Health Care Archives | Page 83 of 137 | Smartkarma

• Following the two tender offers, Han & Co now holds more than 90% of the common shares in Lutronic Corp (085370 KS) and is looking to buy the remaining shares.
• Lutronic Corp (085370 KS) is a member of the KOSDAQ 150 Index and delisting would mean an index replacement. Value Added Technologies (043150 KS) is a potential inclusion.
• Value Added Technologies (043150 KS) has underperformed its peers and trades cheaper on nearly all valuation parameters.

• Since mid-July, spreads have not followed a clear pattern across the European liquid universe of ordinary and preferred shares (9 have tightened, 9 widened, 1 at same level).
• Spreads could further widen in the short-term. Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, Schindler, SSAB Svenska Stal.
• Recommended trades long preferred / short ordinary shares: Carlsberg, Media-for-Europe, Sixt, VW, Grifols, Atlas Copco.

• Kaken Pharmaceutical (4521 JP) reported muted operating performance for Q1FY24. Revenue was flat compared to year-ago quarter, while operating profit declined 19% YoY. Net profit decreased 14% YoY.
• The company has reiterated FY24 guidance of flat revenue and 5% YoY decline in operating profit. However, net profit is expected to increase 23% YoY in FY24 on low base.
• Kaken is not expected to see any immediate respite as the contribution from the new products will not compensate for the revenue loss from its top selling products.

• AmerisourceBergen Corporation managed to surpass the revenue and earnings expectations of Wall Street in the last quarter.
• The company observed continued progress across its businesses in the quarter, producing significant revenue growth.
• We give AmerisourceBergen Corporation a ‘Hold’ rating with a revised target price.

• ImmuneOnco’s execution/R&D efficiency is far from satisfactory. After about seven years since the establishment in 2015, there are no candidates entering phase III trials or close to market launch.
• The biggest concerns are druggability and safety profile of CD47-targeted candidates. There could be potential R&D failure risks. The pipeline layout around CD47 also makes it hard to diversify risks.
• It’s challenging for ImmuneOnco Biopharmaceuticals (Shanghai) (IOB HK) to hit high-quality license-out deals with reputable big pharma, leading to uncertainties on internationalization. We’re conservative about the outlook. 

• The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final decision to be published on 5 October.
• The Court sanctioning could take place on 16 October. The scheme would become effective on 17 October. Assuming settlement by 31 October, spread is 0.99%/4.81% (gross/annualised).
• Assuming a break of 1,292p, the market is pricing a 97% probability of deal completion (vs. 6% by 15 June).

• In Q1FY24, Shionogi & Co (4507 JP) recorded 52% YoY revenue growth to ¥109B, reflecting a one-time payment received for the transfer of co-development and co-commercialization license for ADHD drugs.  
• Shionogi has reiterated FY24 guidance. The company expects FY24 revenue of ¥450B (up 6% YoY), operating profit of ¥150B (up 1% YoY), and net profit of ¥155B (down 16% YoY).
• Despite competition, Xocova captured a 60% market share of the treatment group patients in Japan. Over a six-month period since emergency approval, more than 70K patients have used Xocova.

Following the proposed acquisition of Access Managed Services in May 2023, Respiri announced that it has raised the A$3m as planned as part of the share purchase plan (SPP), which we believe are the funds needed to close the acquisition (10 August scheduled closing date). The company has raised a total of A$4.35m (including a convertible note with Obsidian Global) to cover the upfront payment (US$1.25m) for the acquisition, working capital to accelerate US commercialisation and the US$0.25m acquisition purchase consideration due three months post-close. Also, in Q423 (ending June 2023), Respiri signed three new remote patient monitoring (RPM) agreements, increasing the total contracted healthcare customers to 13 (across eight US states), while also bolstering its sales pipeline. The acquisition of the Access platform is a key component of management’s commercialization strategy and we anticipate Respiri to be on track to reach break-even in mid-CY24.

• AstraZeneca PLC managed to exceed analyst expectations in terms of revenue and earnings.
• The first half of the year saw a rise in total revenue.
• We give AstraZeneca PLC a ‘Hold’ rating with a revised target price.

