Health Care Archives | Page 77 of 137 | Smartkarma

• Latest filings on Insulet Corp (PODD US)’s voluntary dismissal without prejudice only to Flex (FLEX US), Eoflow (294090 KS)’s motion to restart Korean sales, dismiss a count and a timetable.
• Examining the court filings suggests Medtronic Plc (MDT US)’s access to court unredacted documents is restricted. Medtronic’s limited access makes evaluating the transaction’s potential litigation risk challenging.
• Eoflow’s defence in the court documents is based on reverse engineering and procedural arguments. The KRX will rule on Eoflow’s share trading suspension by 1 November.

• Cash usage and return targets should be presented to investors along with cost of capital, but few companies can successfully envision future design due to poor planning for growth investments.
• Since there’s a significant positive correlation between ROE+DOE and TOPIX, the company should optimize its cash allocation by demonstrating enhanced shareholder returns until it can design a growth investment plan.
• Ajinomoto, which provided cost of capital projections and ROIC targets by business segment, should be commended for its constant communication with investors seeking better disclosure in good times and bad.

• Should the nominated directors, to be voted on by EOFlow (294090 KS)‘s shareholders at the November EGM, include Medtronic Plc (MDT US) executives, then game on.
• Fast Retailing (9983 JP) STILL has a Nikkei 225 problem, which means it probably has to underperform Nikkei 225 slightly between now and the Base Date (31 July 2024).
• JMDC (4483 JP) has been one of the more annoying partial tenders out there. Even post-facto, it is tough to know what the disposition was. This is extraordinarily vexing.

• Due to IPO policy adjustment on SSE STAR Market, investment/financing for innovative drugs should continue to deteriorate.But the positive side is the innovative drug industry is emerging from the bottom.
• For the three hot fields in pharmaceutical industry (BsAb, ADC, CGT), we analyze their position and pecking order, which should be ADC > BsAb > CGT at the current stage.
• To better understand the investment logic of Fosun Pharmaceutical, it is necessary to fully understand the ecosystem/operational model of Fosun Group. Fosun Pharma’s role is just a “chess piece”.

• Hanall Biopharma (009420 KS)‘s licensed partner Harbour BioMed announced that the China’s NMPA has officially accepted the Biologics License Application for batoclimab for the treatment of generalized myasthenia gravis.  
• Immunovant announced positive initial result from the single-ascending dose portion of the Phase 1 trial of IMVT-1402. Initial data from the multiple-ascending dose cohorts are expected in October/ November 2023.
• Hanall and Daewoong have initiated phase 1 clinical trial of HL192 for the treatment of Parkinson’s disease, and dosed the first subject. The initial results are expected in 2H24.

• They said that EOflow has made a strategic decision not to raise any objections to the court’s injunction to temporarily suspend the sale and marketing activities of EOPATCH.
• They stated their commitment to making efforts to actively prove that they are not subject to KRX’s substantive delisting examination. Hence, they aim to resume trading from November 1st.
• They subtly hinted at a degree of caution, suggesting that the final agreement with Medtronic might undergo slight modifications to align with the outcome of this preliminary injunction.

• Ansell Ltd (ANN AU) reported 11% YoY decline in revenue to $1,655M in FY23. Healthcare business experienced significant customer destocking through FY23, leading to 21% YoY decline in segment revenue.
• Ansell has outlined an investment program to improve productivity and accelerate digitalization for total cost of $70–85 million. The program calls for production as well as job cut.
• Strong headwinds in the glove sector are expected to continue as the global oversupply situation persists. Ansell expects FY24 adjusted EPS to be $0.92–1.12 (down 3–20% YoY).

• Given that embedding diversity within company is essential for the company’s growth and resilience, it’ll be up to management leadership to decide whether this should be promoted as management strategy.
• Companies with more women in the workforce tend to have higher stock prices. It can be assumed that the company is hiring talented, skilled, and necessary personnel regardless of gender.
• Analysis shows that companies with a higher percentage of female board members contribute more to value creation. Companies that promote board diversity are also keen on diversity throughout the company.

• On the 7 August, aged care provider Estia Health (EHE AU) and Bain Capital entered into a Scheme Implementation Agreement at A$3.20/share (less any dividends), a 50% premium to undisturbed
• The Scheme Booklet is now out. A shareholder meeting will be held on the 15th of November with implementation expected on the 30th of November. 
• Estia paid a fully franked dividend of A$0.12/share on the 15th of September. Currently trading  tight to the adjusted terms of A$3.08/share. This still needs FIRB approval.

• CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
• In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in December 2023.
• A couple of baskets I suggested in my last insight have both outperformed the CSI 300 index by more than 2% in less than a month.

• Suzuken Co Ltd (9987 JP) reported better-than-expected Q1FY24 result, due to an increase in specialty drug distribution contracts and a larger than expected contribution from products related to COVID-19.
• In Q1FY24, revenue increased 4% to ¥573.6B, driven by 4% YoY growth in pharmaceutical distribution business, due to increased sales of new drugs such as specialty drugs and COVID-19 therapeutics.
• The company guided for FY24 revenue of ¥2,231.9B, down 4% YoY. Operating profit is expected to decline 48% YoY to ¥17B. Net profit is guided at ¥13B, down 36% YoY.

• Results for the Omron Corp (6645 JP) Partial Tender Offer for JMDC (4483 JP) are out. 
• The Pro-Ration was 51.63%, at the lower end of my initial estimate of 50-58% range, and at the higher end of my revised range (42-56%).
• The pro-ration, the nature of the shapes (technical term) tendered, and what that suggests for Noritsu Koki’s position suggests the back end could be more squeezy than not.

• On the 6th of October, a US district court judge entered a preliminary injunction (PI) against EOFlow (294090 KS), pending a trial. This development should have been expected.
• Less expected was the suspension of EOFlow shares today, and the cessation of sales globally. 
• The latter measure appears extreme, noting the PI addresses only sales in the US, which EOFlow is not permitted anyway, without FDA approval. There’s clearly more than meets the eye.

• In reaction to the preliminary injunction, Eoflow (294090 KS) shares were suspended as it is reviewing whether it is subject to a substantive review for KOSDAQ listing eligibility.  
• Medtronic Plc (MDT US) is in an unprecedented situation of potentially acquiring a company whose shares are suspended, has a preliminary injunction against it and exposure to possible liabilities. 
• Medtronic could have prevented this development by reaffirming its commitment to the deal. The transaction is on increasingly shaky grounds, which is reflected in the 38.2% gross spread. 

• On 10 October, the Korea Exchange announced a temporary suspension of trading of Eoflow (294090 KS) shares starting 11 October.
• Eoflow decided at its board of directors meeting the previous day (10th) to suspend production and sales of Eoflow patches until the outcome of the lawsuit is resolved. 
• In this insight, we provide various scenario analysis including the worst case, best case, and in-between cases of the Eoflow M&A tender offer process.

• The Estia Health (EHE AU) IE considers Bain’s A$3.20 (A$3.08 excluding paid dividends) offer fair and reasonable as it is above its valuation range of $2.83 to A$3.21 per share. 
• The offer is subject to FIRB and possibly aged care industry approvals. The MAC clause risk, particularly around material regulatory events, is diminishing.
• This is a done deal. At the last close price and for the 30 November payment, the gross and annualised spread is 1.3% and 9.7%, respectively.

• Singapore-based biotechnology startup Automera has secured US$16 million in a Series A round of investment co-led by early-stage life science accelerator and investment firm Accelerator Life Science Partners (ALSP) and Temasek-backed venture builder ClavystBio.
• EDBI, Xora Innovation, and other undisclosed investors also participated.
• Automera was established by Associate Professor Michael Lazarou, Loong Wang, and Taiyang Zhang at Talo Labs in collaboration with ALSP.

• With few women in managerial positions, the reality is that for the time being female directors are forced to appoint candidates from outside the company.
• Two companies is the limit for a monthly board meeting with agenda preliminarily reviewed; investors should oppose proposals to elect candidates who hold board positions at three or more companies.
• The main idea is to promote board diversity for making strategic decisions based on diverse values, but it has become a numbers matching exercise to achieve % of female board members.

• Universal Vision Biotechnology (3218 TT) reported continued growth in 1H23, with revenue, operating profit, and net profit increasing 25%, 31%, and 31%, YoY, respectively. 
• Revenue from high-margin technical service grew 23% YoY, driven by increasing number of refractive and cataract surgeries performed in Taiwan. UVB dominates refractive market in Taiwan, with 50% market share.
• With dominant market positioning in Taiwan, re-opening in China, secular market tailwinds, and widening geographic presence, UVB is expected to report double-digit top and bottom-line growth through 2025.

