Health Care Archives | Page 70 of 137 | Smartkarma

• Concord’s financial performance seems improving on the surface,but a closer look reveals that the sudden explosive revenue increase in 2021 was mainly due to an acquisition, with potential risks behind.
• We’ve doubts about Concord’s endogenous growth capability. If Concord’s hospitals cannot make a profit, then any further expansion is just a beautiful story and cannot bring expected returns to investors. 
• Concord conducted a total of four rounds of financing, with a valuation of approximately RMB7.2 billion. However, based on our analysis, its valuation could be lower than peers.

• Thonburi Healthcare Group (THG TB) has underperformed most of its peers over the last six months. Thus far this year, the company’s financial performance also remained unimpressive.
• Despite a healthy 29% YoY increase in normalized medical services revenue, normalized net profit decreased 8% YoY in 3Q23 as the company experienced significantly higher financial costs.
• Although the company is repaying debts, debt level is still elevated and is expected to remain so in the near-term due to upcoming capex plans.

• In the Chinese pharmaceutical industry, stock selection strategies can be divided into “defensive” and “offensive”. We need to combine the judgment of the cycle to choose a stock picking strategy.
• Domestic innovative pharmaceutical companies have the opportunity to create a high gross-margin incremental market of over RMB1 trillion through successful internationalization, but we pointed out the logical flaw behind.
• We analyzed the key points of Hangzhou Tigermed Consulting (3347 HK). It seems insiders don’t have firm confidence in the prospects, so why should investors rush to buy the bottom?

• Drugs maker/packager group Probiotec Ltd (PBP AU) has entered into a Scheme with Indonesia’s Pyridam Farma (PYFA IJ).
• Pyridam is offering Probiotec shareholders A$3.00/share (in cash, or a 19% premium to the undisturbed price). Interim and final  dividends up to A$0.035/share and A$0.04/share, respectively, may be added.
• It has not been declared final. The Offer has the board’s backing. A Scheme Meeting is expected to be held in May with possible completion in early June 2024.

• Probiotec Ltd (PBP AU) has entered a scheme implementation deed with Pyridam Farma (PYFA IJ) at A$3.00 per share, a 19.0% premium to the undisturbed price (21 December).
• Including potential dividends, the total potential offer price is A$3.075 per share. The scheme requires Probiotec shareholders, Pyridam shareholders, FIRB and Indonesia OJK approvals.
• The offer is attractive and represents an all-time high. At the last close, the gross spread of the base offer and total potential offer is 3.1% and 5.7%, respectively.  

Actinogen Medical has opened the first investigational study site for its Phase IIb XanaMIA trial of lead candidate Xanamem in patients with cognitive impairment (CI) associated with mild-to-moderate Alzheimer’s disease (AD). The study plans to enrol c 220 patients, who will be randomised to take Xanamem 10mg or placebo once daily for 36 weeks. The trial will concentrate on Australian test sites for the first 100 enrolled patients, and initial efficacy and safety results will be analysed when these patients reach 24 weeks of treatment. The results, expected in H1 CY25, could serve as a significant catalyst if data are positive. Nearer term, the next material milestone will be results, expected in Q2 CY24, from Actinogen’s Phase IIa XanaCIDD study in patients with CI and major depressive disorder (MDD). A positive XanaCIDD readout may lead to a share price re rating, and thereby may potentially accelerate the expansion of XanaMIA to US and global clinical study sites.

AFT Pharmaceuticals has bolstered its R&D pipeline with the addition of a new product candidate, HY-090, a locally acting novel molecule, targeting Burning Mouth Syndrome (BMS), a condition with no curative treatments. AFT will be developing the asset in collaboration with Hyloris Pharmaceuticals (existing development partner for Maxigesic IV). While Hyloris will be responsible for product formulation, manufacturing and commercialisation in Europe, AFT will take care of clinical trials and related modalities, as well as commercialisation ex-Europe. The US activities will be co-managed by the two partners. HY-090 is one of two R&D assets that was already in active consideration by AFT and diligence work is ongoing for another three. A robust R&D program has always been a focus area for AFT and we believe an active pipeline will be instrumental in driving growth and increasing the company’s international footprint.

