Health Care Archives | Page 88 of 137 | Smartkarma

• 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 – 111 Inc (YI US), Silk Laser Australia (SLA AU), United Malt Group Ltd (UMG AU), ENM Holdings (128 HK), Chindata Group (CD US), Estia Health (EHE AU).
• Lowest spreads – Healius (HLS AU), Musgrave Minerals (MGV AU), Liontown Resources (LTR AU), Toyo Construction (1890 JP), Mincor Resources NL (MCR AU), Lian Beng (LBG SP).

• Nearly a third of the way through the review period, we see 12 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX EQUITY) at the December rebalance.
• There could be one change to the index in July/August following Nice Information Service Co (030190 KS)‘s transfer from the KOSDAQ Market to the KOSPI Market.
• The potential adds have outperformed the potential deletes over the last few months and there could be further outperformance as we go through the review period.

• Eisai Co Ltd (4523 JP) is expected to receive full approval from the FDA for Alzheimer’s disease drug, Leqembi, as FDA advisory committee voted unanimously in support of the drug.  
• Leqembi application has been granted Priority Review, with PDUFA action date of July 6. Once the FDA grants traditional approval, broader Medicare coverage for Leqembi would begin the same day.
• Leqembi is expected to receive approval in Japan, EU, and China in FY24. With these approvals, Leqembi is expected to become the top selling Alzheimer’s disease drug globally.

• Due to COVID-19, the consumption pattern of customers has changed.The rapid development period of pharmacies is coming to an end and the industry has entered a new era of integration.
• The essence of Deshengtang’s business model is more like traditional retail offline pharmacies, relying heavily on selling drugs. The Company’s healthy gross margin gives hope for an early turnaround. 
• However, no matter from which field to seek expansion, Deshengtang would encounter strong competitors.It remains to see if Deshengtang can survive in the industry rather than be acquired by competitors.

• The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.
• CDE will move closer to the FDA’s standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.
• We analyzed some key points about Hua Medicine Ltd (2552 HK). We think its core drug Dorzagliatin still has many uncertainties that are worth investors’ attention.

• Thonburi Healthcare Group (THG TB) recorded 23% YoY increase in non-COVID medical services revenue in 1Q23, mainly driven by higher pay per bed and utilization of inpatient division.
• With the recovery in core healthcare services, THG expects its revenue to grow 10% YoY this year, accelerating from 6% revenue growth recorded in 2022.
• In the next 3 years, THG plans to increase 195 outpatient rooms and 419 beds and is set to spend nearly THB5 billion on capex during 2023–2025.

• According to Invest Chosun, Celltrion plans to submit a merger registration statement to the KRX in July, with Mirae Asset Securities acting as the lead underwriter.
• Given that the approximate timing of the merger registration statement submission has already been exposed to the market, we can track the difference between the spot and exercise prices.
• Celltrion Inc will likely attempt to minimize the appraisal rights price. We can consider capitalizing on this possibility by shorting Celltrion Inc while going long on the other two companies.

• The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
• There is one change currently for each of the Secondary Battery, Bio, Internet and Game indices. Plus there are a couple of changes for the BBIG indices.
• SK Biopharmaceuticals Co Ltd (326030 KS) has overtaken SK Bioscience (302440 KS) on average market cap and there will be large flows on both stocks at the rebalance.

• The S&P 500 is 1% above the 4300-4325 area which we anticipated would cap upside for 2023.
• Our view since our 5/30/23 ETF Pathfinder is that we cannot be bearish if the SPX is above 4050, and we subsequently moved that line-in-the-sand up to 4165-4200 on 6/6/23.
• We are moving that threshold up to 4300, which is short-term support to watch; a break below it could bring selling pressure.

• The pricing of core product Envafolimab doesn’t have an advantage over competitors. Its market opportunities and profit margins are very limited if seen from both production side and sales side.
• 3DMed clearly faces financial pressure, and may not smoothly promote other pipelines. Under current market environment, it’s almost impossible to achieve substantial refinancing. The survival of 3DMed cannot be guaranteed.
• The fundamentals of 3DMed are not strong enough to justify high valuation. Current share price is clearly overvalued.Eventually the market will return to rationality. We recommend investors offload in time.

