• The Health sector index beat the ASX 200 in December
  • But it underperformed the benchmark index over 2023
  • We take a look at the best performing ASX health stocks in December

 

The healthcare sector (ASX:XHJ) had a good month in December, up by over 9% versus the benchmark (ASX 200) return of around 8%.

For the year however, the XHJ was below the benchmark, up 4% vs ASX return of 9%.

 

Source: Google Finance

 

Analysts at Janus Henderson believe the sector is undervalued, and will be entering the new year with compressed valuations just as innovation picks up and a post-COVID reset winds down.

And that should make for a positive outlook, say Janus Portfolio Managers Andy Acker and Dan Lyons.

“Looking ahead, we think the road could begin to smooth out,” wrote Acker and Lyons.

“Attractive valuations, numerous medical advances, and positive long-term demographic trends have put the sector into a position of unusual strength in our view – with the potential to reward long-term investors.”

Eddie Yoon, Sector Portfolio Manager at Fidelity, agrees, saying that looking ahead, the performance of healthcare stocks may be heavily influenced by the direction of the broader economy and the current starting point of valuations.

“While I can’t be sure of where the economy is headed, the low starting point of valuations may be a positive for the sector,” Yoon said.

He added that wherever the markets are headed next, the healthcare sector can offer a combination of defensive and growth characteristics that may be attractive in a variety of scenarios.

“My focus remains on the long term—that is, trying to invest in the most innovative areas of health care, where Fidelity’s research insights may help deliver material value over time,” he said.

Meanwhile, Morgan Stanley says its cautious strategy leans toward safer, defensive sectors with appealing valuations.

“Healthcare sparkles here, historically excelling in late business cycle stages and in times of declining but above-average inflation – a scenario mix we’re likely to see in the coming months,” wrote analysts at MS.

“Despite their defensive nature, it [the healthcare sector] isn’t recession-proof, and could struggle if the economy faces a severe downturn.

“And, in a scenario where the economy gains momentum, it might lag behind more cyclical sectors on a relative performance basis,” said MS.

 

