In today’s briefing:
- STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises
- BeiGene (6160.HK/ONC US) 2024 Results – The Performance Is Outstanding
- Best Idea of 2025: Medexus Pharmaceuticals
- Strategic Reviews, Mergers, and Asset Sales: Analyzing Upside Potential in Active Portfolio Ideas
- SSI Weekly Newsletter Highlights: SWTX and NATH Potential Buyouts, LQDA FDA Update and More
STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises
- There are 3 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the March rebalance that will be implemented at the close on 14 March.
- The last-minute methodology change could lead to under/over positioning on some names and those stocks could move the most over the next few days.
- Performance has been mixed in the changes to the STAR50 INDEX but the outright adds have continued to outperform the outright deletes for the STAR100 Index.
BeiGene (6160.HK/ONC US) 2024 Results – The Performance Is Outstanding
- BeiGene’s 2024 results beat expectations, mainly driven by strong sales growth of BRUKINSA. In 2025, BRUKINSA’s sales would exceed Calquence for the first time.But sales performance of tislelizumab remains lackluster.
- Based on positive trend, turning losses into profits is just a matter of time. BeiGene is expected to achieve positive GAAP operating income in 2025, which is an inflection point.
- US$24.5-26.5 billion is the valuation bottom line, below which BeiGene is undervalued. Our forecast is that market value would reach US$37.5 billion. So, there is still upside potential in valuation.
Best Idea of 2025: Medexus Pharmaceuticals
- Medexus (MDP.TO / MEDXF) is my best idea for 2025. The stock trades at a distressed valuation despite the current launch of a new drug that could double revenue and triple EBITDA within 3 years.
- I see 100% upside in 2025, but there is the potential for 400% to 500% upside over a three year period.
- Downside is limited as Medexus has minimal debt (net debt to EBITDA of 0.7x) and a stable base business.
Strategic Reviews, Mergers, and Asset Sales: Analyzing Upside Potential in Active Portfolio Ideas
- Sage Therapeutics rejected Biogen’s $7.22/share offer, initiating a strategic review for potential sale, indicating a possible higher premium.
- SPAR Group’s merger with Highwire Capital faces uncertainty due to funding issues, with potential for significant stock price decline.
- Kronos Bio’s strategic review follows clinical trial discontinuation, with potential sale or reverse merger, trading below net cash value.
SSI Weekly Newsletter Highlights: SWTX and NATH Potential Buyouts, LQDA FDA Update and More
- SpringWorks Therapeutics (SWTX) is in late-stage acquisition talks with Merck KGaA, with a potential buyout offer at $85/share.
- Liquidia (LQDA) had its FDA case denied, delaying Yutrepia’s market entry until May 2025, with commercialization on track.
- ContextLogic (LOGC) received a $150m strategic investment from BC Partners, enhancing its cash balance and NOL monetization potential.
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