Health Care Archives | Page 75 of 137 | Smartkarma

• I tally 40 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Two new deal was discussed on Smartkarma this week: Zhaojin Mining Industry H (1818 HK)‘s tilt for Tietto Minerals Ltd (TIE AU); and Teraoka Seisakusho (4987 JP)‘s MBO.
• Key updates took place for: Symbio Holdings (SYM AU), Lansen Pharmaceutical Holdings Co, Ltd. (503 HK), Celltrion Healthcare (091990 KS), and EOFlow (294090 KS).

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• In the IPO space, EcoPro Materials (ECO123 KS), Cello World Limited (CW IN) and Honasa Consumer were bookbuilding in the past week. 
• Given the earnings seasons, there was only an entitlement offer by Treasury Wine Estates (TWE AU), and a cleanup for Ventia (VNT AU). 

• Astellas Pharma (4503 JP) reported just 0.6% YoY revenue growth to ¥767B in H1FY24, while operating profit plunged 57% YoY and net profit decreased 67% YoY.
• Generic competition in Lexiscan impacted topline. Increase in SG&A expenses related to new drug launch and higher amortization of intangible assets, pulled down the operating as well as net profit.
• Astellas has downwardly revised FY24 forecasts for profit items by more than 50% after taking into consideration the increases in higher expenses.

• The average P/B has remained flat since March end, when TSE requested improvements for companies with P/Bs below 1x, and TOPIX has risen in line with the rise in BPS.
• Given the lack of progress in improving ROE, companies have many issues to resolve in improving returns through the appropriate allocation of cash and capital.
• Since it’s no longer possible to show early results simply by leaving it to managers, the use of TOB/MBO will be a shortcut to raising shareholder returns and corporate value.

• The $26.00/share cash offer of Thermo Fisher Scientific (TMO UN) for Swedish Olink Holding (OLK US) started on 31 October. The 74% premium reflects that high-growth, positive adjusted EBITDA targets are rare.
• The offer values Olink at ~12.2x EV/NTM Fwd revenue vs. 6.4x median of peers. Irrevocables total 66%, but the minimum acceptance condition requires acceptances from a high 70.6% of float. 
• Barring any unforeseen circumstances, such as regulatory action, I anticipate the deal closing and set my TP at $26/share. Gross spread is 4.81%.

• During 9M2023, Otsuka Holdings (4578 JP) reported revenue growth of 17% YoY to ¥1,479B, driven by 21% YoY revenue growth in pharmaceutical segment due to 16% growth in global products.
• Despite the recording of impairment losses, operating profit increased 77% YoY to ¥203B, leading to a 460 bps expansion of margin to 13.7%. Net profit zoomed 46% YoY to ¥162B.
• The company has raised 2023 revenue guidance, second time this year. Otsuka now expects 2023 revenue to grow 14% YoY to ¥1,985B, 4% ahead of prior guidance of ¥1,905B.

• ASRT has not had any news to rekindle investor interest since reporting second quarter results. ASRT is scheduled to report third quarter results on November 8, 2023
• Ahead of the news, we are readjusting our expectations for Indocin. We are minimizing the revenue potential from Indocin in our earnings model.
• Going forward, Rolvedon becomes the primary revenue generator. ASRT should generate positive net income with Rolvedon sales ramping

• Back on the 17 August, biopharmaceuticals developer and producer Celltrion Inc (068270 KS) announced a merger with Celltrion Healthcare (091990 KS).
• On October 23rd, shareholders approved the merger. The appraisal rights exercise period commenced on the 23 October and ends on November 13. 28th December is the merger’s effective date.
• Initially, the stock purchase rights limit was set at 1₩tn; however Celltrion Group’s founder/Chairman Seo Jung-jin has removed this limit. That takes care of NPS, which opposes the merger.

• It should be noted that some companies that state that they do not possess takeover defenses also indicate that they will take “appropriate measures.”
• Addition of ROE and % of independent directors to the approval/disapproval of takeover defense agenda is likely an afterthought to add these conditions to favor the introduction of takeover defense.
• It’ll take several years before life insurance companies show signs of change in voting. It’ll be interesting to see how they come to terms with their corporate clients and stewardship.

