Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 24 years, explains what the movers and shakers have been doing in healthcare and gives his ASX powerplays.

Themes for the week

“The cannabis stocks went on kind of a ride, with the ruling from the UN,” says Scott Power, referring to a decision by the global body to reschedule cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs, where it been listed alongside heroin and cocaine.

“That’s had a big impact on all of the cannabis stocks,” Power said, as it signals a global trend towards a relaxation in cannabis access restrictions.

Early Friday afternoon, Creso Pharma (ASX:CPH) was set to close the week up 152 per cent, at 24.5c; Cann Global (ASX:CGB) was tracking up 83.3 per cent, at 1.1c; and ECS Botanics (ASX:ECS) had gained 70 per cent, to 6.3c.

Another dozen or so cannabis companies were up by at least 10 per cent.

In the cannabis space, Power likes Medlab Clinical (ASX:MDC) and Zelira Therapeutics (ASX:ZLD), two companies developing medical marijuana products based on clinical research.

Medlab on Wednesday provided an update on its NRGBiotic probiotic, currently available in Australian pharmacies, that Medlab is studying for use in combination with commonly prescribed anti-depressant medications for patients who don’t get relief from standard treatment.

The study in 150 patients was delayed because of COVID but a full readout of the results is expected early next year, Medlab said.

At 1.54pm on Friday, MDC shares were up 18.8 per cent for the week, to 28.5c.

Zelira announced on Friday it had received a $1.4 million cash tax refund from the Federal Government for its research and development activities, and planned to use the money to accelerate launches of its insomnia, autism and CBD toothpaste products.

ZLD shares were up 14.9 per cent for the week, to 10c.

Overall, the health sector was looking set to finish the week down 0.67 per cent after CSL (ASX:CSL) pulled down the sector on Friday following the discontinuation of the COVID-19 vaccine it was developing with the University of Queensland.

But Power said that while the result was disappointing for Australia, the impact for CSL is “likely to be negligible” as it was probably never going to be a windfall for the company.

While the financial terms were never disclosed, Morgans estimated that the agreement would probably just have covered the company’s costs.

The losses for the health care sector for the week contrasted with gains for the overall market.

Friday afternoon the All Ordinaries was up 0.27 per cent for the week while the ASX200 was up 0.13 per cent – the sixth straight week of gains for both indexes.

Other movers and shakers

Resonance Health (ASX:RHT) was up 48.4 per cent to 23c after receiving premarket clearance from the US Food and Drug Administration for its artificial intelligence software to assess liver fat based on MRI images.

Swift Media (ASX:SW1) was up 14.7 per cent to 3.9c after the closed-loop entertainment company announced $2 million in contracts and formally launched into the aged care sector.

“One to watch,” Power said.

Control Bionics (ASX:CBL) listed on the ASX on Monday after raising $15 million at 60c a share in an IPO underwritten by Morgans. Its shares were trading Friday afternoon at $1.07, a 78 per cent gain. The company makes technology for people whose disabilities hinder verbal communication.

Capital raisings continued this week with Cynata Therapeutics (ASX:CYP) raising $25.5 million. CYP shares were down 8.6 per cent to 74c.

Powerplays

Neuren Pharmaceuticals (ASX:NEU) gained 8.8 per cent for the week, to $1.29, after receiving a positive opinion from the European Union for its application for Orphan drug designation for its drug candidate to treat three rare neurodevelopmental childhood disorders.

Power says the company is looking for a pharmaceutical partner to conduct phase 3 trials.

“We will be talking a lot more about Neuren in the coming months,” he said.

Power is also watching Mach7 (ASX:M7T), whose shares on Friday afternoon were trading at $1.21, down 7.6 per cent for the week. The enterprise imaging platform company may announce more contract wins, Power said.

Lastly, Antisense Therapeutics (ASX:ANP) may announce new indications for its drug candidate ATL1102, which Antisense is developing to treat Duchenne muscular dystrophy. ANP shares on Friday were trading at 9.4c, down six per cent for the week.

Overall Power is still advising traders to prepare for a “Santa rally” that could last into the new year.

The views, information, or opinions expressed in the interview in ScoPo’s health powerplays are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in ScoPo’s health powerplays.

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