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Health & Biotech
Pathology and radiology giant Sonic Healthcare (ASX:SHL) says it is emerging from its post-pandemic malaise, with revenue growth of 10% in the first four months of the new financial year.
Fronting shareholders at the group’s AGM today, management affirmed August’s guidance of earnings before interest tax, depreciation and amortisation (ebitda) of $1.7-1.75 billion, also up to 10% higher than the previous year in constant-currency terms.
Last year Sonic grew revenue by 16% to $8.9 billion, albeit with a “dramatic” but expected decline in pandemic-related turnover, from $485 million to $62 million.
Cost pressures resulted in a 25% net profit slump to $511 million, but management now reports that “inflationary pressures and other costs” are easing.
To buttress its growth, Sonic has gone on a $655 million acquisitive splurge, acquiring smaller practices in Germany, Switzerland and the US.
There looks to be more to come, although further purchases now can’t include the imaging business of local rival Healius (ASX:HLS) that was sold to private equity for around $800 million.
“The company’s balance sheet remains in a very strong position with gearing still below pre-pandemic averages,” chimes chairman Prof. Mark Compton.
“This strength will enable the company to take advantage of additional sensible growth opportunities as they arise.”
Sonic derives 24% of its revenue from the US – its most important geography – so it will be interesting to see if Trumpcare affects the price of its services there.
No-one’s panicking – yet.
Sonic shares were 4.7% higher at $27.43.
Sonic was the more substantive of a string of health and companies holding their AGMs today, although we gotta say revelations were few and far between.
At Paradigm Biopharmaceuticals’ (ASX:PAR) get-together, executive chair Paul Rennie addressed the elephant in the room of the company’s soft share price, despite the company girding for a pivotal phase III knee osteoarthritis trial.
“We recognise and share the disappointment with the current share price performance, which in my view does not accurately reflect the ongoing progress, positive data, and strong engagements with global regulators and commercial partners.”
Rennie adds that the company has been buoyed by the level of demand for access to the company’s repurposed drug, via the Therapeutic Gods Administration’s special access scheme.
Over at Noxopharm (ASX:NOX), chairman Frederick Bart told – or reminded – holders that the autoimmune diseases specialist was due to start a clinical trial next year, applying its Sofra DNA platform to treat lupus.
“We have seen clear external interest in what we are doing, from companies around the world,” Bart says.
“We have recently signed several material transfer agreements with some large international companies, who are now studying our Sofra technology at their own expense – and that expense is for some of them not insignificant.”
To date, companies that incurred a first ‘strike’ on their remuneration report last year largely have managed to avoid a second one and a subsequent motion to spill the board.
The exception is Recce, with a narrow 25.59% of holders rejecting the ‘rem report’ for a second time (the threshold is 25% opposition).
However, only 12% of holders supported the flow-on spill motion, which has been the typical outcome for spill votes ever since the ‘strike’ rules were introduced almost two decades ago.
Paradigm shares fell 3% 22.3 cents and Noxopharm shares were steady at 11 cents.
Speaking of acquisitions, radiopharmacy house Telix Pharmaceuticals (ASX:TLX) hasn’t exactly been a shrinking violet in that regard and today it announced a further deal worth up to $264 million.
The agreement, with two German companies, pertains to licensing and developing imaging and therapy radiopharmacy tech targeting fibroblast activation proteins (FAP).
A sexy new area of research, FAPs are proteins expressed in tumours and they thus have a key role in cancer progression.
The compact, with Germany’s SCV GmbH and Medianeza GmbH, adds several new “clinically validated” imaging and therapeutic assets, with an initial focus on bladder cancer.
Telix pays $11 million up front and $5 million upfront, which is beer money really. A further $215 million is payable if the company achieves certain clinical milestones and a further $33 million subject to commercial milestones.
Several big-ticket FAP-related transactions have taken place, with Merck in October signing a $1.9 billion collab with the UK-based Mestag Therapeutics (targeting inflammatory diseases).
Telix shares eased 1.2% to $22.50.
Today’s big winner on the deal front is Resonance Health (ASX:RHT), which provides MRI-based imaging analysis for functions such as liver iron concentration and liver fat.
Resonance shares soared more than 50% after the company announced that the Indian-headquartered Sun Pharmaceuticals would avail of the company’s services, to support an Australian clinical trial it is undertaking.
The deal is worth $13.77 million of revenue over two years, which is nothing to sneeze at given Resonance turned over $8.6 million in the 2023-24 year.
Still on imaging – and deals – lung scanner 4D Medical (ASX:4DX) has inked a contract with UC San Diego (UCSD) Health, one of the top ten US respiratory hospitals.
The three-year agreement will enable UCSD doctors to use 4DMedical’s portfolio of lung imaging products that enable a more granular, four-dimensional view of the bellows.
While the commercial terms are confidential, 4D notes that UCSD is “recognised in the US for its cutting-edge research and excellence in clinical practice.”
They say that you can’t eat prestige, but this one sounds like a handy morsel for the company as it pursues mega deals with the massive public Veterans’ health networks.
4D shares bounced 7% to 51 cents and Resonance shares were 44% higher at 5.5 cents.
At Stockhead, we tell it as it is. While Paradigm and Recce are Stockhead advertisers, they did not sponsor this article
Health & Biotech
Health & Biotech
Health & Biotech