• In Q2FY24, Cipla Ltd (CIPLA IN) clocked record-high quarterly revenue at INR66.8B (+15% YoY), and EBITDA margin of 26%, driven by double-digit growth across India, North America, and South Africa.
• U.S. business reported highest ever revenue of $229M. India revenue is up 10% YoY, driven by continued market beating performance in branded prescription and trade generics businesses.
• Cipla raised FY24 EBITDA margin guidance from 23% to 23% to 24% with bias towards the higher end. The company started FY24 with an EBITDA margin guidance of 21–22%.

Paradigm announced Q1 results (for the quarter ending 30 September) and a A$30m capital raise to potentially extend its cash runway through to mid CY25. Management attributed increased spending in the quarter to increased clinical and recruiting activity, which translated into a higher net cash outflow from operating activities of A$22.5m (vs A$17.1m in Q423). With the PARA_OA_008 programme now concluded, as well as the upcoming completion of the mucopolysaccharidosis (MPS) VI Phase II trial and anticipated lower costs for PARA_OA_002, management expects R&D spend to decline in Q224, from A$21.9 in Q124 (vs A$16.1m in Q423). At the quarter end, the company had a cash balance of A$33.6m.

• The Appraisal rights exercise period ends on 13 November. If the NPS and other large shareholders exercise their rights in Celltrion Inc (068270 KS), the merger could be in trouble.
• Both stocks are trading close to their exercise price and could be supported due to the companies buying back their shares.
• There will be passive flows from local and global trackers and there does not appear to be pre-positioning. That is likely due to the risk of potential merger cancellation.

• WuXi XDC Cayman Inc (1877628D HK), a leading contract research, development and manufacturing organization (CRDMO), is pre-marketing an HKEx IPO to raise US$500 million, according to press reports.
• In WuXi XDC IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on margins on a downward trend, large customer concentration, high related party transactions and volatile FCF generation.

• Daiichi Sankyo (4568 JP) reported strong H1FY24 results, with double-digit growth in revenue, core operating profit, and net profit, mainly driven by its global mainstay product Enhertu.
• Daiichi Sankyo and Merck entered into a global development and commercialization agreement for three of Daiichi Sankyo’s drug candidates, for a total potential consideration of up to $22 billion.
• Daiichi Sankyo has raised FY24 revenue, core operating profit, and net profit forecast by 7%, 11%, and 17%, respectively. FY24 revenue is expected to grow 21% YoY to ¥1,550 billion.

• 23Q3 results has sounded an alarm for investors. Obviously, the deterioration of financing situations both domestically and internationally has forced WuXi AppTec to readjust projected revenue growth.
• Almost all of the important logic at the moment is negative for CXOs.Revenue growth in TIDES business alone is hard to offset the decline in WuXi AppTec’s other businesses/industry trend.
• After a pullback, investors can bet on the next rebound, but we still recommend taking profits in time, because without persuasive fundamentals, rebound driven by sentiment is difficult to sustain.

Basilea has announced an exclusive evaluation licence and option agreement with South Korea-based iNtRON Biotechnology (KOSDAQ: 048530) for tonabacase, a potential first-class antibacterial of endolysin class. The product candidate could potentially fit well into Basilea’s portfolio of anti-fungal and anti-bacterial products, Cresemba and Zevtera. This announcement follows the recent in-licensing of GR-2397 (an antifungal compound, renamed BAL2062) and aligns with management’s strategic focus to seek anti-fungal and anti-infective synergistic additions to its portfolio. As part of the agreement, Basilea will evaluate tonabacase in a range of preclinical studies which, if favourable, could lead to a licensing agreement for further clinical development, at Basilea’s exclusive discretion and at pre-agreed financial terms. Basilea is making an undisclosed upfront payment to iNtRON and will make an additional payment if it decides to exercise its exclusive option to execute the licence agreement. While the terms of the deal are undisclosed, management maintains that the transaction has no impact on its FY23 financial guidance.

• WuXi XDC Cayman Inc (1877628D HK), a leading contract research, development and manufacturing organization (CRDMO), is pre-marketing an HKEx IPO to raise US$500 million, according to press reports.   
• WuXi XDC ranked No. 2 globally and No. 1 in China among CRDMO for antibody-drug conjugates and other bioconjugates in terms of revenue in 2022, according to Frost & Sullivan.
• The bull case rests on large addressable markets, market share gains, fast-paced revenue growth, strong revenue visibility, a solid balance sheet and ambitious capacity expansion plans.