Here are the ASX Biotech Winners for December 2023

Swipe or scroll to reveal the full table. Click headings to sort

Code Name Price % Month Change Market Cap
ATH Alterity Therap 0.007 133.33 $16,814,162
EYE Nova EYE Medical 0.265 89.29 $36,219,490
NEU Neuren Pharmaceut. 25.200 66.34 $3,195,641,124
PSQ Pacific Smiles Grp 1.500 63.93 $245,756,185
CMP Compumedics 0.300 62.16 $53,148,884
BPH BPH Energy 0.047 56.67 $47,192,640
CU6 Clarity Pharma 1.880 49.21 $496,944,400
S66 Star Combo 0.145 45.00 $19,587,032
VHT Volpara Health Tech 1.105 44.44 $279,811,739
NXS Next Science 0.330 43.48 $96,259,384
DXB Dimerix 0.200 42.86 $85,215,978
ALA Arovella Therapeutic 0.125 40.45 $109,084,829
ILA Island Pharma 0.098 34.25 $7,964,310
PYC PYC Therapeutics 0.105 28.05 $410,615,385
OPT Opthea 0.550 27.91 $371,172,835
PAA Pharmaust 0.110 27.91 $41,147,216
DOC Doctor Care Anywhere 0.060 25.00 $22,731,819
LBT LBT Innovations 0.010 25.00 $12,596,770
M7T Mach7 Tech 0.795 24.22 $191,746,882
PNV Polynovo 1.670 23.70 $1,152,688,694
PGC Paragon Care 0.225 21.62 $153,609,681
CBL Control Bionics 0.046 21.05 $6,374,352
IMM Immutep 0.350 20.69 $410,147,923
ADR Adherium 0.054 20.00 $18,005,759
BOT Botanix Pharma 0.180 20.00 $278,486,036
CHM Chimeric Therapeutic 0.036 20.00 $23,226,899
PAR Paradigm Bio. 0.465 19.23 $147,247,454
ARX Aroa Biosurgery 0.850 18.88 $298,794,020
IIQ Inoviq 0.695 18.80 $62,572,717
RCE Recce Pharmaceutical 0.530 17.78 $102,869,441
PBP Probiotec 2.905 17.14 $236,651,111
ADO Anteotech 0.036 16.13 $79,071,928
1AD Adalta 0.024 14.29 $12,619,298
PAB Patrys 0.008 14.29 $16,459,579
IBX Imagion Biosys 0.365 14.06 $11,426,293
OSL Oncosil Medical 0.009 12.50 $17,770,870
ONE Oneview Healthcare 0.235 11.90 $157,310,524
NTI Neurotech Intl 0.066 11.86 $58,854,790
VTI Vision Tech Inc 0.250 11.11 $12,823,483
CTE Cryosite 0.610 10.91 $29,773,833
NC6 Nanollose 0.022 10.00 $3,495,500
LDX Lumos Diagnostics 0.070 9.38 $33,691,003
SOM SomnoMed 0.495 8.79 $53,752,741
CYP Cynata Therapeutics 0.125 8.70 $22,453,973
EXL Elixinol Wellness 0.013 8.33 $7,594,459
CAJ Capitol Health 0.233 8.14 $245,136,163
IMU Imugene 0.108 7.50 $752,754,128
ATX Amplia Therapeutics 0.080 6.67 $15,520,463
IPD Impedimed 0.138 5.77 $278,204,839
IDT IDT Australia 0.105 5.00 $36,905,344
AT1 Atomo Diagnostics 0.022 4.76 $14,062,451
NYR Nyrada Inc. 0.022 4.76 $3,432,191
TLX Telix Pharmaceutical 10.030 4.26 $3,237,266,830
EZZ EZZ Life Science 0.645 3.20 $27,544,725
VLS Vita Life Sciences.. 1.780 3.19 $95,853,244
AGH Althea Group 0.039 2.63 $15,049,670
OCC Orthocell 0.400 2.56 $79,706,943
MVF Monash IVF Group 1.305 1.95 $512,369,815
AC8 Auscann Grp Hlgs 0.040 0.00 $17,621,884
AHC Austco Healthcare 0.195 0.00 $57,462,416
AN1 Anagenics 0.019 0.00 $7,196,779
BIT Biotron 0.098 0.00 $89,325,275
BWX BWX 0.200 0.00 $39,997,500
BXN Bioxyne 0.011 0.00 $20,918,099
CDX Cardiex 0.121 0.00 $17,354,743
JTL Jayex Technology 0.009 0.00 $2,531,507
MDC Medlab Clinical 6.600 0.00 $15,071,113
ME1 Melodiol Glb Health 0.002 0.00 $9,457,648
SHG Singular Health 0.038 0.00 $5,369,790
TRI Trivarx 0.030 0.00 $10,142,360
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LBT Innovations (ASX:LBT)

LBT has been rising since its AGM in late November, where management provided an update on the company’s goals in 2024.

LBT CEO Brent Barnes said the expectations in 2024 include completion of the product development project with AstraZeneca, with a global rollout in second half of the year.

In January, the microbiology diagnostic equipment manufacturer LBT announced a partnership with AstraZeneca and Thermo Fisher to speed up the development of LBT’s APAS AI software platform for microbial testing in the pharmaceutical sector.

The software is said to allow the speed up of laboratory processing of clinical samples by utilising AI to scan for microbial contamination.

In addition, LBT expects additional pharmaceutical companies to commence validations in 2024, which will build the company’s sales pipeline.

 

Neuren Pharma (ASX:NEU)

Neuren soared last week after announcing positive results of its Phase 2 results of NNZ-2591 in children with Phelan-McDermid syndrome (PMS).

NNZ-2591 was given to all patients in the study as an oral liquid dose twice daily, with escalation in two stages up to the target dose of 12mg/kg during the first six weeks of treatment, subject to independent review of safety and tolerability data.

NEU says significant improvement was observed by both clinicians and caregivers from treatment, across multiple efficacy measures.

NEU also says NNZ-2591 was safe and well tolerated, with no clinically significant changes in laboratory values or other safety parameters during treatment.

Seperately, the company said the last subject to be screened this week will complete the enrolment of subjects into its Phase 2 clinical trial of NNZ-2591 in Angelman syndrome (AS).
Top-line results from the trial are expected to be available in Q3 2024.

