Daily Brief Health Care: Dr. Reddy’s Laboratories, Beta Bionic, Akebia Therapeutics, Astellas Pharma and more

• 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+

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• 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.