Health Care Archives | Page 78 of 137 | Smartkarma

• When this was launched, it traded more a fair bit on the first day, but then more volume traded than I expected. This could mean a couple of things.
• Re-Reading the original doc leaves nuances. The change in management responsibilities this past summer make some holders less certain. It’s complicated. 
• There have been several blocks traded, and a large short instantiated. And if one has a more conservative estimate at a higher top-end participation, the back end gets uglier.

• Concord Healthcare Group (CHG HK)’s hospital business is not strong enough to contribute strong performance consistently, leading to unsatisfactory profit margin considering its weak hospital operation and management capability.
• The network business could face some legal risks based on our analysis. In the context of anti-corruption campaign in China healthcare, Concord’s business and patients flow could be affected.
• Together with potential policy risks such as DRGs/centralized procurement, we tend to be conservative about Concord’s outlook. In terms of valuation, Concord’s valuation should be lower than Inkon Life Technology.

• Hugel Inc (145020 KS) reported 28% YoY growth in both revenue and operating profit to KRW81.6B and KRW28B in 2Q23, respectively, driven by solid performance of botulinum toxins and fillers.
• Hugel has resubmitted marketing application for botulinum toxin in the U.S. for the third time, with approval expected in 1Q24. The U.S. is the world’s single largest botulinum toxin market.
• The company is seeing North America, Australia, New Zealand, and China as future growth engines to achieve its long-term target revenue of KRW1 trillion and operating profit margin of 45%.

Oryzon has announced that it has received two separate grants from the Spanish State Research Agency and the Ministry of Science and Innovation to conduct two different public-private collaboration projects. These two-year studies – the DICTIONIS Project (€0.95m budgeted cost) and the MODERN Project (€1.33m budgeted cost) – aim to discover and validate novel biomarkers and epigenetic targets for the treatment of neuronal pathologies. The grants give us confidence in management’s ongoing efforts and they complement its clinical activities for vafidemstat, its lead CNS asset, which is currently involved in two Phase II clinical trials: PORTICO (for borderline personality disorder) and EVOLUTION (for schizophrenia). Further, the grants have the potential to expand the company’s CNS portfolio, in our view.

• Overseas investors feel that the disclosure of English documents by Japanese companies is slow-paced and the majority of overseas investors are not satisfied with the English disclosure.
• Without sufficient disclosures in English, it is impossible to conduct a detailed analysis of the portfolio company. This also casts a shadow over engagement.
• Given the narrowing coverage of sell-side analysts, companies should proactively disclose English-language materials at the earliest possible time. For long-term investors, English-language disclosures such as annual securities reports are also useful.

• With 1H23 revenue of KRW704 billion, Hanmi Pharm (128940 KS) is on track on surpass its 2022 revenue of KRW1.33 trillion to reach a new high in 2023.
• Hanmi is developing epeglenatide as personalized obesity drug for South Korean market. With the spectacular success of obesity drugs in the U.S., epeglenatide seems to be have great market potential.
• Outlicensing partner Merck is conducting phase 2b trial on efinopegdutide for NASH, with result expected in 2025. Efinopegdutide obtained fast track designation from FDA, which should accelerate its commercialization.

• Malo’s revenue had good growth, but revenue scale is still small. At the current gross margin level, it would be difficult to generate decent profits considering the large SG&A expenses.
• Dental care expansion is difficult. Malo would face the challenging such as lack of high-quality dentists and centralized procurement. Both would drag down profits and cash flow.
• We are not optimistic about Malo’s share price performance after IPO. This industry’s profit mode is not mature. Most of chain dental services providers are still in cash-burning expansion stage.

• Hologic, Inc. exceeded analyst expectations in terms of revenue as well as earnings.
• Non-GAAP earnings per share were $0.93 and the total revenue was $984 million.
• In Mammography, Hologic delivered more gantries in Q3 than in Q1 and significantly fewer than in Q2.

Basilea has announced that the US FDA has accepted its New Drug Application (NDA) for ceftobiprole. The FDA has set a Prescription Drug User Fee Act (PDUFA) goal date of 3 April 2024, meaning that Basilea will have a regulatory decision for its lead antibiotic asset in the US in early-Q224, consistent with prior guidance. Supported by three separate Phase III clinical trials, the company is seeking approval for three indications: Staphylococcus aureus bacteraemia (SAB), acute bacterial skin and skin structure infections (ABSSSI) and community-acquired bacterial pneumonia (CABP). With the bacterial infection market in the US representing a sizeable opportunity, we believe the decision from the FDA could represent a significant catalyst for Basilea.

