Daily Brief Health Care: Olympus Corp, Osstem Implant, Mankind Pharma, Ramkhamhaeng Hospital, Krishna Institute of Medical Sciences, CanSino Biologics Inc, Basilea Pharmaceutica Ag, Aft Pharmaceuticals and more

• Olympus has been sold down relatively hard in the last couple of months. At the same time, we are at crunch time for the cancellation of the US ADR.
• This may create short-term overhang, but the medium-term overhang from substantial foreign net buying in H1 when USDJPY was going up may be larger. 
• This insight looks at the relative performance vs Peers, vs forward earnings expectations, USDJPY, etc.

• Just over a year ago, leading Korean dental implant and dentistry supply company Osstem Implant (048260 KS) announced the largest-ever embezzlement case in Korea. The stock was suspended.
• There were fears about forced selling by the founder, and PE funds circled. Activist KCGI probably bought in Q3 but built a 5+% stake by end-December 2022.
• Korean PE Firms MBK and Unison Capital have now launched an MBO-style Tender Offer to buy 2.4-11.2mm shares in the company at a sharp premium to the pre-activism undisturbed price.

• Mankind Pharma  is looking to raise about US$1bn in its upcoming India IPO.
• MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
• In this note, we talk about the positive aspects of the deal.

• In this insight, we take a look at the potential ADDs/DELs for the SET50 index rebalance in June 2023.
• Based on the latest available data, I expect 3 ADDs/DELs but there are multiple names lurking close to the border.
• Srisawad (SAWAD TB)  and Sansiri Public (SIRI TB) are leading the SET50 and SET100 Reserve Lists respectively and could become intra-review ADDs if the DTAC-TRUE merger closes in 1H 2023.

• Krishna Institute of Medical Sciences (KIMS IN) is seeing a continued business recovery reflected in improving operating metrics. In Q2FY23, KIMS reported record high quarterly sales, EBITDA, and footfall.
• KIMS is following a disciplined growth strategy and plans to grow into markets that are adjacent to the current core markets of Andhra Pradesh and Telangana.   
• KIMS has set foot in a new market of Maharashtra, outside of its core market. With lower margins from acquired assets than matured hospitals, KIMS has scope for margin improvement.

• CanSino Biologics Inc (6185 HK) disclosed plans to publicly list in Switzerland, but the story of the fourth dose of COVID-19 vaccine is difficult to boost its stock price/valuation. 
• According to CanSino’s management,MCV4’s commercialization faced some challenges, which means 2022 annual performance may not be good. 2021 would probably be a high point of CanSino’s performance in recent years.
• Share price could pullback when 2022 annual report is released, which offers a better opportunity if investors want to go long, considering CanSino’s long-term investment value analyzed in prior insights. 

On the heels of management’s January upward guidance revision, continued strong execution of Basilea’s outlined strategic plan (February 2022) has positioned the company to report (on a preliminary basis) its first year of operating and net profit. Management anticipates FY22 operating profit of c CHF18m, up from the previously guided CHF10–15m loss. We view this as a notable milestone for Basilea, which was achieved despite overall macro market challenges. The company continues to address an important unmet need in anti-infectives and its worldwide traction of the company’s antifungal product, Cresemba (isavuconazole), is a key driver of revenue. In FY23, we expect the company to maximize the potential of Zevtera in the US (new drug application filing anticipated in H123) while also refilling its development pipeline. Our valuation and financial estimates are under review and are expected to be updated following the release of full FY22 results on February 14.

AFT Pharmaceuticals has announced an exclusive licensing and distribution agreement for the Maxigesic intravenous (IV) formulation with Salus Pharmaceuticals (a Slovenia-based wholesaler of pharmaceutical products) for nine Eastern European countries across the Balkan and Baltic regions. Maxigesic IV is already registered in five of the nine countries, with launches planned in CY23. AFT will also file registration applications for the remaining countries during the year. Maxigesic IV is registered in 41 countries globally and has been launched in more than 10, including the key markets of France and Italy in November 2022. As AFT awaits Maxigesic IV approval in the US, we see this new agreement as an encouraging step towards expanding its international presence, in line with its strategic priorities for CY23.