ASX Health Stocks: Most biotechs are still chasing maiden revenue, but here’s a few healthcare stocks with strong earnings
Health & Biotech
Health & Biotech
Most biotech firms on the ASX are clinical stage companies, meaning they are still trying to prove that their drugs are safe and effective – and therefore have no revenues to speak of.
On the other hand, most of the diagnostics and non-clinical plays do generate revenues.
Here’s a pick of the revenue-generating healthcare stocks on the ASX which reported half-year earnings today:
Healthcare informatics company Alcidion (ASX:ALC) reported $18.6m of new contracted sales in the first half, increasing its revenue by 48% on pcp to $19m.
Recurring revenue increased by 58% on pcp to $13.85m.
The company reported bottom line underlying EBITDA loss of $1.1m, an improvement of $2.1m loss in the pcp.
Highlights for the half include a new $2.8m contract with the University Hospital Southampton NHS Foundation Trust (UHS) to implement Alcidion’s Miya Precision IT platform.
“We continued to grow revenue and sign multiple new and renewal contracts in what has been a challenging economic and healthcare environment, particularly in the UK,” said Alcidion’s CEO, Kate Quirke.
Neuroscience biotech Cogstate has warned that first half earnings will be impacted by slower than expected enrolment of patients by pharmaceutical companies in a small number of their large Alzheimer’s trials.
Although the number of patients enrolled each month has increased since its November AGM, the rate of enrolment will not catch up to initial projections.
This slow rate is expected to continue into FY24, and Cogstate says the resulting revenue delays will impact earnings in the second half of FY23.
For the first half, Cogstate expects to report clinical trials revenue of $17.1m, down 12% on the prior half, and down 10-12% from the prior guidance.
Based on this performance, Cogstate expects full year FY23 revenue to be approximately 6-9% below FY22.
Probiotec is a manufacturer and packer of a wide range of health and consumer goods, including prescription and over-the-counter (OTC) pharmaceuticals.
Revenue for the half was 25% higher on the pcp to $106.8m.
Bottom line NPAT increased by 23% to $17.8m, and the company declared interim dividends of 3c, which is 50% higher than pcp.
Probiotec says the strong revenue growth was achieved despite supply chain and labour shortages, which have significantly impacted output.
Gross margins declined in the first half, but are expected to reverse progressively over the second half of FY23 as price rises come into effect fully by 1 July.
Despite the uncertain operating environment, the board expects to deliver sales of between $205m to $215m, with EBITDA of $34.5m to $36m for the full year of FY23.
Cannabis play Cann Group generated revenue from sales in the half of $5.8 million, representing an 83% increase vs the pcp.
The company reported an operating loss after tax of $18.84m versus $8.3 million loss in the previous half.
The loss was mainly caused by higher than usual administration, corporate and R&D costs which reflected the scale up of production activity at its Mildura facility.
Costs associated with the company’s S3 Phase 3 clinical trial also increased during the half.
Cann’s Phase 3 clinical trial, investigating the efficacy of low doses of CBD for treating sleep disturbances, was completed in November.
Three doses of Satipharm CBD capsules were compared to placebo in the randomised, double-blind, placebo-controlled, multicentre clinical trial that included a total of 257 participants with sleep disturbances.
A preliminary review of the primary end-points has shown that trial participants responded positively to CBD treatment, but that the positive response was not statistically superior compared to placebo.
A market update will be released once that review is complete.