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 of the week
“It’s sort of coming up on AGM (annual general meeting) season, so there’s more newsflow coming out, especially around first quarter tracking activities,” Scott Power says.
“The first quarter looks pretty solid across the market.”
Biotech giant CSL (ASX:CSL) on Wednesday provided a trading update at its AGM, tightening its earnings guidance.
The blood products giant said it expected to lift FY2021 earnings by three to eight per cent, compared to the zero to eight per cent previously forecast.
Pathology provider Sonic Healthcare (ASX:SHL) also provided a quarterly trading update, saying business was up but it was still not providing full-year guidance due to the unpredictability of the pandemic.
Health imaging company Pro Medicus (ASX:PME) announced on Thursday that its German subsidiary had signed a seven-year, $10 million contract with Munch-based LMU Klinikum, one of the largest university hospitals in Europe.
“They’re expanding their footprint in that part of the world, which is very positive,” Power said. “Their share price has responded very positively, it’s up a lot.”
Midafternoon on Thursday, Pro Medicus shares were up 7.2 per cent to $31.11, a more than one-year high.
Mesoblast (ASX:MSB) announced on Wednesday that a clinical trial involving its stem cell treatment remestemcel-L had enrolled half of the 300 severely ill COVID-19 patients needed for the study.
There’s no official word on why readouts on Mesoblast’s phase 3 trials of stem cell treatments to heart failure and lower back pain have been delayed, Power said, but clinical trial analysis can take extra time.
Meanwile Medical products distributor EBOS Group (ASX:EBO) had a “very strong quarter” with profit up 15 per cent over the prior corresponding period, Power said.
The announcement pushed EBO shares up from $22 to over $25 – past Morgans’ price target of $24.58.
Overall, said Power, “the vibe feels good”.
ScoPo’s powerplays
Power is tipping ImpediMed (ASX:IPD) to rise on the release of the Brisbane-based company’s metadata analysis of using its bioimpedance spectroscopy products to detect lymphoedema, or limb swelling.
“When that hits, we expect that will be greeted positively by the market,” Power said.
Power is also eyeing Elixinol Global (ASX:EXL), one of the biggest victims of last year’s cannabis collapse, as a turnaround story under new management.
While the hemp-derived nutraceutical company isn’t profitable, it has a market capitalisation of just $30 million and $16 million in cash, Power noted.
“I think it’s one that’s definitely worth watching closely.”
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