Basilea recently expanded its antifungal and antibacterial product pipeline with three new assets, including the latest addition, fosmanogepix. As a broad-spectrum antifungal (including multidrug-resistant fungi), fosmanogepix has a novel mechanism of action, a key differentiator in the rise of antifungal drug resistance. Two Phase III trials are expected to commence in mid- and late-2024 (in candidemia/invasive candidiasis and invasive mould infections, respectively) and a successful launch has the potential to refill the pipeline as the company’s lead asset Cresemba matures. We update our estimates and valuation to reflect the revised FY23 guidance and incorporate the potential contribution from fosmanogepix. Our overall valuation increases to CHF910.4m or CHF76.0/share (from CHF797.8m or CHF66.6/share previously). In the more immediate term, we view the US New Drug Application (NDA) decision on Zevtera (PDUFA date of 3 April 2024) as the next big catalyst for the company.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Synlab’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial”, but Disclosure is “Weak”. 

• HLB Inc (028300 KS) announced that it has decided to transfer listing from KOSDAQ exchange to KOSPI exchange.
• HLB currently has a market cap of 6.5 trillion won and HLB is likely to be included in KOSPI 200 in 2024. 
• One of the key reasons why the company has a large market cap is due to its Rivoceranib liver cancer drug which is being reviewed by the U.S. FDA. 

• Since the ROE has been hovering around the 9% ceiling, the challenge is that few companies could present future outlook convincing enough to raise expectations of sustainable ROE growth.
• Since stable BPS has higher correlation with TOPIX than EPS, investors trust a company that accumulates cash flow in shareholders’ equity to sustainably increase profits than to temporarily increase profits.
• Since it’s been confirmed that Tobin’s Q of companies with more cash on hand is higher, the stock valuations of companies with higher cash flow margins tend to be higher.

• Emcure Pharmaceuticals has re-submitted DRHP to the SEBI for the second time. The IPO consists of a fresh issue of INR8 billion and an offer-for-sale of up to ~14M shares.
• In the re-submitted DRHP, the company has trimmed the sizes of both the fresh issue and OFS. Emcure originally planned to launch IPO its in 2022.
• Emcure has added latest financial performances in re-filed DRHP.  During H1FY24, revenue from India increased only 3% YoY to INR16.4M, due to lower sales of anti-viral HIV products.

• Japan’s merger arb is facing an unusual situation: six merger arb situations (>US$100 million market cap) where the shares have consistently traded through terms.
• We evaluate the bumpitrage potential of these six Japanese merger arb situations on qualitative and quantitative metrics.
• Based on our analysis, the ranking as measured by the highest bumpitrage potential in descending order are T&K Toka, IJTT, Taisho, Shidax, Benesse and Tokyo Rakutenchi.

• Pfizer seems to be the worst-performing large pharma stock of 2023 after it lowered 2024 forecast. The Company continues to grapple with plummeting demand for its COVID products
• The acquisition of Seagen can’t turn things around. Except a few products that are still able to maintain growth, sales of vast majority products that we’re familiar with are declining. 
• The growth engine of Pfizer in post-pandemic era is still uncertain. Even though Pfizer’s share price has fallen sharply, this may still not be the time for bottom fishing.

Recce recently reported that the Australian government has committed to providing up to A$55m in future cash rebates to reimburse upcoming R&D expenditure directed towards the company’s proprietary synthetic anti-infective programmes to June 2025. Notably, this binding agreement with the Australian government’s Department of Industry, Science and Resources (AusIndustry) extends the rebate programme that customarily reimburses 43.5% of eligible R&D expenditures incurred within Australia, to cover the anti-infective R&D activities Recce undertakes anywhere in the world. We view this as key given our expectation that US and global clinical trials will be needed to maximise the commercial potential of Recce’s products, notably lead candidate RECCE® 327 (R327). While our model already assumed the Australian government would reimburse 43.5% of Recce’s overseas R&D costs, there was a minor degree of uncertainty on whether this would be the case. Hence, the signing of this binding commitment with AusIndustry helps de-risk future funding needs for Recce as it advances its anti-infective programmes, notably R327 in sepsis/urosepsis and in complicated urinary tract infection (UTIs).

• While OP Margin did not improve much, companies did execute a certain degree of shareholder return in the previous fiscal year, but it did not significantly increase ROE.
• Since companies with lower profits are also increasing shareholder returns, the dividend payout is likely to rise a bit more. It will be interesting to see how much ROE improves.
• There is a correlation between ROE+DOE and TOPIX. Since TOPIX has risen significantly this year, it will be interesting to see if ROE+DOE actually increases in the future.

• The market seems “not excited” with fruquintinib’s FDA approval.We analyzed the potential reasons behind.Beyond boosting market sentiment when license-out deal is announced initially,its practical impact on valuation could be limited.
• HUTCHMED’s financial performance is good. The deal with Takeda helps to relieve cash-flow pressure. We think HUTCHMED is a relatively safe bet for investors as eventual breakeven is drawing near.
• If based on conservative calculation, market value of about US$1,455-2,055 million is a good place to long.When market value is higher than US$3,500 million, it’s time to consider taking profits.