OSE Immunotherapeutics (OSE) has announced its H123 results, providing an operational and a financial update. Highlights from the period included positive recommendations for a confirmatory pivotal Phase III trial for lead asset Tedopi in non-small cell lung cancer (NSCLC), which is on track to commence in 2024. OSE also claimed full rights to its most advanced immuno-inflammation asset, Lusvertikimab (previously being developed in partnership with Servier). Post period, the company reported a positive safety review for Lusvertikimab from the ongoing Phase II trial in ulcerative colitis (UC). Patient enrolment is expected to be completed in Q423, with top-line results in the next few months. OSE also recently announced a €200,000 grant from the French government and Region Pays de la Loire to weave RNA therapeutics into its preclinical R&D engine, representing a new opportunity for the company. At end-June 2023, OSE had a pro-forma gross cash position of €33.6m, which we estimate will provide a runway through to Q424 (H123 cash burn of €11.7m). We value OSE at €311.3m or €14.4 per share, with Tedopi as the primary contributor to this valuation.

• Regeneron delivered an all-around beat in the previous quarter, demonstrating progress toward their long-term objective of business growth and revenue diversification.
• Total revenues saw an 11% increase compared to the previous year’s quarter, primarily driven by collaboration revenues with Sanofi and net product sales of Libtayo, which exhibited impressive growth of 39% and 49%, respectively.
• Notably, non-EYLEA revenue contributions accounted for 41% of total revenues, marking a significant proportion, the highest in the last decade, excluding contributions from COVID-19 antibodies.

• This is a special one-time report on Cue Health, a company once lauded for its promise in the diagnostics sector.
• Amidst diminishing fortunes, the company is under the scrutiny of significant shareholder, Tarsadia Investments.
• This report aims to dissect the various valuation scenarios underpinning Cue Health, providing a lucid understanding of its investment potential amidst the unfolding drama.

• Yichang HEC Changjiang Pharma (1558 HK) reported a whopping 148% YoY growth in revenue to RMB3,209M in 1H23. Net profit rebounded to RMB3,209M from a loss of RMB33M in 1H22.
• In H1 2023, revenue from Kewei, approved for first-line treatment of influenza, jumped 186% YoY to RMB2,881M, representing ~90% of total revenue, mainly due to spiking flu cases in China.
• Recently, the company obtained approval for premixed Protamine human insulin injection and submitted marketing application for its self-developed product, Yiqibuvir for the treatment of chronic Hepatitis C in China.

• Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. 
• This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year’s financial results.
• We analyzed the performance of Livzon Pharmaceutical Group In (000513 CH),BGI Genomics (300676 CH) and Jinxin Fertility Group (1951 HK) based on their 23H1 reports, and adjusted our forecast accordingly.

Basilea has announced that the results from its Phase III trial (ERADICATE) for ceftobiprole have been published the New England Journal of Medicine, a high-impact peer-reviewed medical journal. While these trial results were first shared in July 2022, we believe that the publication highlights positive data from the study as management awaits a regulatory decision on US approval. Basilea filed its new drug application (NDA) with the FDA for ceftobiprole in August 2023, and the ERADICATE study evaluated its application for Staphylococcus aureus bacteraemia (SAB), one of the three indications Basilea is seeking approval for. Management expects a decision from the FDA by Q224, potentially representing a significant catalyst for the company.

• Shineway’s 23H1 performance exceeded expectations. High growth of injection products/TCM formula granules was commendable.But as pandemic is under control, sales of Shineway’s respiratory system prescription medications would decrease in 23H2.
• The national VBP of TCM formula granules and the anti-corruption campaign in 23H2 could be the short-term headwinds to Shineway’s performance, which could lead to lower-than-expected 23H2 performance growth. 
• China’s favorable policies will provide strong support for the development of TCM industry. Shineway’s TCM formula granules business would have outstanding future growth. So, we’re optimistic about Shineway’s long-term outlook.  

