Healthcare

• Krsnaa Diagnostics (KRSNAA IN) expands into B2C, adds new pathology labs, and secures major government contracts for further growth.
• Growth in PPP and retail sectors, improved margins, and expanding service offerings solidify market leadership.
• Krsnaa’s aggressive expansion strategy and diversification indicate strong long-term growth potential with new B2C trajectory and Asset Light Model Expansion.

• Bicara Therapeutics unveiled the terms of its IPO: a clinical-stage biotech company offers ~11.8M shares at the price range of $16.00-$18.00, implying a market cap of ~$800M at the midpoint.
• Existing shareholders do not intend to sell shares in this offering and Bicara Therapeutics shares will list on the Nasdaq under the ticker symbol “BCAX”.
• The biotech company is focused on patients with HPV-negative head and neck cancer, and I view Bicara’s IPO valuation as attractive, with major catalysts coming up in 2025.

• AK112’s HARMONi-2 results were impressive, but there’s still critical data gap before obtaining approval from FDA. The main concern is whether good PFS can be translated into significant OS benefits.
• Akeso will be eligible to receive low double-digit royalties on net sales from Summit. So, Summit is actually a better investment because it has complete global rights of AK112.
• Investors are betting Summit to be acquired by MNCs at a high price.Due to anti-monopoly issue, the narrowing pool of potential buyers would increase the difficulty of Summit being acquired.

• On September 2, 2024, Arrowhead Pharmaceuticals, Inc. (ARWR) announced results from the Phase 3 PALISADE study of plozasiran in patients with familial chylomicronemia syndrome (FCS).
• The trial met its primary endpoint and all key secondary endpoints, including statistically significant reductions in triglycerides (TGs), apolipoprotein C-III (APOC3), and the incidence of acute pancreatitis.
• The data were presented in a late-breaking oral presentation at the European Society of Cardiolog (ESG) Congress 2024 and simultaneously published in The New England Journal of Medicine.

• A group of shareholders are looking to raise around US$1.36bn from selling ~5% stake in Terumo Corp (4543 JP).
• We have covered the background of the deal in our earlier note, Terumo Placement – US$1.4bn Secondary Selldown, Buyback Should Aid Deal Dynamics.
• In this note, we talk about the updates since and look at the performance of some of the past large Japan deals.

• Since the US$1.4 billion secondary placement announcement, Terumo Corp (4543 JP)’s shares are down 3.5% from the undisturbed price of JPY2,771 per share (29 August).
• Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Terumo’s shares have followed the pattern of previous large placements.
• The offering will likely be priced on 10 September. Despite Kokusai and Honda’s disappointing performance, the average large Japanese placement tends to generate positive returns.

• Fosun Pharma will make every effort to promote the success of this privatization. The management has disclosed the afterwards arrangements- Henlius and Fosun Pharma will further expand/integrate in the future.
• Henlius’ revenue is expected to reach RMB6 billion in 2024 and RMB8-9 billion in next 2-3 years. Even if the privatization fails, things are still manageable due to strong fundamentals.
• Fosun Pharma will not stop its capital operation against Henlius, but the plans of re-listing could be based on a new entity. So, the Cash Alternative is a better choice. 

• Nanosonics Ltd (NAN AU) reported significant turnaround, with recording H2FY24 revenue of A$90M, up 14% over the first half, driven by 20% increase in capital revenue in H2 over H1.
• For FY25, Nanosonics guided for accelerated revenue growth of 8–12%, driven by growing capital revenue with greater unit volumes and increasing recurring revenue aligned with growth in installed base.
• The company expects FY25 gross profit margin of 77–79% versus 77.9% in FY24, on higher production volumes in FY25 after reducing inventory in FY24.

• In August 2024, the World Health Organization (WHO) declared mpox a public health emergency of international concern.
• The number of cases of mpox in the Democratic Republic of Congo (DRC) has totaled more than 15,600 this year with 537 deaths.
• In the past month, over 100 laboratory confirmed cases of Clade 1b have been reported in neighboring countries of the DRC.

• 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 announced that two of its vaccine candidates had positive testing data that furthers our belief in the ability of Evaxion to bring multiple life-changing products to market.