Despite the active second quarter with developments across all operational fronts, OpGen’s cash concerns have increased the risk of the company as a going concern. With a cash balance of $3.2m at end Q223, OpGen has a cash runway into September 2023, meaning the need for immediate financing will be critical. Key quarterly highlights included the extension of the FIND R&D collaboration, a non-exclusive distribution agreement with Fisher Healthcare and new commercial contracts for both Unyvero and ARES services. While topline growth was a little subdued year-on-year due to one-off income in Q222, the operating loss for the period slightly improved to $5.2m (vs $5.3m in Q222), reflecting tighter cost controls and low clinical activity. If management is able to bridge the funding gap, its efforts in building the commercial groundwork could benefit the second half of the year across Unyvero, Acuitas and ARES. Due to the funding announcement, we have put our estimates and valuation on hold and will reassess as financing updates become available.

• Bristol-Myers Squibb’s results were a major disappointment as the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
• The second quarter’s total company sales were boosted by the sustained strength of its in-line and new product portfolio.
• Several of their major products throughout the portfolio, including Reblozyl, their cell treatments Breyanzi and Abecma, as well as Camzyos and Zeposia, were responsible for this impressive result.

• 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  Daiken Corp (7905 JP), 111 Inc (YI US), Eoflow (294090 KS), Kyoden Co Ltd (6881 JP), Orecorp Ltd (ORR AU), Symbio Holdings (SYM AU), ENM Holdings (128 HK).
• Lowest spreads – Healius (HLS AU), Toyo Construction (1890 JP), Yaizu Suisankagaku Industry (2812 JP), Allkem Ltd (AKE AU), Itochu Techno Solutions (4739 JP), Penguin International (PBS SP).       

• I tally 45 – 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 this week: Silvercorp Metals (SVM CN) scrip Offer for Orecorp Ltd (ORR AU); and Kyoden Co Ltd (6881 JP)‘s Tender Offer. 
• Key updates took place for Invocare Ltd (IVC AU), Estia Health (EHE AU), Toshiba Corp (6502 JP), Metro Pacific Investments Co (MPI PM), and Eoflow (294090 KS).

• Recent share-price declines in healthcare is mainly related to anti-corruption campaigns. Here’re some updates.We recommend investors not to rush to buy the dip, but wait for the bottom.
• We recommend A-share healthcare companies to buy back shares/increase dividends, in which case, despite slowing growth, A-shares are still the RMB-asset with the greatest potential for increases in expected returns.
• CanSino Biologics (6185 HK) has entered a Framework Agreement with AstraZeneca, but investors should not be overly optimistic about the short-term or even medium-term performance contribution brought by this cooperation.

• Rainbow Children’s Hospital (RAINBOW IN) recorded 21% YoY revenue growth in Q1FY24 to INR2.9B, driven by increase in pediatric surgical cases and deliveries, and addition of new bed capacities.
• Lower occupancies in new hospitals and higher expenses impacted profitability. In Q1FY24, EBITDA margin declined 407 bps YoY to 30.5%, while net profit margin contracted 190 bps YoY to 14.4%.
• The company will add 270 beds in the current financial year. By FY27, RCML aims to increase its bed capacity by 56% to 2,585 from current bed capacity of 1,655.  

After launching a Phase 2 investigation into the acquisition of EMIS by United Health in March, the Competition and Markets Authority (CMA) has provisionally cleared the takeover. A further public consultation period runs until 1 September and the CMA’s final report is due by 5 October.

Pixium Vision recently announced that it has received a €3m bridge financing loan from shareholders Sofinnova (€1m) and Bpifrance (€2m), which extend its cash runway through to the end of November. The loan will bear interest at 12% pa and mature on 31 July 2023. The loan is a positive step and signal of confidence from these two institutional investors as Pixium works towards securing broader additional financing to bring it past the conclusion of the PRIMAvera European pivotal study, for which results are still anticipated in or around year-end 2023. We maintain our pipeline rNPV valuation of €140.1m but our equity valuation per pre-consolidation basic share is €0.90 (vs €0.92 previously) after adjusting for estimated H123 net debt.

SIGA has reported Q223 results, which came in largely as expected, and management has provided key operational highlights. Activity in the second half of the year has started to firm up with upcoming TPOXX deliveries (for H223) and better-than-expected international orders (offsetting IV orders that will likely be received in FY24). We maintain our FY23 product revenue estimate of $155m and note H223 management sales guidance of $143–158m. We await further clarity on PEP immunogenicity trials, which we believe are the next material catalyst. As we incorporate the reported quarterly results and slight shift in revenue mix for the balance of the year, our valuation adjusts to $1.24bn or $17.46 per share (vs $1.25bn or $17.53 per share previously).