• Polaris Group (6550 TT) is in a process to file first BLA to the FDA for its lead drug candidate ADI-PEG 20 as a potential treatment of malignant pleural Mesothelioma.
• Although Polaris announced positive top-line result from Phase 2/3 study of ADI-PEG 20, overall survival was shorter than existing FDA-approved treatment, causing a massive sell-off in Polaris shares.
• However, the results are not fully comparable due to the different mechanism of action of the drugs under trial. Future growth prospect is not reflected in current share price performance.

• Just over a quarter of the way through the review period, we see six changes for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the December rebalance.
• There are a few stocks that are close adds at the current time and a move higher can take them into inclusion zone leading to more deletions.
• While there is little to no short interest on the potential inclusions, short interest on the potential deletions ranges from 4.3-12.2 days of ADV and 0.5-3.5% of free float.

• A major reason for investors’ disappointment is that the number of new projects in 23H1 were significantly lower-than-expected. The impact of slowdown in financing activity began to show in 23H1.
• Higher revenue growth of non-COVID projects is needed to achieve the performance guidance target.If the management fail to fulfill the commitment to accelerate business recovery in 23H2,they may lose creditability.
• It’s unlikely to receive AD drugs orders this year. The market would react directly to short-term sentiment. Without big catalysts, it’s difficult for WuXi Bio’s stock price to perform well.

• We held a conference call with the Chief Investment Officer of UMP Healthcare (722 HK), Patrick Cheung, on the 19th of June, 2023. 
• The company continues to forge strategic alliances and collaborations, the latest being Hong Kong Adventist Hospital, in addition to the recent partnerships with Pedder Health/Human Health Holdings (1410 HK).
• The stock represents an excellent opportunity when trading at 6.6x PE FY23E with 44% of the market capitalization in cash and a 7.7% dividend yield on our numbers (50% payout).

• Cooper delivered a solid result and managed an all-around beat in the last quarter.
• CooperSurgical also reported high revenues and achieved ten consecutive quarters of double-digit organic revenue growth, led by their fertility business.
• In addition to the strong financial performance, CooperVision’s new product launches, expanded product ranges, and market-leading flexibility contributed to the positive results.

• Numinus extends collaboration with MAPS. Last week, Numinus announced a partnership with the Multidisciplinary Association for Psychedelic Studies (MAPS) to support psychedelic experiential opportunities for practitioners as part of a clinical study, with permission to use MAPS’ protocol for the study.
• Numinus has submitted a clinical trial application (CTA) to Health Canada, which, if approved, will make the MDMA-AT experiential opportunity for practitioners available only through Numinus.
• This partnership is not the first collaboration between Numinus and MAPS and highlights the strong relationship and trust between the two.

• HUTCHMED developed Fruquintinib has demonstrated positive results in a Phase III FRESCO-2 study which reduced the risk of death by 34% in patients with previously treated metastatic colorectal cancer.
• In addition, Fruquintinib also has been validated and accepted for regulatory review (for marketing authorization) by the European Medicines Agency (EMA) last week.
• In January 2023, Takeda Pharmaceutical (4502 JP) entered into an exclusive licensing agreement with HUTCHMED to further develop and commercialise Fruquintinib outside of Mainland China, Macau and Hong Kong.

• Alteogen Inc (196170 KS)‘s partner has submitted marketing application for Herceptin biosimilar in China. Alteogen will be entitled for royalty after the product is approved and sold in China.  
• In April 2023, Alteogen announced that the company will receive additional milestone of $3 million (~KRW4 billion) from its first ALT-B4 technology transfer partner.
• Alteogen has completed patient recruitment for global phase 3 trial for Eylea biosimilar. Marketing application is expected to be filed in early 2024, with marketing expected to start from 1H25.

• In the past few years, the investment business and M&A of Viva accelerated based on a series of financing tools such as IPO/placement/convertible bonds. Thus, Viva’s scale has grown rapidly.
• Continuous decline in stock price ultimately triggered a “redemption crisis” for Viva’s convertible bonds.Although Viva resolved it by transferring equity in its CRO subsidiary, the prospects are still not optimistic.
• Due to the downturn in innovative drug industry and deterioration of financing environment,whether the high valuation of Viva’s CRO business would be recognized by secondary market is a question mark.