• The problem of agenda setting in engagement with investment firms is due to the mismatch that is occurring in each of the listed companies and investors.
• Meetings without top management present disappoint investors who have prepared thorough analyses of the issues facing the portfolio company. Top management should also avoid listening to template questions at meetings.
• It’s unrealistic to ask passive funds that cannot devote resources not to ask template questions. Active funds of Japanese investment managers may have too many portfolio companies to engage adequately.

• Daiichi Sankyo (4568 JP) reported a 25% YoY revenue growth in Q1FY24, mainly driven by oncology drug Enhertu. The company reiterated FY24 guidance, with revenue and operating profit growing double-digit.
• Daiichi Sankyo’s drug candidate datopotamab deruxtecan demonstrated statistically significant and clinically meaningful progression-free survival benefit in certain types of breast cancer patients in pivotal phase 3 trial.
• Enhertu is well-positioned for geography and indication expansion as well as market share gain. Strengthening oncology portfolio and rich late-stage pipeline entail significant growth opportunity for the company.

• Sonoscape maintained strong growth momentum in 23H1. Profit margin further improved. The Company has entered a stage where scale effect has emerged. However, declining contract liability balance raised our concern.
• Japanese companies setting up factories in China would shake competitive landscape of the domestic market. The anti-corruption campaign could lead to “unexpected impact” on performance in 23H2. 
• We lowered 2023 revenue forecast to RMB2 billion. After negative factors are fully priced in, share price would rebound. 

• For the month of September 2023, 8 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$2bn.
• The average premium for the new deals announced (or first discussed) in September was 37%. The average YTD is 35%.
• This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

• Prodia is the leading diagnostics company in Indonesia, with over 40% market share as the most trusted brand in the country, given accreditation from the College of American Physicians.
• The company was a huge beneficiary of all the testing over COVID with the result of a post-pandemic correction but sales should see a strong 2H2023 with more like-for-like comparisons.
• Prodia (PRDA IJ) remains one of our top healthcare picks in Indonesia, with rising health consciousness driving higher demand for testing. Valuations are extremely attractive versus Indian peers. 

• We have discovered something interesting from the innovative drug evaluations disclosed by the NMPA over the years. It’s recommended to establish rational expectations for the investment return of biopharmaceutical industry.
• We analyzed the different situations faced by Biotech in IPO/M&A process, so as to help investors make rational judgments. R&D team is likely to be cut regardless of the circumstances.
• We updated views on Huadong. Its old businesses dragged down valuation. It may need to wait until Huadong delivers better-than-expected sales/profit growth in weight-loss management business before further boosting valuation.

The Competition and Markets Authority (CMA) has given final approval to the takeover of EMIS by UnitedHealth. Subject to the scheme receiving the approval of the court at the sanction hearing on 25 October, the takeover is expected to complete on 27 October. On 23 October EMIS will pay the recently proposed interim dividend to shareholders on the register on 6 October without reducing the acquisition cash consideration.

• EC Healthcare (2138 HK) reported record high revenue of HK$3.9B in FY23 and started FY24 on a strong note, with Q1FY24 revenue increasing 23% YoY, driven by medical services segment.
• Cost pressure is negatively impacting the bottom line. The company is reporting decelerating EBITDA and net profit margins since FY20. ROE deteriorated to 4.5% in FY23 from 33% in FY19.
• The company is well-positioned to see turnaround in profitability with the resumption of Mainland China visitors in Hong Kong providing impetus to high margin earning aesthetic business and cost optimization.

• The Cigna Group exceeded analyst expectations in revenue and earnings, fueled by ongoing growth across its varied portfolio of companies.
• Cigna produced total revenues of $48.6 billion, adjusted earnings per share of $6.13, and cash flow from operations of $2.5 billion in the quarter.
• Another strong quarter was experienced by the company’s market-leading pharmacy, care, and benefits portfolio at Evernorth Health Services.

Shield Therapeutics’ H123 results were largely as expected. Despite the minor operational adjustments with the commercialisation ramp-up, our long-term expectations remain unchanged. H123 revenue of $4.3m grew 65.8% y o y and was largely driven by US Accrufer sales. Total prescriptions grew 59% (vs H222) to 26,200 and are anticipated to accelerate in H223 with the completed build out of its sales platform. For the medium term, we anticipate additional launches in the EU and regulatory approvals in China and our longer-term assumptions remain unchanged. Our valuation remains largely unchanged at £390.4m (£388.9m previously), reflecting updates to net cash (including the recent $6.1m equity raise) and our near-term estimate adjustments for volume and operating expenses in line with latest management guidance.