Oryzon presented a positive update on vafidemstat’s ongoing Phase IIb PORTICO trial in borderline personality disorder (BPD) at the ECNP Congress. The aggregated blinded safety data, as of 23 August, demonstrated a well-tolerated safety profile for a cohort with baseline characteristics reflecting real-world demographics of a typical BPD population. This is a critical consideration for therapies to progress and be successful once commercialised. We also note a low rate of discontinuations (2%) due to treatment-emergent adverse events (TEAEs) and zero discontinuations attributed to serious TEAEs. Screen failure and dropout rates, at 37% and 21%, respectively, were also favourable compared to other agents in development for BPD, such as brexpiprazole, which had higher rates (62% and 27%). As a reminder, the primary objective of the PORTICO trial is efficacy of vafidemstat, and we anticipate top-line data in Q124. Although the shared data was blinded, the overall results suggest a favourable safety profile for vafidemstat and we await next year’s efficacy readout as (if positive) it will be a key catalyst and potentially increase the probability of success for vafidemstat in BPD.

Newron has announced encouraging interim six-month data from its Phase II trial (study 014/015) of evenamide in 161 patients with treatment-resistant schizophrenia (TRS). The six-month interval data for treatment at all dose levels showed evenamide was well-tolerated and efficacious, with statistically significant responses (p-value <0.001) across the key efficacy measures (PANSS, CGI-S and LOF). The interim data also provide inputs for the potentially pivotal Phase III trial (study 003), which we expect to start in Q124. We note that one-year data was reported on the first 100 participants of study 014/015 in May 2023, and we now await the complete one-year data from the full 161-patient cohort, expected in Q124. If favourable, this could be a significant inflection point for the company.

• Cosmecca Korea (241710 KS) clocked revenue of KRW115.7B (up 15% YoY) and operating profit of KRW11.2B (up 265% YoY) in Q223. Operating profit margin expanded 670bps YoY to 9.7%.
• Cosmecca is a key beneficiary of the increasing global demand for the affordable indie cosmetics brands. These brands are now outpacing the overall beauty and personal care industry.
• Since reporting strong Q1 result in May, Cosmecca Korea shares are on fire. Cosmecca is expected to continue its growth momentum due to strong global demand for affordable cosmetics.

• Boston Scientific Corporation delivered a solid result and managed an all-around beat last quarter.
• In the second quarter, Boston Scientific witnessed a 12% growth in total company sales.
• In the peripheral intervention segment, sales surged by 13% organically, while cardiology delivered impressive organic sales growth of 13%.

Immix has announced encouraging updated clinical data for NXC-201, a B cell maturation antigen (BCMA) targeting CAR-T therapy, which is being developed by majority-owned subsidiary Nexcella, in both multiple myeloma (MM) and amyloid light chain amyloidosis (ALA). The updated data for MM patients indicate an overall response rate (ORR) of 95%, notably higher than comparable CAR-T trials for MM, and for ALA show a 100% ORR in heavily pre-treated patients. The therapy has the potential to be the first outpatient CAR-T therapy, which would address many of the current CAR-T challenges with cost and access. With its recent $9.6m raise, we estimate Immix has an operating cash runway into Q424, from Q224 previously. Adjusting for the pro-forma cash of $22.2m, our valuation for Immix increases to $90.7m or $4.2/share (from $81.1m or $5.0/share).

Pixium Vision announced that safeguard proceedings have been opened by the Commercial Court of Paris. Despite the company’s best efforts in seeking financing options to extend its funding runway, it has determined that it may not be able to satisfy its financial obligations after the end of November 2023 without the protection of such proceedings. Given its liquidity risk and the absence of new financing to date, Pixium requested that the Commercial Court of Paris open safeguard proceedings. As the Court has now appointed other parties (SCP Abitbol & Rousselet and Selarl FHB) as co-administrators with supervisory responsibility for Pixium, we estimate the likelihood of any material residual value remaining attributable to the common equity holders of Pixium Vision following the court proceedings as highly speculative. As such, we are withdrawing our estimates and forecasts.

• Hisamitsu Pharmaceutical Co (4530 JP) announced mixed Q2FY24 result, with single-digit revenue growth and bottom-line decline. Revenue grew 5% YoY to ¥34.9B, while operating profit declined 8% YoY to ¥4B.
• Salonpas line of OTC pain relieving patches have become major growth driver of the company. In Q2FY24, Salonpas revenue increased 14% YoY, lowest growth rate reported in last five quarters.
• Despite 70%+ progress of operating and net profits, Hisamitsu reiterated FY24 guidance. Declining margins, anticipated increase in SG&A expenses, and high base call for massive fall in profit in H2FY24.

