ASX Biotech August Winners: Sector down despite CSL and Cochlear’s strong results, but don’t panic…

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• Earnings reports dominated headlines in August
• Despite solid results from ASX healthcare giants, the sector finished lower
• We take a look at which ASX healthcare stocks performed the best in August

Large cap healthcare winners and losers

August was all about earnings, and despite strong results from sector leaders CSL (ASX:CSL) and Cochlear (ASX:COH), the ASX Healthcare Index (XHJ) still finished the month lower by 1%.

Among large caps, heavyweight CSL jumped almost 4% after announcing a 10% rise in underlying profit to $2.61 billion for the full year. The company also said it was embarking on boosting the yield of its key raw material, immunoglobulin.

Cochlear shares also climbed 6% after announcing statutory profit growth of 4% to $301 million for the full year, and plans to boost its revenue and margins in FY24.

Other large healthcare stocks that announced big profit growth in FY23 was medical imaging company Pro Medicus, with a 36.5% increase to $60.6 million.

Meanwhile, pathology and radiology specialist Sonic Healthcare (ASX:SHL), reported a disappointing year with revenue down by 11% and NPAT declining by 53% to $685m. Sonic cited a decline in Covid-19 testing revenue as the major factor for the year’s sluggish performance.

ResMed (ASX:RMD) also tumbled 10% after reporting that its gross margin has contracted by 0.8% to to 55.8%, despite revenue increasing by 18%.

Don’t worry about short term fluctuations – expert

Over in the US, the NASDAQ Biotechnology Index (NBI) also had a soft month, closing around half a per cent lower.

J.P. Morgan advised investors not to worry and expect pullbacks in the biotech sector – both big ones like 2022’s rout, and small ones like we felt during March’s bank stress.

Because despite these selloffs, says J.P, the life science sector has always rewarded long-term investors.

“While the risk for stocks is volatility, the reward comes with the return of long-term capital appreciation.”

Even though markets can always have a bad day, week, month or even year, history suggests healthcare investors are less likely to suffer losses over longer periods.

“But that said, keep the time horizon of your goals in mind. If you need the money in a year, you should have a very different portfolio than if you don’t need the money for 20 years.”

ASX Biotech Winners in August

Lumos Diagnostics (ASX:LDX)

Just like in July, Lumos was once again the best performing biotech in August.

Lumos surged after announcing that a core patent covering the camera technology used in its reader platform has been granted for Europe and Japan.

The patent, called “Device for reading an IVD assay”, covers the use of it’s proprietary camera technology which is incorporated in many of its readers.

These readers have become a critical component of new point-of-care tests as they automate the reading of results, which in turn allows them to be seamlessly integrated into electronic medical record systems.

Arovella Therapeutics (ASX:ALA)

Arovella got a speeding ticket from the ASX after its shares surged on August 30.

The company responded and said that Blue Ocean Equities had circulated a report which highlighted its recent progress and upcoming milestones as well as an upcoming roadshow.

“Whilst there was no new information in this summary, it was presented in a new format with outreach to an extended group of investors via social media,” noted Arovella.

In addition, Arovella announced on 27 June positive data for a technology under option from the University of North Carolina, and has made public its intention to seek a licence for this technology.

“This due diligence process is ongoing and the negotiations remain preliminary and early stage and no formal agreement has been reached,” said the company.

Botanix Pharma (ASX:BOT)

Botanix appointed Dr Howie McKibbon as CEO, effective 24 August.

Dr McKibbon was previously chief operating officer for Botanix, and has more than 25 years experience in the pharmaceutical industry. He has personally led the successful launch of more than 15 products, according to the ASX release.

Botanix says the appointment comes at an important time in the development of Botanix, with the acceleration of commercial activities in preparation for the pending launch of Sofpironium Bromide.

The FDA approval of Sofpironium Bromide is targeted for the end of September.

BCAL Diagnostics (ASX:BDX)

BCAL shares jumped after announcing breakthrough results from its Precion clinical study in the US.

Results showed that BCAL’s breast cancer diagnostic test achieved an impressive sensitivity of 90%, and a specificity of 85.5%. These results were consistent with the findings of earlier studies conducted in Australia using a different mass spectrometry platform.

BCAL says the replication of these results is a major breakthrough in the path to commercialisation of the BCAL test, with sales expected to commence in the second half of calendar 2024.

Clarity Pharma (ASX:CU6)

Investors got excited after Clarity announced that the first participant of cohort 4 of the theranostic CL04 trial investigating 64Cu/67Cu SARTATE in neuroblastoma has been treated at the highest dose cohort of 375MBq/kg body weight.

Clarity also said that the first participant of cohort 3 in the theranostic SECuRE trial investigating 64Cu/67Cu SAR-bisPSMA in metastatic castrate-resistant prostate cancer (mCRPC) has been treated at the highest dose level of 12GBq.

MGC Pharma (ASX:MXC)

MXC rose after the successful completion of its pre-clinical Chronic Toxicology Evaluation of CimetrA study.

Results supported previous pre-clinical and clinical data, and demonstrated full chronic safety and toxicology profile of CimetrA in large animals.

The trials were performed under animal EC approval in the GLP certified Lab Science in Action, Ness Ziona, Israel.

MCX says this study was an important step in the IND submission preparation for the FDA.

Hygrovest (ASX:HGV)

The specialist investment company, which also invests in cannabis, has appointed HD Capital Partners as its investment manager.

Hygrovest says HD is a value-oriented, fundamental bottom-up stock picker focussing on opportunities in listed small cap equities markets.

The appointment is for a term of five years.

Compumedics (ASX:CMP)

For the full year, Compudmedics’ revenue grew by 12% to a record $42.4m.

EBITDA returned to profit in the second half at $2.8m, whilst substantial investment in commercialisation activities associated with both the Somfit and MEG opportunities continued.

The company anticipates revenues for FY24 will be more than $44m, and EBITDA is expected to be more than $5m, with the growth driven primarily by our new SaaS product offering.

ASX Biotech Losers in August

At Stockhead we tell it like it is. While MGC Pharma is a Stockhead advertiser, it did not sponsor this article.

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