The Phase 2 trial will have enrolled children between aged 3 to 17 years at three hospitals in Australia. The study will examine the safety, tolerability, pharmacokinetics and efficacy of NNZ-2591 over 13 weeks of twice-daily oral liquid doses.

NNZ-2591 is a synthetic drug which is is under development by Neuren for the treatment of Rett syndrome, fragile X syndrome, Phelan-McDermid syndrome, Pitt Hopkins syndrome (genetic disorders), Prader-Willi syndrome, as well as Angelman Syndrome.

 

Intelicare (ASX:ICR)

ICR has been rising after executing a non-binding Memorandum of Understanding (MoU) with Bolton Clarke as a precursor to a Strategic Partnership Agreement.

Bolton Clarke is Australia’s largest independent not-for-profit aged care provider, supporting more than 130,000 people at home and in its 88 residential homes and 38 retirement villages.

ICR also executed a binding Reseller Agreement with JNC Technologies to deploy the InteliCare platform to JNC’s client Hardi Aged Care.

The contract value is expected to be $1.8 million in hardware implementation, and on full deployment will generate in excess of $0.5 million in annual recurring SaaS fees with an initial term of three years, representing InteliCare’s largest commercial deployment to date.

 

Pacific Smiles Group (ASX:PSQ)

Dental clinics network, Pacific Smiles Group, provided an update on its trading performance as of the close of business on 20 December.

Patient fees came in $141.1m, a 10.5% increase YoY, and same centre patient fees also increased 9.7% YoY.
PSQ has also provided guidance for FY24.

Patient fees for the full year are expected to come in the range of $293m to $297m, and Underlying EBITDA in the range of $26m to $28m.

Additionally, PSQ said the board has assessed the $1.40 in cash per share takeover offer from Genesis Capital submitted earlier this week.

Despite acknowledging that the share price performance of Pacific Smiles has been disappointing, the board considers that the offer is “opportunistic and materially undervalues Pacific Smiles”, and has therefore rejected the proposal.

 

Nova Eye Medical (ASX:EYE)

Nova Eye has been rising since announcing that five MACs (Medicare Administrative Contractors) have deferred the proposed USA reimbursement changes from 23 December 2023, to January 29, 2024.

The deferral by all five MACs is a positive outcome for the near-term sales of the company’s iTrack portfolio of canaloplasty devices, which continue to be strong since the US launch of iTrack Advance in May.

As a quick background, in November EYE reported that four additional MACs have proposed LCD (local coverage determination) changes on Medicare reimbursement of minimally invasive glaucoma surgery (MIGS) procedures in the US.

This would have hit Nova Eye particularly hard, as “approximately 40% of the company’s global revenues are derived from health care facilities located in the 38 states covered by these four MACs,” according to a release from EYE.

But a fortnight later, EYE advised that the final draft of the LCD, issued by the US National Government Services (NGS), has been deferred from December 23 to March 23, 2024.

The NGS administers insurance reimbursement claims of healthcare facilities in the states of New York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, Maine, Minnesota, Illinois, and Wisconsin.

NGS said the the deferral is to “allow more time to make decisions regarding comments received”.

Reimbursement coverage of canaloplasty surgeries in the 38 US states covered by the five MACs beyond January 29, 2024, will now depend on whether the proposed LCDs are implemented.

 

Compumedics (ASX:CMP)

During the month, medical devices company Compumedics said it has received two new MEG orders totalling $9.3 million in China.

MEG is a neuro-imaging device for mapping brain activity by recording magnetic fields produced by electrical currents occurring naturally in the brain, using very sensitive detectors.

The orders today were made by Tsinghua and Tianjin Universities in China. These sales are via Compumedics’ long-term Chinese distributor for the company’s brain research technology.

The MEG systems will be shipped to both Tsinghua and Tianjin Universities in FY25, due to the lead times associated with production of the MEG systems.

One order is for two single-helmet MEG systems, and the other is for a dual-helmet MEG system. Both will be configured for hyperscanning (measurement of two subjects simultaneously to study their interaction).

 

Clarity Pharmaceuticals (ASX:CU6)

Clarity says the first patient has been dosed in the registrational Phase 3 prostate cancer trial (called CLARIFY) with Cu-64 SAR-bisPSMA.

