The message to Cochlear is loud and clear: lift your game on services revenue. Pic via Getty Images
Health & Biotech
Today’s burning question from Cochlear’s (ASX:COH) poorly received interim results is whether users are on a buyer’s strike ahead of upgraded implants and processors – or whether the problems are more structural.
On Friday Cochlear shares tumbled almost 14% after the company reported a 7% net underlying profit increase to $206 million.
Overall sales rose 6% to $1.17 billion, but investors zeroed in on a 12% decline in services revenue (mainly the processors).
Management also guided to the bottom end of full-year guidance range of $410-430 million.
The company attributed the poor services result partly to cost-of-living pressures, especially in the US.
For example, customers are sticking with the older Nucleus 7 processors rather than the recently released Nucleus 8.
Cochlear also plans to release a new processor Kanso 3 this year, as well as a mystery implant.
The theory goes that customers are holding out for these new offerings, but there’s trouble ahead if they are happy with the existing products.
Most brokers ascribe a ‘hold’ style call to the stock, although UBS has an ongoing sell and Wilsons cut its rating from ‘above weight’ to ‘market weight’.
Comments include “a jarring miss”, “disappointing” and “poor quality”.
But revised valuations range from $263 a share (Jarden) to $290 (Citi) – mainly above the current share price.
Interestingly, investors also sold off fellow biotech big caps CSL (ASX:CSL), Pro Medicus (ASX:PME) and ResMed (ASX:RMD) after their results.
None of them were disastrous – Pro Medicus produced a pearler – but the companies have felt the weight of investor expectations.
PYC Therapeutics (ASX:PYC) is testing investors’ increased appetite for biotech raisings with a chunky rights offer to bring in up to $146 million.
The proceeds mainly will support PYC’s three clinical stage trials, for eye and kidney diseases.
Compared with recent multi-tranche offerings involving convertible instruments or piggyback options, PYC’s non-renounceable is refreshingly simple.
Investors are entitled for one share on a one-for-four basis at $1.25, a 2.7% discount to Friday’s close.
The institutional round kicks off today.
Controlled by chairman Alan Tribe, 34% holder Australian Land Pty Ltd has agree to subscribe to $35 million of shares – so that’s a good start. The company is also assured of $70 million, which is the component underwritten by five other holders.
Post raising, PYC expects all four of its pipeline programs to be funded through to the 2026-27 year.
The most advanced is a phase I/II effort for retinitis pigmentosa type II, a rare blinding childhood disease.
Other clinical-stage programs are for autosomal dominant optic atrophy and polycystic disease, while a Phelan Mc-Dermid Syndrome (neurological disease) program is preclinical.
“This extension to the company’s funding runway enables us to deliver clinical efficacy data for our drug development programs simultaneously,” CEO Dr Rohan Hockings says.
“The company now has scope to deliver substantial patient-impact across multiple high-value indications that lack approved treatment options today.”
Avecho (ASX:AVE) has used an ASX share price query to remind investors of its sector-leading, cannabis-based phase III insomnia trial.
On Valentine’s Day, the bouse queried why investors had developed a love for the stock, which gained 40% (0.2 cents) on no apparent news.
Instead of just saying ‘no idea, Guv’, Avecho alluded to the January 30 update on the 500-plus patient trial, which is due for interim analysis in mid 2025.
Avecho’s CBD (cannabinoid) capsule is jazzed up with Avecho’s proprietary delivery tech tocopheryl phosphate mixture (TPM), which enhances the bioavailability of the capsules.
(Avecho was all about TPM when the company was called Phosphagenics, before an infamous fraud unravelled things).
The company had targeted 519 patients for the trial, with 1750 insomniacs registering their interest. As of the end of December, 70 patients had received the eight-week treatment.
Patient enrolment last year was “steady, but slower than anticipated.”
This was due to the stringent criteria used to define patient eligibility, “as well as the careful design aimed at optimising the trial’s chances of success.”
In December, Avecho won ethics approval to include some previously ineligible participants who had expressed interest in the study.
As things stand, Avecho is poised to be the world’s first medical cannabis company to report the results of a phase III insomnia trial.
“The upcoming interim analysis … has already opened substantial opportunities for partnership discussions and licensing agreements, both locally and globally,” says Avecho chief Dr Paul Gavin.
Neurizon Therapeutics (ASX:NUZ) is confident of getting its advanced-stage motor neurone disease (MND) trial back on track, after the US Food & Drug Authority (FDA) made a “straightforward request” for more data.
The news pushed Neurizon shares sharply higher this morning.
In mid-January the FDA placed the company’s request to carry out the trial on ‘clinical hold’, which meant it wasn’t happy with all aspects of the study.
The FDA now says it wants additional animal exposure data to confirm the adequacy of the drug candidate, NUZ-001.
If the agency is happy with this additional info, Neurizon can go ahead with the phase 2/3 trial, aimed at accelerated approval for treating amyotrophic lateral sclerosis (ALS, a form of MND).
The study will be done under the auspices of Healey, a collective ‘road test’ of several ALS therapies.
This confers efficiency benefits such as common infrastructure and shared placebo patients.
The company says the impact of the FDA’s request on trial timelines is “currently being assessed”, but notes the FDA did not raise any safety concerns arising from previous NUZ-001 stduies.
“We appreciate the FDA’s guidance and are pleased that the FDA has responded with only one straightforward request for additional information,” CEO Dr Michael Thurn says.
NUZ-001 is re-working of monepantel, an old veterinary drug used as a sheep dip.
Monepantel works by inhibiting the MTOR signaling pathway.
MTOR stands for ‘mechanistic Target of Rapamycin’, which sounds like something out of a Tolkien novel but which plays a central role in cancer cell growth and neuron degeneration.
Health & Biotech
Health & Biotech
Health & Biotech
Health & Biotech
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