least US$2bn.
• In line with the Midea Group (300 HK) and S.F. Holding (6936 HK) H-share listings, the discount on the H-shares could be in the 20-25% range.
• There will be no Fast Entry in any indices but there will be index inclusions in multiple indices if the raise is larger or once the cornerstone investor lock-up ends.

• For Fosun, every major capital operation is the result of careful consideration after a long time. If it is a deal that Mr. Guo fully supports, there’s basically no problem.
• For the privatization, the board of directors of Henlius has no special opposition. We think that this privatization would have no impact on the operation of Henlius in the future,
• As the phenomenon of undervaluation of Henlius is difficult to fundamentally change, the Cancellation Price is attractive for most investors. There’re risks if choosing Share Alternative. Cash Alternative is preferred. 

• Telomir Pharmaceuticals is a preclinical stage company focused on the science of lengthening telomere caps, which the company believes will extend human lifespans and improve quality of life as people age.
• Preclinical tests showed that the company’s signature therapy, Telomir-1, appeared to correct a rare genetic condition that shortens life span, continuing a string of positive test announcements.

• Nearing the end of the review period, there could be 36 adds/deletes across the S&P/ASX family of indices in March.
• Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
• Completion of the merger with Chemist Warehouse in February will set off huge passive buying in Sigma Healthcare (SIG AU) over the February to June period.

• The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
• In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in March 2025.
• The index changes for the March 2025 index rebal event will be announced after market close on 21st February 2025.

• SSI’s 2024 Tracking Portfolio saw a 1% loss, prompting a refined categorization of investment ideas for 2025.
• Kronos Bio terminated its Genentech partnership, impacting NAV estimates and suggesting potential sale or reverse merger.
• Pacific Current Group announced a buyback proxy, with shareholder meeting set for January 30, impacting NAV estimates.

• Kaken Pharmaceutical (4521 JP) enters into a license agreement with J&J for the global development, manufacturing, and commercialization of a STAT6 program, which is being developed by Kaken.
• Kaken will advance KP-723 to the completion of Phase I clinical trials, after which J&J will take over. Kaken will receive an upfront payment of $30M from J&J.
• The deal is a boost for future revenue flow but offers no near-term respite for revenue loss from NHI drug price revision and generic competition for top selling products.

• On December 30, 2024, BrainStorm Cell Therapeutics, Inc. (BCLI) held a conference call to provide a corporate update.
• The company remains on track to conduct a Phase 3b trial of NurOwn in patients with amyotrophic lateral sclerosis (ALS) to support a potential Biologics License Application (BLA) filing.
• During 2024, BrainStorm reached agreement with the FDA on a Special Protocol Assessment (SPA) and the CMC aspects of the upcoming trial, which significantly de-risks the regulatory aspects of the program.

• Anthem Biosciences (1234D IN), a Contract Research, Development, and Manufacturing Organization, has filed DRHP for INR34B IPO. The proposed IPO will be only offer for sale, with no fresh issue.
• Anthem Biosciences is one of three CRDMOs that possess technological capabilities in India across ADCs, RNAi, peptides, and oligonucleotides, which are among the fastest growing in the pharmaceutical industry.
• Differentiated technological capabilities, large clientele, and exposure to commercialized molecules enhance our conviction on the sustainable growth prospect of the company. Industry backdrop is also favorable.

• In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2025 index rebal event.
• We expect two changes for ASX 50, one change for ASX 100, and seven changes for ASX 200. Separately we see 10 ADDs and 8 DELs for ASX 300.
• Sigma Healthcare (SIG AU) is likely to experience major index inflows in March 2025 if the merger completes as planned.

• The third batch of VBP results of the National TCM Patent Medicines were released. Some products experienced over 90% price reduction. The price decline of exclusive varieties was moderate.
• The VBP results of cochlear implants and peripheral vascular stents were released. Both foreign and domestic companies participated in the VBP actively, hoping to increase market share in China. 
• The key is to see whether 2024 full-year performance can meet expectations, which is the bottom line for WuXi Bio. Without a definitive long-term logic, short-term trading is recommended.