• Kalbe Farma (KLBF IJ) is one of the key proxies for increasing healthcare penetration and health consciousness in Indonesia through prescription drugs, consumer health, and nutritional products.
• The company saw a solid sales performance in 1H2023 driven by prescription drugs. There was some lingering margin pressure from higher materials but this should abate in 2H2023.
• Kalbe Farma continues to develop its digital capabilities, as well as export markets helping to drive efficiencies and growth. Valuations remain below the historical average despite strong earnings recovery ahead.

• Fresenius Medical Care & (FME GR) reported accelerated organic revenue growth of 6% YoY in 2Q23, driven by both operating segments including sequentially stable treatment volumes in the U.S.
• Execution on turnaround plan translates into visible productivity improvements in care delivery segment achieving a Q2 margin at the lower end of the 2025 target margin band of 10–14%.
• The company now expects 2023 operating income to remain flat or decline by up to a low-single-digit percentage (previous target: remain flat or decline by up to a high-single-digit percentage).

• DaVita Inc. exceeded analyst expectations in revenue and earnings, with $432 million in adjusted operating revenue and $2.08 in adjusted profits per share.
• These outcomes were driven by advancements in their financial trinity of treatment volume, revenue per treatment, and patient care expenses.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Henry Schein delivered a mixed set of results in the recent quarter with revenues falling short of Wall Street expectations but above-par earnings.
• Strong equipment sales and steady general merchandise sales, along with continued strength in technology and value-added services, implants, biomaterials, and endodontic products, have contributed to this performance.
• The technology and value-added services business, including Henry Schein One, is experiencing global growth, driven by cloud-based practice management software and revenue cycle management services.

• Royalty Pharma plc delivered a strong result and managed an all-around beat last quarter.
• As a result, the company delivered adjusted EBITDA growth of 4% for the quarter, substantially in line with the team’s top-line growth.
• The company’s total royalty receipts increased by 1%.

• Mitra Keluarga (MIKA IJ) is in the midst of a recovery not yet reflected in headline numbers as the effects of inflated COVID revenues fade and core business takes off.
• The company is a key beneficiary of the new health bill allowing foreign doctors to practice in Indonesia given its best-in-class hospitals located in affluent catchment areas.  
• Mitra Keluarga Karyasehat continues to expand its hospital network, increase treatment intensity, and digitalise its operations. Valuations are attractive given the highest returns amongst its peers, with recovery in motion.

• Axonics (AXNX US) believes that the U.S. sacral neuromodulation market is now worth of ~$800M, which is poised to double over the next five years to $1.6B.
• The company has been reporting superior revenue growth since 2020. Axonics raised 2023 revenue guidance to $358M, up 32% YoY. The company has become adjusted EBITDA positive in 2022.
• With superior product portfolio in terms of patient satisfaction, longer product life, and smaller size, Axonics is the stronger player in the U.S. duopoly sacral neuromodulation market.

• Increase in the number of non-regular workers is a factor in gender wage disparity and has also put pressure on profit margin since labor was invested in low value-added jobs.
• In Japan, childcare is assumed to be dependent on the efforts of the family, and there is little thought of society solving childcare issues, and government policies reflect this idea.
• Problems also exist on the part of employers, with low rates of men taking childcare leave, and the top reason being an atmosphere that makes it difficult take childcare leave.

• Cardinal Health Inc. delivered a positive result and managed an all-around beat last quarter.
• The Pharma segment demonstrated remarkable profit growth of 13%, and the company generated significant adjusted free cash flow amounting to $2.8 billion.
• Cardinal Health pursued determined actions to advance its strategic imperatives, streamlining its operations, optimizing its organizational structure, and instituting fundamental leadership changes.

• MedSci’s all three businesses are targeting B-end customers (pharmaceutical and medical device companies) to generate revenue. In the context of VBP and anti-corruption campaign, B-end customers do have relevant needs.
• However, the binding between MedSci and hospitals isn’t deep, which would lead to MedSci being unable to grasp core medical resources, with weak bargaining power in front of B-end customers.
• Since the initiative is in the hands of the other parties not in MedSci, MedSci’s revenue growth/scale could be much lower-than-expected. This would suppress valuation and stock price performance.