• WuXi XDC Cayman Inc (1877628D HK) is looking to raise around US$500m in its upcoming Hong Kong IPO.
• WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
• In our previous notes we looked at the company’s past performance, peer comparison, and shared our thoughts on valuations. In this note, we discuss WXDC’s PHIP updates.

• Alfresa Holdings (2784 JP)‘s H1FY24 revenue, operating profit, and net profit are expected to exceed the previous expectations due to greater-than-expected growth in the ethical pharmaceuticals business.  
• Encouraged by the growth in the pharmaceutical market and better-than-expected H1FY24 performance, the company has raised FY24 revenue, operating profit, and net profit guidance by 4%, 30%, and 36%, respectively.
• New FY24 guidance implies, H2FY24 revenue run-rate will be similar to H1F24, while H2FY24 operating profit will accelerate to ¥20.1 billion from ¥15.9 billion in H1FY24.

• We’ve seen increasing global cooperation for ADC pipelines. However, licensing deals alone cannot be used as the only basis for judgment. We still need to wait for solid clinical evidence.
• ADCs are far less “general and popularized” than PD-1. If compare ADC with GLP-1s, the difference is more obvious.How big the real market is for ADC is a question mark.
• WuXi XDC’s share price could perform well after IPO due to positive sentiments towards ADC, but whether its long-term valuation would be higher than peers remains to be seen.  

• 439 companies that will be excluded from TOPIX aren’t expected to face further selling pressure, but 43 companies that remain in TOPIX may have a positive impact in the future.
• Only 43 companies (8.9%) succeeded in exceeding 10 billion yen in tradable market capitalization; compared to 22.3% rise in TOPIX, the stock performance of the TOPIX exclusion candidates were lackluster.
• These companies with small market capitalizations represent a challenge that has made it difficult for them to attract investor attention and to come up with convincing disclosures.

• Intuitive Surgical, Inc. delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• Procedure growth for da Vinci saw a remarkable 19% increase during the quarter.
• System utilization growth remained strong at 6%, down from 9% in the previous quarter but still exceeding historical growth rates.

• This is our first report on medtech giant, Medtronic plc.
• In the Cranial & Spinal Technologies division, Medtronic achieved impressive global growth, with an even more impressive 8% growth in the US.
• In the Surgical Innovations segment, a 7% growth was realized, facilitated by supply improvements and strong performance in Advanced Surgical Technologies.

• Novartis AG delivered a mixed set of results in the quarter, with revenues falling short of Wall Street expectations but above-par earnings.
• The last quarter for Novartis AG was marked by significant achievements, including strong sales growth and margin expansion, leading to a guidance raise for the third time in the year.
• Kesimpta also showed impressive results and other products like Pluvicto and Lutathera demonstrated their potential in earlier disease settings.

• This is our first report on Avantor, Inc, a well-known provider of mission-critical products to the healthcare industry as well as other domains.
• The company delivered a disappointing set of results as the company was unable to meet the revenue and earnings expectations of Wall Street.
• Market trends weakened sequentially, particularly in biopharma, where larger pharmaceutical customers moderated their spending, and small biotech companies faced ongoing funding constraints.

• This is our first report on health-tech player, Align Technology Inc. exceeded analyst expectations in terms of revenue as well as earnings.
• Notably, 195,000 teens and kids commenced Invisalign clear aligner treatment in Q2, marking a 7% sequential increase and a significant 10% year-over-year growth.
• Total Clear Aligner revenues for Q2 amounted to $832.7 million, reflecting a 5.4% sequential and 4.3% year-over-year increase.

• Although it’s important that the quality of companies be maintained and improved through metabolism, the number of listed companies has consistently increased due to the many IPOs and few delistings.
• Many founders used IPOs as a tax-saving measure, and many managers were not thoughtful enough to increase shareholder profits, which is why there were many IPOs and few delistings.
• Delisting through MBO or TOB for parent and subsidiary listed subsidiaries is much more effective than “TSE request” in reducing the number of companies with P/B below 1x.