• In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the September 2023 Rebalance.
• I expect one change for ASX 100 and 3 ADDs and 4 DELs for ASX 200. There could be 11 ADDs and 9 DELs for ASX 300.
• ASX 300 member Leo Lithium (LLL AU) is currently suspended from trading and that could have interesting implications for the stock’s ASX 300 membership.

Actinogen recently provided a Q423 quarterly update summarising that its two development programmes for lead candidate Xanamem remain on track, with the Phase IIb XanaMIA study portion assessing the drug in lead indication Alzheimer’s disease (AD) still scheduled to start in H2 CY23, with results still expected in H2 CY25. For the company’s XanaCIDD study in patients with cognitive impairment (CI) associated with major depressive disorder (MDD), enrolment is approaching 25% and the company continues to expect results in H1 CY24 as it is opening new US-based study sites to compensate for regulatory delays in the UK. The company reported a 30 June cash position A$8.46m and has announced a A$10m rights offering allowing existing shareholders to purchase up to 400m shares at A$0.025 per share. After rolling forward our estimates, our pre-financing valuation adjusts slightly to A$645m, or A$0.36/share, versus A$640m (A$0.35/share) previously. Overall, we view the financing as a positive and necessary step to continue Xanamem development.

• Centene Corporation managed to exceed analyst expectations in terms of revenue as well as earnings.
• For the quarter, they increased their expectation for 2023 premium and service revenue by an additional $1.8 billion.
• The commercial HBR met the company’s expectations, considering the quarter’s 200,000 new members and the marketplace’s ongoing robust growth.

• From the outset, EOFlow (294090 KS) has traded wide (~7% of average) to Medtronic Plc (MDT US)‘s Offer. An apparent delay in filing with Korean regulators formed one argument. 
• Now there’s a compelling reason. Key insulin pump competitor Insulet  (PODD US) has filed a lawsuit accusing EOFlow of the misappropriation of trade secrets, patent infringement, and trademark dilution.
• Singapore-Based Flex (FLEX US) and three ex-employees of Insulet are also defendants. This does not bode well for the transaction. 

• This signifies the official commencement of a lawsuit against Eoflow in the United States, which has been considered one of the most significant risks for Eoflow.
• Eoflow is externally saying that the aspect of patents claimed by Insulet is actually based on previously expired patents. Hence, Eoflow believes they can win this patent lawsuit.
• This lawsuit emerged before the acquisition decision by Medtronic suggesting a need to consider trading the current spread based on the inference that the tender offer is still valid.

• Insulet Corp (PODD US)’s lawsuit against Eoflow (294090 KS) caused a sharp decline in Eoflow’s share price today (down 10.7% to 24,950 won).
• Insulet is accusing Eoflow of hiring several senior personnel that have helped Eoflow to develop a product that could take away market share from Insulet. 
• The most important factor may be Eoflow’s “special sauce” which is some kind of technology/mechanism that allows this 17% greater efficiency/convenience for the wearable EOPatch insulin device.

• DexCom delivered an all-around beat in the previous quarter.
• The company generated another fantastic quarter, with organic revenue growing by 26% in the second quarter compared to the second quarter of 2022.
• As the availability of their products expands more quickly than at any other point in the company’s history, demand for DexCom CGM keeps rising.

• Based on endogenous development and external M&A, the outlook of Hygeia is full of imagination. Hygeia also start to expand business in northwest region of China by acquiring Chang’an Hospital.
• If public hospitals have a role in “guiding patients” to Hygeia, anti-corruption campaign would affect Hygeia’s future performance, which is a significant uncertainty that could also shake its investment logic.
• There may be short-term chaos. It remains to be seen whether performance can sustain growth of around 30%. The 23H2 revenue growth would be an important guidance for Hygeia’s outlook.

