Daily Brief Health Care: PHC Holdings , Recordati, Medtronic Plc, Innovent Biologics, KMF, Eli Lilly & Co, Fujian Haixi Pharmaceuticals, GE HealthCare Technologies , Retension Pharmaceuticals and more

• Toho Holdings (8129 JP)‘s rumoured JPY200bn proposal for PHC Holdings (6523 JP) implies about JPY1,571. Mitsubishi Chemical and Mitsui sold 3.4m shares on-market near that level, signalling little faith.
• Their selling weakens the deal’s risk/reward: it signals lower deal certainty, and there would be a large overhang of about 20% of the shares if Toho walks away.
• My fair value range remains JPY1,800–2,030, but at the last close, JPY1,595, the risk/reward is skewed to the downside.

• Respighi raised its offer from €51.29 to €53 and extended it to 23 October after the original price attracted almost no independent minority acceptances.
• Despite the “best and final” language, we retain a 10–15% probability of another increase; our conditional expected consideration is €53.31.
• At €53.10 we move from Bullish to Neutral, but would hold existing positions and buy on weakness below approximately €52.50 absent adverse deal news.

• Medtronic (MDT) announced an exchange offer on September 14, 2026 whereby investors can exchange their MDT shares for shares of MiniMed (MMED), Medtronic’s diabetes spin-off.

• This is now an official recommendation.

• I have already bought MDT shares and plan to buy more today.

• Financial Turnaround Completed: Innovent has crossed the threshold into sustainable, high-scale profitability, recording RMB 1.25 billion in IFRS net profit for the first half of 2026 (up 50.2% year-over-year) and amassing an unprecedented RMB 30.2 billion cash pile, fueled by robust core product sales and the US$1.2 billion upfront payment from the Takeda strategic partnership.
• GLP-1 Pricing Moat: Mazdutide (IBI362) holds a strong first-mover advantage as the first approved GCG/GLP-1 dual agonist in China, but faces an aggressive competitive landscape following the expiration of Novo Nordisk’s semaglutide patent in March 2026; Innovent is countering this with a low-cost, in-house manufacturing moat leveraging 140,000 liters of operational bioreactor capacity to achieve rock-bottom COGS.
• De-risked Global Strategy: Moving away from high-risk, solo US/EU launches, Innovent has successfully pivoted to a capital-light, hybrid out-licensing model—evidenced by the US$11.4 billion Takeda deal and the May 2026 Pfizer oncology collaboration—which delegates ex-China clinical execution to multinational pharma partners while preserving significant commercial upside.

• Sustaining 50%+ Operating Margins is Structurally Improbable: KMF’s impressive 55.8% operating margin in 2025 and 51.9% in 1H 2026 are heavily anchored in its legacy business—namely low-tech, high-volume fermented enzyme materials, which accounted for 78.3% of 2025 revenue. As the company pivots toward high-value functional materials like short-chain fatty acids (SCFAs) and GLP-1 Pair, the yield rates will degrade from over 85% to under 25%, drastically increasing purification costs and compressing the margin profile.
• Encapsulation Moat is Niche and B2B-Deficient: While KMF’s Target Delivery System (TDS) provides genuine IP defensibility for specialized applications like water-soluble calcium (AquaShell S) and coated apple cider vinegar, it lacks significant switching costs in the broader B2B food-ingredient sector. Pure-play competitors like Bio FD&C have more robust corporate account networks and superior synthetic biology capabilities, leaving KMF’s expansion into next-generation biomaterials highly vulnerable to customer churn.
• CapEx Overcapacity Will Dilute Near-Term ROE: The upcoming KOSDAQ IPO (targeting a 128 billion to 152 billion won valuation in November 2026) aims to raise 30 billion to 35.6 billion won primarily to construct Plant 2. This massive brick-and-mortar investment will expand manufacturing space but will inevitably drag down KMF’s historical asset-light capital efficiency—which yielded a north-of-40% ROE in 1H 2026—due to front-loaded depreciation and uncontracted capacity.

• Medtronic has spent the past several years trying to reshape itself into a faster-growing, more focused medical technology company, and its $4 billion MiniMed exchange offer has become one of the most visible tests of that strategy.
• The transaction was designed to complete Medtronic’s separation from its diabetes business while effectively using MiniMed shares to retire Medtronic stock.
• However, MiniMed shares have fallen roughly 12% since the offer was announced, reducing the estimated discount available to participating Medtronic shareholders from around 7% toward roughly 3%.

• Eli Lilly has become one of the most recognizable names in global healthcare because of Mounjaro and Zepbound, the blockbuster medicines that helped reshape the obesity and diabetes markets.
• Yet an increasingly important part of the company’s growth story is developing outside GLP-1 drugs.
• Lilly is expanding its oncology portfolio across pancreatic cancer, breast cancer, lung cancer, chronic lymphocytic leukemia, multiple myeloma and other difficult-to-treat diseases.

• Fujian Haixi Pharmaceuticals (2637 HK) was listed in Oct 2025, when it raised around US$126m in its HK IPO. The lockup on its pre-IPO investors is set to expire soon.
• Fujian Haixi Pharma is a commercial stage innovative pharmaceutical company that integrates research and development, clinical research, production and sales capacities.
• In this note, we will talk about the lockup dynamics and possible placement.

• GE HealthCare has moved to deepen its position in molecular imaging through a $945 million cash agreement to acquire Sofie Biosciences from Trilantic North America, with closing expected in the first half of 2027.
• Sofie manufactures PET radiopharmaceuticals and operates a U.S. production network for short-lived radioactive tracers, giving GE HealthCare access to the time-sensitive final mile of radiopharmaceutical delivery.
• The deal also adds a pipeline that includes diagnostic agents targeting gastroesophageal and pancreatic cancers and is intended to sit within GE HealthCare’s Pharmaceutical Diagnostics segment.

• Retension Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company developing medicines for hypertension and cardiovascular diseases. Its product candidate, RTN-001, is a next-generation, once-daily, oral, small molecule PDE-5 inhibitor.
• RTN-001 achieved clinically meaningful reductions in SBP and DBP in two Phase 2 pilot trials, with initial Phase 2b data expected in 2027. A patent extends protection to 2044.
• The company reported cash and cash equivalents of $13,493 thousand, but recurring losses raise substantial doubt about its ability to continue as a going concern.

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