Oryzon Genomics has announced the commencement of patient dosing in the investigator-initiated Phase Ib trial evaluating iadademstat as a combination treatment in first-line acute myeloid leukemia (AML). The study, which aims to recruit c 24 patients, is sponsored by Oregon Health & Science University (OHSU). It is designed to evaluate the safety, tolerability and optimal dose of iadademstat when administered alongside standard-of-care treatments venetoclax and azacitidine. It will also test for preliminary efficacy. Oryzon has previously generated encouraging results when investigating iadademstat in combination with azacitidine for newly diagnosed AML patients (ALICE trial) and this new study will explore potential further synergies of the broader combination.

H224 continues to be a rewarding period for Basilea Pharmaceutica, with the announcement of a third successive milestone payment for Cresemba in the last month following strong sales performance (+24% y-o-y growth in in-market sales to US$489m for the 12 months ending March 2024). The latest milestone (US$25m/CHF21m) was triggered by license partner Pfizer exceeding a predetermined sales threshold in Europe. In total, Cresemba has raked in upwards of CHF34m in milestone payments in the year to date (with c CHF32m in H224 thus far), and we expect a further c CHF5m before year-end based on the most recent guidance from management. Beyond Cresemba, we expect the key focus areas for Basilea in H224 to be finalising a US commercialisation partner for Zevtera and the initiation of the first Phase III study for fosmanogepix (in candidemia/invasive candidiasis).

• Catalent, in its first quarter of fiscal year 2024, has displayed a robust start influenced by solid financial performance, despite the ongoing macroeconomic challenges.
• The company reported a year-over-year revenue stabilization excluding the impact of COVID-19, with a noted 5% revenue increase in non-COVID sectors.
• This performance is underpinned by notable demands in gene therapy services and strategic expansions in the GLP1 (glucagon-like peptide-1) domain, which collectively portend a continuation of mid to high-teens revenue growth for the fiscal year.

• Veeva Systems reported its fiscal second quarter results for 2025, showcasing strong performance with totals exceeding guidance.
• For the quarter ending July 31, 2024, the company achieved total revenue of $676 million and a non-GAAP operating income of $280 million.
• These figures reflect Veeva System’s robust product strategy execution, including strategic customer wins and key product expansions, such as the release of Veeva Site Connect and the introduction of Service Center in the CRM suite.

• Ipca Laboratories (IPCA IN) reported 12% YoY growth in domestic revenue to INR8.7B in Q1FY25. The company has delivered market beating growth in both acute and chronic segments.
• Standalone EBITDA margin expanded 312bps YoY to 22.3% (FY25 guidance: 21%). Margin improvement is driven by favorable product mix, lower input costs as well as lower manufacturing and other costs.
• Ipca is reducing FY25 revenue growth guidance to ~9.0% from 10.5–11.0% and raising FY25 consolidated EBITDA margin guidance by 0.5–1.0% to 18.5–19.0%.

• The past “infrastructure-driven demand model” in medical devices has become “an updated model”. The future reasonable demand for medical devices may fall back to a quarter of pre anti-corruption levels.
• Top innovative pharmaceutical companies worth investing in need to meet certain conditions. Currently, there is still a gap between Chinese pharmaceutical companies and companies like Regeneron in various aspects.
• Henlius is of great strategic significance for Fosun Pharma, which actually increases the privatization success rate. Valuation logic of Fosun Pharma should be based on PE/VC firms not traditional pharma.

• Got surprised by KRX adding POSCO Holdings to the Battery Index. Normally predictable rebalancing went off-script with this unexpected move.
• POSCO Holdings, not Posco Future M, replaced Ecopro BM. Plus, Alteogen Inc is replacing SK Biopharmaceuticals in the BBIG, driving notable flow.
• Consider a day trading long POSCO Holdings and short Ecopro BM. Also, a long-short futures basket could be worth exploring for names with big passive flows.

• Cooper Companies’ latest earnings for the third quarter of 2024 showcased the company reaching significant financial milestones while elaborating on strategic achievements and future outlooks.
• The major highlight was CooperCompanies achieving its first-ever billion-dollar revenue quarter, with both divisions reporting record revenues.
• Additionally, the company boasted about margin improvements which supported double-digit earnings growth and record non-GAAP quarterly earnings.