• Zoetis Inc. managed to surpass the revenue and earnings expectations of Wall Street.
• Based on the wide portfolio across markets and species, Zoetis delivered solid second-quarter results of 9% operational growth in revenue and 12% in adjusted net income.
• The company reverted to more balanced sector growth this quarter, with 11% operational growth worldwide and 7% in the United States.

• Entero Healthcare Solutions Limited (2294842D IN)  is looking to raise US$200m in its upcoming India IPO. The bookrunners on the deal are ICICI Securities, DAM Capital, Jefferies, JM Financial, SBI Capital.
• Entero Healthcare Solutions (Entero) is a healthcare products distributor in India.
• As per the CRISIL report in the DRHP, Entero is amongst the top three healthcare products distributors in India in terms of FY22 revenue.

• As Celltrion (068270 KP) approaches merger clarity, focus will shift to its base business, which remains solid. In Q2 2023, biosimilar, the flagship business, reported a 10% YoY growth.
• Operating profit margin expanded 440bps YoY to 34.9%. Margins are expected to improve further through increasing contribution from high-margin products such as Yuflyma (Humira biosimilar) and Remsima SC.
• Celltrion expects to receive approval for Remsima SC in the U.S. by end of October, which should act as a major catalyst. By 2030, merged entity targets revenue of KRW12T.

• The reason why there are many doubts about Sipai is that its Specialty Pharmacy Business accounts for dominant proportion of total revenue but is almost difficult to make a profit.
• Sipai’s SMO business revenue will be difficult to grow at scale due to industry characteristics and the Health Insurance Services business is too small to bring substantial changes to performance.
• Sipai’s revenue structure/business model is difficult to improve in the short term. So it’s not surprising if Sipai suffers long-term losses. Its valuation should be lower than that of ClouDr.

• The question is whether companies can achieve results by increasing investment to secure and train human resources who can contribute to transitioning to a business that produces high value-added products.
• Regarding the disclosure of human capital, many issues remain, such as the lack of unified definition of the required items and the inability to use this data as comparable data.
• Percentage of women in managerial positions is more serious. The lack of on-the-job training for women is an on-going issue that makes the path to future managerial positions more difficult.

• UMP Healthcare (722 HK) reported FY23 profits down 26% YoY at 55 mn HKD, impacted by preoperating expenses and an impairment cumulatively of 40 mn HKD. 
• A slow Q4 FY23 didn’t help either; revenues came in flat HoH instead of up 10% as our expectations and costs increased resulting in margin compression. 
• We believe the worst is behind us. The stock trades at 5.9x FY24 PE, with ~50% of the market cap in cash and an FY24 dividend yield of 8.5%.

• Ajanta Pharma (AJP IN) reported better-than-expected profitability in Q1FY24, due to softening of raw material prices and normalization of freight rates. EBITDA margin expanded 300bps YoY to 26%.
• Revenue increased 7% YoY to INR10B, driven by superior execution in branded generics business and lesser price erosion in the U.S. 73% of the total sales came from branded generic.
• Management maintained mid-teen revenue growth and EBITDA margin guidance of ~25% for FY24. Ajanta Pharma has a positive business outlook due to growing branded generic business and niche U.S. launches.

• Yuanxin’s financial performance has not improved and it is still in a state of continuous loss. At such low gross margin level, Yuanxin will find it difficult to make money.
• As China’s retail pharmacy market has entered a new era of integration as the industry growth is slowing down, the challenges Yuanxin has to face would be different from before.
• When the market pattern has been basically determined, Yuanxin has little chance to break through. Being acquired may be a better outcome. If IPO, valuation would be lower than peers.

• Viatris Inc. delivered mixed results for the previous quarter, with revenues above the analyst consensus.
• The company exceeded its expectations in the quarter, delivering total revenues of $3.9 billion, or about 2% year-over-year growth on an operational adjusted basis, as well as adjusted EBITDA of $1.3 billion and free cash flow of $447 million.
• Tyrvaya’s bridge program was improved during the quarter to boost value per script and produce the greatest quarterly TRx launch.