Health Check: After a case of the baby blues, Monash IVF fields $300m takeover offer

•  Monash IVF has rejected an initial 80 cents a share offer from a consortium accounting for 19.6% of the company
• Mesoblast to launch phase III trial for adults with graft-versus-host disease
• Island joins germ warfare coalition of the willing

Monash IVF Group (ASX:MVF) has attracted a non-binding takeover offer valuing the company at an indicative 80 cents a share, a circa 24% premium on Friday’s closing price.

This comes after a challenging six months – to put it mildly.

The board has rejected the unsolicited indicative entreaty – which values the company at $310 million – as “opportunistic”.

The bidder is a consortium consisting of private equity mob Genesis Capital and the veteran listed investment company Washington H Soul Pattinson (ASX:SOL).

The parties this morning revealed a 19.6% Monash IVF holding, which sounds like a decent beachhead.

The Monash IVF board decided the proposal “in its current form” was “opportunistic in its timing and materially undervalues the company”.

While the offer is cash, the bidders suggest allowing Monash IVF shareholders to roll their equity into a privatised company.

Monash IVF notes the implied multiple of 7.7 times enterprise value to underlying earnings is a “substantial discount to comparable IVF transactions in the Australian market.”

The proposed scheme of arrangement is subject to a unanimous recommendation of the Monash IVF board.

Monash IVF has appointed Macquarie Capital as its financial adviser and Clayton Utz as its legal adviser.

Oh baby! What a year …

Monash IVF has had a shocker of a year, given two separate embryo mix-ups and declining market share.

In an update on Friday, Broker Canaccord notes the whole sector was flat in the September quarter, especially in the company’s home state of Victoria.

“Through-cycle demand resilience has been a central tenet of the IVF investment thesis in this country for over a decade,” the firm says.

“Suddenly it looks more tenuous.

“Demand was unusually weak all through [the 2024-25 financial year] and that has persisted, most notably in Victoria.”

The firm says while higher-end providers have locked in specialists, the lower-cost providers have gained market share in NSW and Victoria.

“This has probably been more of a headwind for Monash in NSW and Victoria than in Queensland, where budget IVF offerings have typically held higher market share to begin with.”

At the company’s AGM last Thursday, management reiterated full year profit guidance of $20-23 million, albeit at the bottom of the range.

The company reported new patient registrations had declined 12% since June 30 compared to the previous corresponding period. The weakness was largely in Victoria and NSW.

On the brighter side, the company should start paying dividends again after deciding against a final payout last year.

Presciently, Canaccord said “the prospect of private equity coming in to confirm Monash IVF’s equity value remains a popular idea with holders.”

Private equiteer subsumed then listed rival Virtus Health in 2022, so there’s certainly a precedent.

Prior to the first embryo disaster in April, Monash IVF shares traded at $1.08.

The shares this morning rocketed 41%, to 86 cents.

Another day, another contract for Pro Medicus

It’s another day, another contract – or three – for radiology imaging tearaway Pro Medicus (ASX:PME), which has signed a trio of new US clients with a combined minimum value of $29 million.

The takers are paediatric hospital Children’s of Alabama, the Roswell Park Comprehensive Cancer Center, in Buffalo, New York and the Vancouver Clinic in Washington state (not Canada, silly).

The contracts are entirely cloud based and the clients will avail of all of Pro Medicus’ offerings.

A week ago, the company signed up Advanced Radiology Management on a $44 million, five-year contract.

The latest contracts bring the company’s minimum total contract value for sales for the December (first) half to $273 million.

Pro Medicus co-founder and CEO Dr Sam Hupert notes the diverse nature of the clients.

This shows the company’s products are “ideally suited to virtually all segments of the market, from smaller groups all the way through to some of the largest integrated delivery networks and academic medical centres.”

Island joins heavyweight germ-busting group  

Island Pharmaceuticals (ASX:ILA) has joined a US mob called the Medical Countermeasures Coalition (MC2), which is all about devising countermeasures to protect against biological warfare.

Island’s acquired compound Galidesivir protects against Marburg, a severe and often fatal viral hemorrhagic fever similar to Ebola.

Admission to the MC2 furthers Island’s aim of advancing Galidesivir “as a critical countermeasure against high priority threats and for inclusion in government stockpiles”.

Led by former senior US officials, MC2 includes non-profit  organisations, academic groups and industry partners.

These parties are “dedicated to advancing the development, accessibility, and deployment of medical countermeasures including vaccines, therapeutics, diagnostics and related technologies”.

Last week the company announced the FDA would allow Galidesivir to be tested under the Animal Rule.

This provision is for diseases that are too dangerous to be tested on  two-legged animals.

Mesoblast to launch adult GvHD stem cell trial 

Having won US Food and Drug Administration approval for its stem cell treatment for paediatric and adolescent graft versus host disease (GvHD), Mesoblast (ASX:MSB) is seeking to extend its remit to adult sufferers.

This makes sense, given the adult population is up to four times greater.

In partnership with the Blood and Marrow Transplant Clinical Trials Network (BMT CTN), the company will trial its Ryoncil treatment on adults who don’t respond to traditional corticosteroid treatment.

BMT CTN is funded by the National Institutes of Health, so it’s good to see not all the US public healthcare funding dollars have dried up.

The company hopes to start enrolling in the March quarter.

The patients will receive either the standard of care ruxolitinib alone, or combined with Ryoncil.

GvHD occurs when donated bone marrow material attacks the recipient’s body.

The BMT CTN carried out about 80% of all US allogeneic (off-the-shelf) bone marrow transplants.

Other studies suggest that around half of all patients on ruxolitinib did not achieve a response at day 28. More than two-thirds of these patients won’t survive beyond 100 days.

A hot tip from Proteomics

Race punters should keep an eye on oxidative stress levels as much as the form guide.

Proteomics International Laboratories (ASX:PIQ) cites research showing oxidative stress-free nags accounted for 88% of top three finishers. They were also 76% more likely to place and 49% more likely to win.

It all makes sense because oxidative stress is linked to muscle damage, poor recovery and increased injury risk.

Proteomics and the University of Western Australia carried out the study, covering 75 racehorses over 216 competitive events.

Proteomics is developing an oxidative stress assay.