• Celltrion Healthcare (091990 KS) is expected to launch Humira biosimilar, Yuflyma, in the U.S. market in July 2023. Despite heavy competition, as high-concentration citrate-free formulation, Yuflyma has competitive edge.
• In April 2023, Celltrion has launched bevacizumab biosimilar, Vegzelma in the U.S. Vegzelma will be the first product that the company will be directly selling in the U.S.
• Through portfolio expansion, Celltrion increased target market size to $53.7B in 2023 from $20.6B in 2020, representing 161% growth. For 2024, the target market is expected to increase to $91.3B.

• AbbVie’s patent infringement allegations against BeiGene Ltd (6160 HK) is an attempt to obstruct BeiGene through legal means and save Imbruvica’s sales decline in the market. AbbVie came prepared this time.
• BeiGene has a chance to win the lawsuit if without any political factors.But if BeiGene fails to walk away unscathed, any damages/patent royalty would be detrimental to its financial performance/forecast.
• The real key point in determining BeiGene’s future turnaround is not this lawsuit, but the clinical results of TIGIT project. Even with the correction since May, BeiGene is still expensive.

• Viva Biotech Holdings (1873 HK) is raising RMB1.06 billion (~$150 million) through offloading ~24% of its equity interest in Viva Shanghai, the primary entity of the company’s CRO business.
• The consideration implies a revenue ratio and gross profit ratio of 4.90x and 11.04x, respectively. The ratios are at the similar level of the average ratios of other comparable peers.
• Going ahead, Viva Biotech is planning to spin off its CRO business for separate listing in the A-shares market. IPO application is expected to be filed by June 30, 2024.

• There are xx – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Five new deals were discussed this week: Lutronic (085370 KS) tender Offer;Hailan (2278 HK)‘s VGO; Mason (273 HK)‘s Scheme; Tesserent (TNT AU)Scheme, & Kenedix Office (8972 JP)‘s merger. 
• Key updates took place for Toyo Construction (1890 JP), Inner Mongolia Yitai Coal Company Ltd (3948 HK), and HKBN Ltd (1310 HK).

Immix Biopharma has completed its $5.0m at-the-market (ATM) offering program. The funding is as a result of the initial share sales agreement in March 2023 and is anticipated to further support Immix’s pipeline activities with the development of its key assets: the CAR-T treatment, NXC-201, and the tissue-specific therapeutic, IMX-110. We view the ATM offering as a positive, especially in light of the current macro funding environment for biotech companies.

• There has been a big divergence in the share prices of Hanmi Science and Hanmi Pharm in the past two months. 
• This divergence in share price appears to be a bit too excessive and we believe this gap is likely to narrow in the coming weeks.  
• We like a pair trade between going long Hanmi Science and going short on Hanmi Pharm. 

• CSL Ltd (CSL AU) has reduced its profit projection for FY23 due to higher-than-anticipated adverse impact from Fx. The company now expects a Fx headwind of $230–250M from $175M earlier.
• After considering modest recovery of CSL Behring gross margin and generic competition for Ferinject in Europe, CSL expects FY24 NPATA to grow 13–18% to $2.9–3.0B at constant currency.
• All eyes are now on the U.S. launch of the one-time gene therapy Hemgenix for Hemophilia B. CSL expects the first patient to take Hemgenix within the next few weeks.

• M3’s share price dropped around 9% after 4QFY03/2023 earnings, however, it went up by more than 8% since then following the announcement regarding the acquisition of Kantar’s healthcare research businesses.
• Our estimates suggest that new acquisition would not contribute to any meaningful growth in the near term. Despite having large no. of M&A deals, growth rates have started to fall.
• We think there is further downside to M3 Inc (2413 JP) ‘s consensus FY+2 earnings estimates and we would recommend shorting the stock.

• Hanmi Pharmaceutical and Hanmi Science have demonstrated consistent financial performance through aggressive R&D investments, with significant achievements based on internally developed products in 2022.
• The new leadership structure of the company has the potential to improve corporate governance transparency, but there is a need for further shareholder-friendly changes, such as expanding dividend policies.
• Overall, the company’s current status, valuation, and ESG performance trends indicate positive prospects, including transparent management practices, sustained investment in R&D, and plans to enhance dividend policies.