Daily Brief Health Care: China Traditional Chinese Medicine, Zai Lab , Scilex Holding , CytoSorbents , Solventum, Sonida Senior Living and more

• 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.