The aim of the CLARIFY trial is to detect regional nodal metastases in participants with prostate cancer prior to radical prostatectomy.

The final results from the CLARIFY trial are intended to provide sufficient evidence to support an application to the FDA for the approval of the 64Cu-SAR-bisPSMA product in pre-prostatectomy patients.

 

And Here are the ASX Biotech Losers for December 2023

Code Name Price % Month Change Market Cap
GTG Genetic Technologies 0.135 -46.00 $16,158,414
NSB Neuroscientific 0.040 -43.66 $5,784,195
NOX Noxopharm 0.071 -38.26 $20,748,894
BP8 Bph Global 0.001 -33.33 $2,753,345
TD1 Tali Digital 0.001 -33.33 $3,295,156
SNT Syntara 0.022 -26.67 $18,282,139
MXC Mgc Pharmaceuticals 0.500 -25.93 $18,245,816
RGS Regeneus 0.003 -25.00 $919,311
RHY Rhythm Biosciences 0.135 -22.86 $26,537,111
4DX 4Dmedical 0.710 -22.83 $281,436,336
HXL Hexima 0.018 -21.74 $3,006,713
IRX Inhalerx 0.029 -21.62 $5,503,242
AMT Allegra Medical 0.045 -21.05 $5,980,551
UBI Universal Biosensors 0.185 -17.78 $39,288,345
AHK Ark Mines 0.195 -17.02 $8,577,504
HCT Holista CollTech 0.010 -16.67 $2,788,001
EPN Epsilon Healthcare 0.024 -14.29 $7,208,496
IVX Invion 0.006 -14.29 $38,529,793
PTX Prescient 0.067 -14.10 $52,345,787
AVE Avecho Biotech 0.004 -12.50 $11,092,540
MX1 Micro-X 0.105 -12.50 $54,396,732
ZNO Zoono Group 0.044 -12.00 $8,890,665
RNO Rhinomed 0.030 -11.76 $8,571,591
OIL Optiscan Imaging 0.083 -11.70 $69,333,287
ZLD Zelira Therapeutics 0.905 -11.27 $10,212,440
VFX Visionflex Group 0.008 -11.11 $11,335,930
GSS Genetic Signatures 0.440 -10.80 $62,381,608
MEM Memphasys 0.011 -10.75 $12,436,941
IMC Immuron 0.076 -9.52 $17,312,674
MDR Medadvisor 0.210 -8.70 $112,120,614
TRP Tissue Repair 0.210 -8.70 $11,719,683
TRU Truscreen 0.021 -8.70 $8,820,532
1AI Algorae Pharma 0.011 -8.33 $18,273,642
SDI SDI 0.725 -8.23 $86,177,509
GLH Global Health 0.115 -8.00 $6,965,944
CYC Cyclopharm 1.900 -7.77 $181,605,909
DVL Dorsavi 0.012 -7.69 $7,159,939
ICR Intelicare Holdings 0.026 -7.14 $6,105,437
RHT Resonance Health 0.058 -4.92 $27,546,683
CAN Cann Group 0.100 -4.76 $41,566,570
VBS Vectus Biosystems 0.300 -4.76 $16,494,902
OSX Osteopore 0.043 -4.44 $7,126,257
ACW Actinogen Medical 0.022 -4.35 $48,453,512
ALC Alcidion Group 0.072 -4.00 $98,000,545
RSH Respiri 0.030 -3.23 $31,796,068
RAC Race Oncology 0.885 -2.75 $138,875,117
MVP Medical Developments 0.750 -2.60 $64,728,914
PCK Painchek 0.038 -2.56 $54,562,278
ACR Acrux 0.043 -2.27 $12,454,132
PIQ Proteomics Int Lab 0.860 -2.27 $105,207,860
HGV Hygrovest 0.051 -1.92 $11,146,462
ANP Antisense Therapeut. 0.059 -1.67 $52,289,608
CGS Cogstate 1.485 -1.66 $254,483,452
RAD Radiopharm 0.070 -1.41 $26,386,376
BDX Bcaldiagnostics 0.099 -1.00 $25,163,916
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