• DWTI announced that the first transplant was performed in a domestic Phase II clinical study of DWR-2206 (Indication: bullous keratopathy, see Note 1 below), a regenerative medicine cell product being developed jointly by DWTI and ActualEyes Inc., and as a result of the follow-up monitoring, the safety of DWR-2206 has been confirmed in order to proceed to a second and subsequent transplants.
• This study is being conducted to evaluate the safety and efficacy of DWR-2206 transplants in patients with bullous keratopathy.
• The first transplant took place in July 2024, and the patient’s progress since the transplant has been smooth. 

• Q1 FY3/25 results reported 10.5% sales growth YoY and declining operating losses, driven by a combination of treatment service growth in the Americas and cost reduction efforts.
• Operating units of the key HAL Medical Lower Limb Type grew 8.3% YoY to 481 units worldwide, indicating moderate but sustained growth YoY at home and overseas.
• Overseas sales made up 71% of the total, demonstrating the company’s focus on geographic expansion. 

• Neuren Pharmaceuticals (NEU AU) shares corrected ~14% over the last one month, as Daybue reported disappointing performance in U.S. and partner reduced 2024 revenue guidance for Daybue.
• Muted U.S. performance of Daybue in 1H24 seems to be short-lived and the drug is expected to accelerate in 2H24 and beyond.
• In 2Q24, the rate of new patient starts was 12% higher than the previous quarter and the rate of discontinuations was 46% lower than in the previous quarter. 

• Agilent Technologies showed resilience in its Q3 2024 earnings, despite facing challenges with a 4.4% revenue decline and continued pressure in sectors like biopharma.
• The company reported $1.578 billion in revenues and an earnings per share (EPS) of $1.32, surpassing the upper end of its guidance by $0.04.
• This performance highlights robust operational management and strategic agility in an environment where many sectors are facing budget constraints.

• Veldona patent granted in Taiwan for treatment and prevention of coronavirus infection, securing 20 years of patent protection.
• The invention patent covers the method and composition of a Veldona-based therapeutic approach to stimulate the immune system by dosing Veldona through sublingual and/or buccal administration to reduce the risk of symptomatic coronavirus infections.
• Sublingual and/or buccal administration allows Veldona to be rapidly absorbed by the oral mucosa, enabling more effective treatment and better drug compliance. 

• We have seen positive progress of the privatization of China TCM, which is still considered an important project on the agenda. CNPGC’s new leadership is very supportive of the deal.
• The SAMR process has begun. There should be no problem to meet the Pre-Conditions. If the approval process takes more time, Long Stop Date would be extended.
• Considering China Resources has decided to acquire Tasly, we think the integration of TCM business by CNPGC is expected to accelerate. We remain optimistic and this deal will get up. 

• Zai Lab (9688 HK) recorded Vyvgart revenue of $10M, $13M, and $23M in 4Q23, 1Q24, and 2Q24, respectively. The company raised 2024 Vyvgart revenue guidance to $80M from $70M earlier.
• Despite strong momentum from Vyvgart, Zai Lab still has a lot of pain points. Decelerating revenue growth from Zejula is one of them.
• Due to its in-licensing business model, Zai Lab has lower gross profit margin of 64–65%, compared with ~80% for a typical innovator biotech company.

• 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 a merger between a SPAC and a Scilex subsidiary that is developing a non-opioid novel injectable corticosteroid, which will set up a spinoff of the combined entity in early 2025.

• CytoSorbents is commercializing its E.U. approved CytoSorb blood purification technology to treat life-threatening conditions in the intensive care unit and cardiac surgery.
• First half 2024 product sales improved 12% from last year while product gross margins rose to 75%.
• 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.

• Solventum (SOLV) is currently undervalued compared to its competitors, trading at only 7.4x EBITDA and 9.1x EPS
• SOLV has strong financial metrics with high gross margins, operating margins, EBITDA margins, and ROE
• The company operates in various growth industries such as wound care, oral care solutions, healthcare information systems, and water purification, presenting a rare opportunity for potential upside of +146% if it were to trade in line with its competitors

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.