• WuXi AppTec’s share price has performed well recently, mainly driven by CXO’s “immune attributes” to anti-corruption campaign, investors’ bullish view of weight loss drug business, and the previous oversold rebound.
• Peptide CDMO business would contribute limited incremental performance to WuXi AppTec considering overall large business volume.Downward trend of CRO business is hard to be hedged by weight loss drug business.
• Due to higher-for-longer rate, China CXOs only have rebound value, but no reversal logic. It’s time to consider taking profits in a timely manner before the share price falls again.

• The 1,350p offer for Ergomed Plc (ERGO LN) (28% premium, 18.9x EV/Fwd NTM EBITDA using IBES estimated) seems optically attractive considering share underperformance, and in line with closest peer Medpace at 19.06x.
• Nevertheless there’d be synergies available to a trade buyer and other than 18% from the Founder, there aren’t any other irrevocables, which indicates the offer price is far from knock-out.
• I set my TP at 1,350p. Spread turned negative last week, now 0.59%/1.71% (gross/annualised, assuming settlement by mid-February). I would be long considering there’s still time for a competing offer.

• The Kankeiren intends to prevent further increases in the ratio of independent directors because of the small number of candidates for outside directors.
• One reason why the substance of the Corporate Governance Code has not improved is that independent directors are a minority on the board.
• The company is also responsible for not developing female internal executive director candidates, relying on outside directors for female directors, and not appointing foreign talent to the board.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads – Haitong International Securities Group (665 HK), 111 Inc (YI US), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US), IMAX China Holding (1970 HK), BPLANT.
• Lowest spreads – Yaizu Suisankagaku Industry (2812 JP), Healius (HLS AU), T&K Toka Co Ltd (4636 JP), Pact Group Holdings (PGH AU), Seiko Pmc Corp (4963 JP).

• Weight loss drug business has indeed significantly alleviated concerns about overcapacity issue in those leading CDMOs, but they do not have such a strong driving force on CROs.
• The last straw that hits an industry is often not due to the disappearance of demographic dividends/declining demand/poor financial performance of companies, etc., but rather to policy-guided capital flows.
• 3D Medicines (1244 HK) can be said a typical negative example in biopharmaceutical industry, and it is easy to be “manipulated”. We recommend investors stay away from such high-risk company.

• I tally 47 – 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 deals were discussed on Smartkarma this week: Haitong International Securities Group (665 HK)‘s Scheme; and Aeon Co (8267 JP)‘s partial.  Arguably, Boustead Plantations (BPLANT MK)received another offer. 
• Key updates took place for: EOFlow (294090 KS), Newcrest Mining (NCM AU), JMDC (4483 JP), Boustead Plantations (BPLANT MK), Symbio Holdings (SYM AU), and T&K Toka Co Ltd (4636 JP).

• Japan has the largest number of TCFD endorsing institutions in the world, and the number of listed companies endorsing the TCFD has increased by 350 since last year.
• It’s hoped that more companies will follow the example of those that disclosed specific climate change impact estimates under certain conditions, and that other companies will attempt to do so.
• There are many companies that have endorsed TCFD, but have only endorsed it and not disclosed it, so the issue isn’t about endorsing TCFD, but about the content of disclosure.

• After Insulet Corp (PODD US) lodged a lawsuit against EOFlow (294090 KS), Flex, inter alia, on the 3rd August, the judge has thrice extended the temporary restraining order. 
• But the big (ger) news is that a preliminary injunction comes into force today. Shares are down 2.5% as I type.
• This latest development should have been expected. And put simply: a proposed preliminary injunction doesn’t prevent Medtronic Plc (MDT US) from acquiring EOFlow.

• Legend Biotech Corp (LEGN US) reported six-fold jump in revenue to $73M in 2Q20, driven by strong uptake of the sole commercialized drug, Carvykti, which generated worldwide revenue of $117M.
• Label expansion applications have been submitted to the FDA and EMA seeking approval of Carvykti for the earlier treatment of patients with relapsed or refractory multiple myeloma.
• Legend Biotech has 11 pipeline programs covering hematologic malignancies and solid tumors. Recent financing activities have fueled the company’s cash balance to $1.5B, which should provide cash runway through 2025.

• Teladoc managed to exceed analyst expectations in terms of revenue as well as earnings with a robust result, characterized by a 10% YoY growth in consolidated revenue and consolidated adjusted EBITDA exceeding expectations at $72 million.
• Notably, the Integrated Care and BetterHelp segments both performed exceptionally well, with the former seeing 5% YoY revenue growth driven by higher enrollment in the chronic care program.
• BetterHelp, the leading player in mental health services, reported an 18% YoY revenue growth in the second quarter, in line with expectations, emphasizing the sustained demand for mental health services.