• Global generics revenue increased 9% YoY to INR61 billion, mainly driven by double-digit growth in North America and Europe generic businesses, partly offset by muted growth in domestic market.
• Revenue from North America generics increased 13% y/y to INR31.7 billion, driven by growing momentum in core portfolio, Mayne integration, and favorable Fx. Pricing environment remains stable.
• Despite increase in SG&A and R&D expenses, EBITDA grew 13% YoY to INR 21.8 billion. Net profit increased 33% YoY to INR14.8 billion. Both EBITDA and net profit topped estimates.

• A group of shareholders raised around US$530m in Mankind Pharma(MP) IPO in May 2023. The pre-IPO shareholders will be released from their lockup soon.
• 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 will talk about the lock-up dynamics and recent updates.

• Mindray’s Q3 revenue growth slowed significantly, dragging down the overall revenue growth. This was related to China’s anti-corruption campaign, the impact of which is expected to linger for some time.
• Our 2023 forecast is revenue up 15-18% YoY. Anti-corruption campaign would lead to declining demand and growth ceiling of domestic medical equipment market, thus negatively affecting Mindray’s future performance growth.
• Investors may need to prepare in advance for Mindray’s future revenue growth to fall to 15%.Based on this, PE TTM of around 30 is reasonable valuation for Mindray, not undervalued.

• Qyuns Therapeutics, a China-based clinical-stage biotechnology company, plans to raise up to US$ 100m via a Hong Kong listing.
• In this note, we examine the company’s core products, namely QX002N, an IL-17A antibody, and QX005N, an IL-4Rα antibody. We also look at the company’s management and pre-IPO investors.
• We are of mixed views for its two core products. We also think the management and pre-IPO investors are of mediocre quality.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments – EcoPro Materials (ECO123 KS), Cainiao Smart Logistics (1437124D HK), VNG (VinaGame) (VNG US) IPOs
• Event-Driven developments – Eoflow (294090 KS), Azure Minerals (AZS AU), Pact Group Holdings (PGH AU), Symbio Holdings (SYM AU), Haitong International Securities Group (665 HK), Hollysys Automation Technologies (HOLI US). 

• M3 Inc (2413 JP) reported 2QFY03/2023 results on Friday. Revenues increased 3.0YoY while OP decreased 7.1% YoY, both revenues and OP fell below consensus estimates by 0.2% and 4.7% respectively.
• Medical Platform’s earnings continue to deteriorate while we are yet to see a meaningful improvement in overseas segment’s earnings to drive the next phase of growth for m3.
• Given continued decrease in profits, we think the company will struggle to meet its full-year guidance suggesting there is further downside to m3’s share price.  

• Aier’s 23Q3 profit growth exceeded expectations. Considering the low base in 22Q4, Aier’s 23Q4 performance could show an obvious rebound. Then, the 2023 full-year results would be more certain.
• Aier has a considerable amount of “off-balance-sheet profits” that can be incorporated into statements in the future. So, although Aier’s growth rate has decreased, it wouldn’t collapse in short term.
• More hidden problems would be exposed in the process of transferring off-balance sheet profits to the on-balance sheet. All the repurchased shares should be cancelled to reduce Aier’s registered capital.

• FMC has put in place a new strategic plan designed to improve operational performance, thereby unlocking value to achieve an operating profit margin of 10-14% by 2025
• FMC has recently faced a potential threat to its dominant market position in renal care: Novo Nordisk. What’s Novo’s next move?
• As the Company’s overall financial and operational performance improve, combined with the market’s realization that FMC is not going anywhere, we conclude that the stock should re-rate

• Siloam International Hospitals booked strong set of 3Q2023 with continuing evidence of the recovery in its core base-case business together with the effectiveness of its cost and efficiency initiatives. 
• The company saw a strong recovery across outpatient visits and inpatient admissions, with evidence of greater treatment complexity along with higher intensity with less time spent in hospital. 
• Siloam International Hospitals continues to focus on digitising its processes to improve both patient experience and its internal processes. Valuations remain attractive versus listed peers.

• I tally 40 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Two new deal was discussed on Smartkarma this week: Sociedad Quimica y Minera (SQM/B CI) tilt for Azure Minerals (AZS AU); and another MBO for Hollysys Automation Technologies (HOLI US).
• Key updates took place for: Energy One Ltd (EOL AU), EOFflow (294090 KS) , and Celltrion Healthcare (091990 KS) 

• The results of the first VBP of TCM formula granules in China were announced. 200 varieties of TCM formula granules have been included, with an average price reduction of 50.77%.
• According to the recently released Statistical Bulletin on the Development of Health Care in 2022, we have listed some key points worth investors’ attention.
• Livzon’s 23Q3 performance was below expectations, which was more related to external factors such as anti-corruption campaign, VBP. However, Chairman’s share buyback proposal indicates possibility of a future reversal.