• Orum Therapeutics (475830 KS) has lowered its IPO price range to 24,000 won to 30,000 won.
• The IPO offering amount will be between 60 billion won to 75 billion won. The expected market cap of the IPO is between 531 billion won to 664 billion won. 
• Our updated valuation of Orum Therapeutics suggests implied target price of 24,939 won per share, which is 8% lower than the mid-point of the revised down IPO price range. 

• CytoSorbents is commercializing its E.U. approved CytoSorb blood purification technology to treat life-threatening conditions in the intensive care unit and cardiac surgery.
• The company also seeks U.S. and Canadian approval of a second product, DrugSorb-ATR, to reduce perioperative bleeding risk in patients on blood thinners during cardiac surgery.
• Based on the results of its pivotal U.S. and Canadian STAR-T trial, the company submitted for FDA De Novo approval on September 27, 2024, and Health Canada on November 1, 2024, with regulatory decisions expected in 2025.

• Masimo Corporation, a global technology company focused on experienced healthcare solutions, recently reported its financial results for the third quarter of 2024.
• The company’s healthcare segment demonstrated robust performance, with revenues reaching $343 million, showcasing a 12% year-over-year growth.
• This growth was attributed to increased consumable and service revenues, although partially offset by a decline in capital equipment sales.

• Neurocrine Biosciences has presented its third-quarter 2024 results, highlighting both achievements and ongoing strategic initiatives.
• Under the new leadership of CEO Kyle Gano, the company is focusing on strengthening its position as a leading neuroscience organization.
• Its revenue growth has been particularly driven by the performance of its drug INGREZZA, with an impressive $613 million in sales this quarter, translating to 25% year-over-year growth.

• Seres Therapeutics has outlined significant developments and strategic decisions during its third-quarter 2024 update.
• The company achieved notable milestones, primarily around its lead clinical candidate, SER-155, and its corporate financial structure, significantly influenced by the sale of its VOWST program to Nestlé Health Science.
• Seres reported positive data from its Phase Ib clinical trial for SER-155, indicating a potential for reducing bacterial bloodstream infections (BSIs) in patients undergoing allogeneic hematopoietic stem cell transplantation (allo-HSCT).

• Stevanato Group’s third-quarter 2024 financial results present a complex picture that warrants a balanced examination of both its organizational strategies and market dynamics.
• The company reported a modest 2% revenue growth year-over-year, slightly tempered by persistent challenges in its Engineering segment and vial destocking effects.
• These factors influenced management’s decision to lower the full-year 2024 guidance for adjusted EBITDA and adjusted diluted EPS.

• Inspire Medical Systems reported a promising third quarter in 2024, demonstrating significant revenue growth and improvements in profitability.
• The company’s revenue for the third quarter was $203.2 million, up 33% compared to the same period in 2023.
• This growth was predominantly driven by the increased adoption of Inspire therapy, reflected in the expansion into 66 new implanting centers and growth in 13 new U.S. sales territories.

• Ascentage has filed with the SEC to raise up to US$100 million in a US IPO. We think its future market value is expected to surpass that of Hutchmed.
• The outlook of olverembatinib is clear. Takeda can give more possibilities to olverembatinib. 2025 Sales of olverembatinib is expected to reach RMB500 million.Market value contribution from olverembatinib is US$1-1.5 billion. 
• Investors have higher expectations on APG-2575 to be out-licensed to MNCs. We think the peak sales of APG-2575 is expected to surpass that of olverembatinib in overseas markets. 

• Encompass Health reported a solid third quarter 2024, marked by notable increases in key financial metrics.
• The company experienced an 11.9% rise in revenue to $1.35 billion and a 13.4% increase in adjusted EBITDA to $269.3 million.
• The total discharges grew by 8.8%, with same-store discharges up by 6.8%.