• Sonida’s current portfolio is worth $400M
• Potential acquisition value of properties over the next 12-18 months is conservatively $700-800M
• Recent actions have positioned Sonida well to take advantage of upcoming opportunities in the senior living industry, poised for significant growth in the coming years

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.

• Samsung C&T’s holding company ratio is closing in on 50%, driven by the Biologics rally, which has Samsung on high alert for a forced conversion.
• Watch Samsung’s moves to avoid forced holding company status. The old Biologics-for-Electronics swap isn’t viable, so they’ll likely sell Biologics shares to lower the ratio.
• Samsung C&T might sell Biologics shares at a ₩80T market cap. They’ve boosted construction to manage assets and the holding ratio, but beyond ₩80T, risks increase.

• China TCM’s 24H1 results is weaker-than-expected. Net profit YoY growth for the whole year of 2024 could be negative. Based on calculation, without privatization, HK$3.26/share is fair for China TCM.
• The remedial tax is a “one-time expenditure” to clear the “obstacle” so as to smooth the completion of privatization. Weak financial performance in 24H1 should help the shareholder vote. 
• Due to the low base in 2024, 2025 is expected to see an obvious performance rebound.Long-term outlook of TCM granules business is still promising, reasonable share price is above HK$5/share.

• Akeso reported C1H24 top line, non-IFRS operating loss and IFRS net loss 10% above, 13% narrower and 3.5% narrower than our estimates. 
• The most positive takeaway from the result is the Phase III start of CD-47 mAb (AK117), which can potentially be a global first-in-class (FIC). 
• We raised TP from HK$58 to HK$63 and reiterate our TOP BUY.

• DWTI held a 1H results briefing via ZOOM webinar on Friday 8/23 at 13:30, hosted by President Hidaka.
• Several important points came up in his answers to questions from analysts during Q&A at the end of the briefing.
• 1) Dosing in H-1337 PIIb trials in the US has been completed, and in the year-end publication of top-line results, the key expectation is to show non-inferiority of ROCK inhibitor H-1337 (1.0% once daily) versus existing beta blocker Timolol (0.5% twice daily).

• Opthea Ltd (OPT AU) completed enrollment in two Phase 3 trials for sozinibercept in wet AMD. Topline data from these trials are expected by mid-2025.
• During FY24, Opthea raised $295M to extend runway through topline data readouts of Phase 3 clinical trials. Further, in July, Opthea raised $38M through retail entitlement offer.
• Although Opthea is well-funded through mid-2025, any fund requirement beyond that period will be easier to meet amid lower interest rate scenario.

• Merck & Co.’s second quarter earnings call underscored both the progress and challenges faced by the company as it pushes forward in an increasingly complex pharmaceutical landscape.
• The company reported a solid quarter with total revenues reaching $16.1 billion, marking a 7% increase.
• This growth is particularly impressive when considering the 11% increase when excluding the impact of foreign exchange.

• Apollo Hospitals Enterprise (APHS IN) reported strong Q1FY25 result, with 15% revenue growth and a massive 83% jump in net profit. EBITDA margin improved to 13.3% (Q1FY24: 13.0%).
• Sequential improvement is expected in Q2 and Q3. The company believes ARPOB growth will improve over the next few quarters with stronger growth in surgical volume and better case mix.
• The company believes enhanced volume growth, improvement in case and payer mix, and a focus on cost optimization will drive margin expansion by 100bps over the next 3–4 quarters.

• The rumors we’ve heard are that the acquisition price has not yet been agreed upon. Meanwhile, the management of Legend Bio and Genscript may have different views on this takeover.
• The deal has a 50-50 chance of success. If the deal breaks, this is however “a good news” for the investors of Genscript, whose key performance contributor is Legend Bio. 
• The commercialization potential of Carvykti has not yet been fully realized. Regardless of whether there is a takeover offer or not, Legend Bio is still considered a high quality asset.  

• There are 2 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the September rebalance that will be implemented at the close on 13 September.
• There are no surprises for the SSE STAR50 (STAR50 INDEX) while there are 3 surprise adds for the STAR100 Index with the profitability criterion being ignored.
• The adds to the SSE STAR50 (STAR50 INDEX) have outperformed the deletes over the last month and positioning is larger in some stocks compared to others.