• On the 17 September, specialty prescription drug manufacturer Lansen Pharmaceutical Holdings Co, Ltd. (503 HK), a perennial takeover target, finally announced an Offer.
• Wu Zhen Tao, NED and Chairman of Lansen, made an Offer for shares not indirectly held, of HK$1.80/share, by way of a Scheme, a 26.76% premium to last close.
• Composite Doc is now out. Court Meeting is the 27th November. Expected last day of trading is the 28 Nov. 28 December payment. IFA says fair and reasonable. Looks done.

• In 3Q23, revenue jumped 2.5x YoY and 12.1x QoQ to KRW231.8 billion, mainly due to the inflow related to Novavax vaccine contract settlement and resumption of flu vaccine production.
• Despite significantly improved Q3 result, SK Bioscience is expected to end 2023 on a weak note, due to the absence of contract manufacturing revenue from Novavax.
• SK Bioscience has applied for EUA for the updated Novavax COVID-19 vaccine in Korea. Once approved, the company targets to distribute the vaccine during 2023–2024 winter seasons in Korea.

• While necessary talent should be sought from both outside and inside the company, it is not good for the company’s future if the most of internal executive directors are male.
• The appointment of women and foreign board members is an effective way to transform the board of directors to ensure transparency and objectivity, without compromising the traditional atmosphere of familiarity.
• Companies with a higher percentage of female board members tend to be more proactive in their corporate governance practices and more diligent about improving profitability and stock valuation.

• The group of companies with lower than 25% female board member will only manage to meet the targets by “matching numbers,” as few companies have high awareness regarding the practice.
• Since the government target of 30% female managers was set in 2005, companies’ awareness remains low. It’s not easy to raise the ratio to 30% by the methods so far.
• There are a number of initiatives that will not progress unless top management is replaced by women, including accelerated promotion of women to management positions and female board members.

• Takeda’s 2QFY03/2024 revenues increased 4.1% YoY beating consensus estimates by 6%. However, Takeda reported an operating loss of ¥49.3bn for the quarter due to impairment losses.
• As we expected, recent setback in some of Takeda’s clinical trials have led to write-downs and triggered a downward revision to full-year profit guidance.
• There has been excessive price reaction to these setbacks, however, Takeda continues to progress with its pipeline development with some newly launched drugs showing great potential.

• CARGO Therapeutics, a clinical-stage biotech company developing treatments for various lymphomas, filed for an IPO to fund its Phase 2 clinical trials of CRG-022, a lead program in the pipeline. 
• The biotech firm was backed by founding investor Samsara BioCapital and top-tier healthcare VC firms, including Third Rock Ventures, Perceptive Advisors, and Nextech Invest.
• The company’s lead program, CRG-022, is focused on patients with large B-cell lymphoma whose disease relapsed and targets CD-22 that has been expressed in 81% to 100% of DLBCL patients. 

• On October 25, Aspira Women’s Health announced that a poster on its in-development miRNA-based ovarian cancer test was presented at the American Association for Cancer Research (AACR) Special Conference in Cancer Research: Ovarian Cancer.
• The poster, titled, “Improving the diagnostic accuracy of an ovarian cancer triage test using a joint miRNA-protein model,” highlighted data showing miRNA’s potential to improve the diagnostic accuracy of non-invasive diagnostic tests.
• The study showed that the addition of miRNA improved the detection of early-stage ovarian cancers and that diagnostic performance improved even further when using a combination of approaches, including miRNA, proteins, and metadata. 

• In 3Q23, Samsung Biologics (207940 KS) reported record high quarterly revenue of KRW1.03 trillion, driven by successful ramp-up of plant 4 and full-scale operation of plant 1–3.
• Cumulative CDMO backlog surpassed $11.8B and the company has secured 14 of the global top 20 biopharmaceutical companies as its clients.
• Encouraged by strong ramp-up of plant 4, Samsung Biologics continues to expect 20%+ revenue growth in 2023. The company targets to complete the construction of plant 5 in April 2025.