• Neuren Pharmaceuticals (NEU AU) has announced positive top-line result from its phase 2 clinical trial of its second drug candidate NNZ-2591 in children with Phelan-McDermid syndrome (PMS), a genetic disorder.
• PMS has an overwhelming unmet medical need. This is an attractive commercial opportunity with an estimated addressable patient population of 24,000 in the U.S. alone.
• NNZ-2591 has the potential to become the first FDA-approved drug for PMS. Neuren is also conducting phase 2 clinical trials of NNZ-2591 in children with three other neurodevelopmental disorders.

• Pacific Smiles (PSQ AU), an operator of dental centers, has announced – and immediately rejected – a non-binding proposal from Genesis Capital Manager.
• Genesis, holder of 18.75% of shares out, has offered A$1.40/share, by way of a Scheme. That’s a less-than-inspiring 17.1% premium to last close. 
• PSQ calls the Offer “opportunistically timed”. That has merit, after the share price recently touched a multi-year low.  Separately, PSQ is seeking a new CEO after Mckenzie resigned in August.

• The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
• SOUTHBOUND and NORTHBOUND flows were both sells, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 100+bp. Liquidation by overseas investors feels finished. 
• Time to go long Hs vs As for the new year at 52wk wide discounts. 3 Short H/A pairs now switched to long. 3 new pairs long this week. 

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts to play with.
• Last week saw NORTHBOUND net sell RMB 18.6bn of A-shares on slightly lighter activity. Friday saw large NORTHBOUND net buys early in the day but ended a net sell.
• Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still. 

• TSE data (April 2022-October 2023) shows that the correlation between TOPIX and ROE for prime market listed companies is extremely low, while the correlation between TOPIX and BPS is high.
• It may be that a company that can sustainably increase cash flow and build up net assets is more trustworthy than a temporary increase in profits.
• It’s presumed that the company increased EPS to the extent that it did not reduce ROE and implemented a certain degree of shareholder return to slow the increase in BPS.

• Recent business updates of WuXi Bio led to a decline in WuXi AppTec’s share price and changed investors’ expectations for CXO. Now is the time to adjust forecasts.
• We analyzed the growth rate of various business of WuXi AppTec in 2024. In a neutral scenario, growth next year could fall short of management’s guidance.Reversal in 2025 is uncertain.
• If WuXi AppTec “unexpectedly” receives blockbuster orders, which are large enough to hedge against the downward trend of WuXi AppTec’s other businesses, then it will help to change performance expectations.

• 2023 NRDL negotiation results were released. We’re seeing the rules of NRDL renewal negotiations tilt toward innovative drugs, leading to lower price reduction, but there has been no fundamental change.
• The record-breaking US$8.4 billion deal involving BMS and Sichuan Biokin Pharmaceutical (688506 CH) (SystImmune) is not without risk, though. We still recommend to remain rational.
• The issue facing Shanghai Haoyuan Chemexpress (688131 CH) is higher revenue but lower margins. Valuation will likely experience further declines due to lock-up expiry and share reduction.

• In 3Q23, Boryung Pharmaceutical (003850 KS) reported 15% YoY growth in revenue to KRW208B, driven by 7% YoY growth in prescription drugs, the slowest growth in the last three years.
• Prescription drug revenue growth slowed due to the huge shortfall in revenue from the diabetes drug Trulicity caused by supply shortage. We expect slowdown in Trulicity revenue is temporary.  
• Despite losing patent protection in February 2023 on ARB monotherapy, Kanarb drug family is showing no fatigue due to increasing preference for combination drugs in the market.  

• HCG reported a strong Q2FY4 with revenue growth of 16% YoY and 5.7% QoQ. EBITDA margin expanded 120bp QoQ to reach 17.8%.
• Emerging centers are scaling up well with revenue growing at 29% YoY in Q2FY24. Matured centers’ revenue also grew at a healthy pace of 13% YoY.
• HCG is continuing to upgrade infrastructure of existing hospitals. It added 3 robotic surgery machines across 3 centers. It operationalized 4 new LINACs and plans to install six more LINACs. 

• An increasing number of companies rehire senior employees until age 65 to address labor shortages and pass on skills, but there are challenges in retaining senior employees and maintaining loyalty.
• Daikin is expected to be effective in motivating senior employees and passing on skills in terms of extending employment to age 65 without lowering wages. 
• Daikin’s board members are older, so they fully understood that age was not an obstacle to senior employee success. On the other hand, Daikin faces many challenges in diversity.