- Scott Power is enthusiastic about the state of the market and says investors need to position themselves for some extraordinary opportunities
- Nanosonics and Volpara Health Technologies have updates due next week
- His “powerplay” picks are Impedimed (again) and Neuren
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 health and gives his ASX powerplays.
Themes for the week
“Without sounding like a broken record, just fascinating times, very interesting where everything’s headed,” says Scott Power.
While there have been some jitters in the global equities markets this week due to surging coronavirus numbers, Power has been very bullish of late and remains so.
“There’s a new dawn,” he says. “It’s always coldest before sunrise. As investors, we’ve got to position ourselves to be in front of these extraordinary opportunities.”
And it was a good week for Impedimed (ASX:IPD), which Power has talked up as one of his “powerplay” picks on several recent occasions.
IPD shares rose from 9c last week to 12c on Wednesday and were trading at 11c on Friday afternoon, up 18.3 per cent for the week, following the first commercial sales of its SOZO devices to monitor patients with heart failure.
“Again, I don’t want to sound like a broken record, but that’s going higher,” he said of the Brisbane-based medical device company.
Another recent Power favourite, Micro-X (ASX:MX1) was meanwhile up 34.7 per cent to the week at 33c, after amending its distribution agreement with Carestream Health for its Nano bedside x-ray device, to make the deal non-exclusive.
“It creates a lot more options for them,” Power said.
Virtus Health (ASX:VRT) was up 6.6 per cent for the week, to $5.49 (as of 3pm Friday afternoon), after the fertility company gave a trading update at its annual general meeting.
The company said for the three months to September 30, its revenue was up 19.4 per cent to $83.9 million, compared to the same period a year ago, as more women opted for IVF cycles as the coronavirus crisis eased.
The numbers are “very good for them”, Power said.
Neuren (ASX:NEU) gained 1.2 per cent for the week, to $1.315, after the Melbourne biotech company received ethics approval to begin a phase 1 trial in Australia of its potential treatment for three rare neurodevelopmental disorders. The trial will test the drug in 16 healthy volunteers and will serve as a stepping stone for a phase 2 trial next year.
Mach7 (ASX:M7T) rose 18.6 per cent for the week, to $1.21, after signing a seven-year, $5.3 million contract with Trinity Health in the United States for the use of its enterprise clinical imaging platform.
Pro Medicus (ASX:PME) retreated 3.6 per cent for the week, to $31.81, despite signing a five-year, $8.5 million renewal deal with US-based private outpatient radiology provider Zwanger Pesiri.
Capital raisings continued this week, with CBD hemp oil producer Elixinol Global (ASX:EXL) raising $8.2 million. Its shares were down 8.1 per cent for the week, to 17c.
“That’s a really interesting turnaround story in the medical cannabis space,” Power said.
Watching Nanosonics and Volpara
Next week there are two updates for biotech investors to keep an eye on.
Ultrasonic probe sterilisation company Nanosonics (ASX:NAN) will hold its annual general meeting on Tuesday.
‘”We’re looking for a bit of an update on their next product launch,” Power said.
And Kiwi breast density software company Volpara Health Technologies (ASX:VHT) will post its first-quarter earnings on Wednesday.
ScoPo’s powerplays
As previously mentioned, Power is a big believer in Impedimed, which has an overdue “metadata analysis” to support its story on lymphedema.
“We’re still waiting on that,” Power said. “It will come shortly. I wouldn’t be surprised if it’s next week.”
Power is also waiting for a catalyst from Neuren Pharmaceuticals, which has a phase 1 study due to conclude in January and an orphan drug decision in Europe due that month as well.
NEU shares were trading at $1.29 close to the close on Friday.
“I’d say they could run up to two dollars,” Power said.
Overall, Power says that news about the coronavirus vaccine is alleviating a lot of the market’s concerns.
To be clear, he’s not just looking for a Santa rally – he predicts the bull run is going to continue right into next year.
While COVID-19 cases will likely stay elevated for awhile in Europe and the United States as the Northern Hemisphere moves into winter, Power likens vaccine development to a ray of hope-providing sunshine.
“It’s coldest just before the sun rises,” he says.