Edison Investment Research is terminating coverage on VolitionRx (VNRX), Murray Income Trust (MUT) and NioCorp Developments (NB). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

• Fulcrum Therapeutics reported its financial results and business developments for the third quarter of 2024 and reported that it is realigning its focus towards the advancement of pociredir, an oral HbF inducer intended for the treatment of sickle cell disease, and its preclinical pipeline.
• Previously, Fulcrum Therapeutics had been developing losmapimod for the treatment of facioscapulohumeral muscular dystrophy (FSHD).
• However, the Phase III REACH trial did not demonstrate a significant difference between losmapimod and placebo on the primary or key secondary endpoints.

• O2O has made a huge impact on China’s e-commerce scene in 2024. The Coupang-invented model suits mega cities with dense population and order volumes;
• Online drug O2O, in particular, has gained momentum because drugs, prescription and non-prescription have robust storage and distribution needs on the ground for O2O use;
• Meituan’s drug sales has grown its overall market share from 3.6% in 2022 to 7.1% in 2024. We project it to grow to 12.3% by 2030. 

• Elanco Animal Health’s third-quarter 2024 performance presents a mix of achievements and challenges that form the basis of an investment perspective.
• The company reported a modest 1% organic constant currency revenue growth, driven by contributions from new products like Experior, Adtab, Credelio Plus, and Zenrelia.
• This quarter marked the fifth consecutive one that Elanco has demonstrated growth in its underlying business.

• Fresenius Medical Care demonstrated steady progress in its operational and financial performance during the third quarter, reflecting a focused transformation strategy and resilience amid external challenges.
• The company reported organic revenue growth of 2%, with positive contributions from both Care Delivery and Care Enablement segments.
• Notably, the U.S. same-market treatment growth turned marginally positive at 0.2%, marking a significant milestone, though still tempered by elevated mortality rates.

• Medpace Holdings, Inc. reported its third-quarter 2024 earnings, showcasing a mixed bag of results influenced by both positive performance metrics and notable challenges.
• On the earnings call, company leadership discussed these results and the ongoing dynamics impacting its business.
• One of the highlights was Medpace’s revenue for the third quarter, which reached $533.3 million, marking an 8.3% year-over-year increase.

• Apellis Pharmaceuticals reported its third-quarter 2024 financial results, highlighting key developments and offering insights into future expectations.
• The company, co-founded and led by CEO Dr. Cedric Francois, focuses on targeting C3 to address complement-mediated diseases.
• During the third quarter, Apellis saw progress in commercial demand for SYFOVRE, although net product revenue for SYFOVRE dipped slightly by 1.7% due to factors like higher gross-to-net adjustments and contracting dynamics.

• Shineway’s 24Q1-Q3 performance is disappointing. So, we adjusted our forecast- 2024 Revenue could be about RMB3.7-4 billion, down 11-18% YoY. Net profit could reach about RMB1.05-1.1 billion, up 8-13% YoY.  
• VBP is the biggest headwinds – Injection products/TCM formula granules/OTC medications all face VBP, which brings uncertainties to future performance. It’s uncertain whether the 2025 performance will rebound as expected.
• Shineway seems to have lost growth momentum after COVID-19.Considering large cash balance, it doesn’t make much sense to hold the Company long term if it doesn’t significantly raise its dividend.

• Cassava Sciences is deemed largely worthless with a cult-like retail investor base, making it an attractive target for shorting.
• Their sole asset, simufilam, aims to address Alzheimer’s by restoring the shape of misfolded filamin A, but this approach has raised doubts.
• Dr. Hoau-Yan Wang, a longtime scientific collaborator, is indicted for fraud related to grants associated with their trials, raising questions about the company’s credibility, alongside scrutiny on CEO Remi Barbier.

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.

• Fortrea reported its third quarter 2024 earnings with a mix of positives and challenges.
• The company’s book-to bill ratio was 1.23x, reflecting a strong quarter for new business, mainly driven by large pharmaceutical clients and notable biotech wins across therapeutic areas like oncology, diabetes, dermatology, and autoimmune disease.
• The company underscored its strategic position in the clinical research organization (CRO) arena, demonstrating balance between clientele from major pharmaceutical firms and biotechnologies, which made up 50% each of their business.