• Insulet Corp (PODD US) filed with the United States District Court a complaint for patent infringement against Eoflow (294090 KS), Flex (FLEX US), Luis Malave, Steven DiIanni, and Ian Welsford.
• Insulet’s primary allegation is that Eoflow’s EOPatch device is built using Insulet’s proprietary trade secrets and infringes three Insulet US patents (‘741, ’883 and ‘950 patents).
• The most likely scenarios are that Medtronic Plc (MDT US) and Insulet sign a licensing agreement (resulting in a possible tender offer price cut) or Medtronic walks. 

• HealthyWay cannot rely on drug/product sales to achieve rapid expansion of revenue scale because it hasn’t huge user base accumulated on e-commerce platforms like Taobao/JD.com, leading to different business model.
• Relying on Baidu’s search engine to guide traffic could be worthless, because B-end users would not pay for the traffic that cannot provide added value.HealthyWay hasn’t a strong cornerstone business. 
• HealthyWay’s valuation should be lower than that of ClouDr. Due to the lack of imagination space in business model, it would to some extent suppress the valuation growth of HealthyWay.

• From a niche player to a global high-flyer – Shofu is a domestic market leader in developing and manufacturing dental materials and equipment.

• With its proprietary technology and expertise, it is aiming to become a global top 10 player with a strategic focus on overseas expansion.

• With an addressable market estimated to become up to 20 times larger than Japan, growth prospects are high and the company is gaining solid traction with FY3/2023 results set to reach record highs.

• After its initial bid of $3.00/share was rejected by Estia Health (EHE AU), Bain returned on the 7 June with a $3.20/share non-binding proposal and was granted exclusive due diligence.
• Estia and Bain Capital have now entered into a Scheme Implementation Agreement at A$3.20/share, a 50% premium to undisturbed. 
• A shareholder meeting is expected to be held in November with implementation expected prior to the end of 2023. 

• Estia Health (EHE AU) has entered a SID with Bain Capital at A$3.20 per share, a 49.5% premium to the undisturbed price (21 March).
• The offer is attractive in comparison to historical share prices and multiples. The offer is also attractive in comparison to the Japara Healthcare (JHC AU) precedent transaction. 
• The MAC clause, particularly around material regulatory events, could be risky. At the last close and for an end-of-December payment, the gross and annualised spread is 3.7% and 9.5%, respectively.

• Sun Pharmaceutical Industries (SUNP IN) reported 11% YoY revenue growth to INR118B in Q1FY24, mainly driven by the U.S. business. EBITDA margin expanded 109bps to 27.9%.
• Net profit declined 2% YoY to INR20B due to certain one-off charges amounting to INR3B. Excluding the exceptional items, adjusted net profit grew 14% YoY to INR23B.
• With 26 marketed products globally, Sun Pharma is betting big on specialty products. Specialty pipeline includes 5 molecules undergoing clinical trials. Specialty R&D accounts for 35% of total R&D spends.

• BeiGene maintained strong product sales in 23H1 and its net loss continued to narrow. This means that BeiGene has realized the cost control problem and entered a healthy growth phase.
• Our revenue forecast indicates BeiGene is approaching the minimum threshold for turning losses into profits. A more likely scenario is revenue need to reach over US$4 billion to be breakeven
• However, regardless of the calculation, BeiGene ‘s valuation is still unreasonably high. Its potential/certainty is nowhere near that of Alnylam. Maintaining sustained high growth is not easy because “accidents” remain.

• Laboratory Corporation of America delivered a disappointing set of results as the company was unable to meet the revenue expectations as well as the earnings expectations of Wall Street.
• Base business revenue and base business revenue of Diagnostic Laboratories grew driven by strong base business volume and Ascension.
• Labcorp, a segment of the company’s laboratory services business, delivered exceptional growth in its Diagnostic Laboratories and generated strong progress in Central Laboratories.

• Astellas Pharma (4503 JP) reported Q1FY24 results, with revenue beating and operating and net profit missing consensus. Revenue declined 2%, while operating and net profit increased 17% and 13%, respectively.
• Astellas has reiterated FY24 revenue guidance of ¥1,520B, while reduced operating profit guidance by ¥29B to ¥259B (+95% YoY) and net profit guidance by ¥23B to ¥204B (+106% YoY).
• On August 4, Iveric Bio has received FDA approval for Izervay for the treatment of geographic atrophy secondary to age-related macular degeneration, which impacts approximately 1.5M people in the U.S.  

• HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued. 
• Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.
• Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.