Health Check: Vitura Health swoops on medical dope telehealth platform

Vitura will acquire the private, Queensland-based Candor Medical for $5.9 million cash
Percheron says it will find a new reason for being
The experts place their bets on CSL after yesterday’s mixed results

Medical cannabis platform Vitura Health (ASX:VIT) has expanded its reach in the booming telehealth sector by acquiring the parent company of Queensland-based Candor Medical, for $5.9 million.

Founded by Joel and Dr Lisa Beckett in 2022, Candor is “one of Australia’s leading and best-known medicinal cannabis clinic businesses”.

Candor consults to around 15,000 active patients, “resulting in nearly $30 million in annual medication purchases via pharmacies”.

Vitura is parting with $4 million of cash up front, with the remainder paid over 18 months.

The deal is being funded by a placement to Adelaide-based businessman Prof Khalil (Charlie) Shahin.

Charlie is a son of Fred, a Palestine migrant who was dispossessed during the 1948 Arab-Israel War and went on to found outdoor chain Peregrine Corporation.

The Rich Lister Shahin family has just sold the OTR roadside chain to Viva Energy for $1.2 billion, so there should be no problem coming up with the readies.

Candor generated underlying earnings (ebitda) of $1 million in the 12 months to June 2024, amping up to more than $1 million in the December half just gone.

In the 2023-24 year Vitura posted ebitda of $6.2 million, down 70%.

The financial boost aside, the deal looks a snug one given Vitura already owns the Doctors on Demand telehealth business, CDA Clinics (medical cannabis telehealth) and a medical cannabis online marketplace.

Candor will be integrated with Doctors on Demand, which carries out about 300,000 consultations annually, including for smoking cessation and medicated weight loss.

Along the way, Vitura needs to tread warily because the Therapeutic Goods Administration – and some doctor groups – are on the warpath against the fast-growing medical dope sector.

Elsewhere, the TGA has dished out fines pertaining misleading or illegal promotion of the wonders of the weed.

Vitura shares have lost around 60% of their value over the last 12 months, but choofed up around 7% this morning.

Trust the experts: CSL shares are cheap … or expensive

Following CSL’s (ASX:CSL) curate’s-egg half-year results, the experts reckon that the company is wildly overpriced … or a bargain.

But the overwhelming consensus is the shares should be worth more, which flies in the face of yesterday’s 5% post results sell-off (with further modest losses this morning).

In the naysayers’ camp, Wilsons analyst Dr Shane Storey opines there was a “a lot to like” in the results.

He’s referring to the robust performance of the core Behring plasma division and the surprising resilience of the Vifor iron deficiency/nephrology arm.

But he can’t get over the Seqirus arm’s revenue and earnings slump, the result of plunging flu vaccination rates in the US.

Storey reckons that CSL is “over owned” by local investors and trades at a 43% premium to its global peers. He values the stock at $250-a-share, a 14% haircut on his pre-results valuation of $291.

With Seqirus “catching a cold”, Barrenjoey can manage only $257 per share.

Goldman Sachs values the stock at $3.18, in deference to Behring’s ability to expand margins.

The firm adds that while Seqirus disappointed, other flu vaccine companies have struggled as well.

Bell Potter lowers its valuation from $345 to $335, but the stock remains a comfortable ‘buy’.

“While the declining US flu market has caused headwinds for Seqirus, Behring continues its strong growth outlook and positive margin recovery.”

Morgans goes for $329 a share.

UBS says the slow vaccine sales aside, the stock “looks cheap” on an estimated 2025-26 earnings multiple of 21 times. The firm ascribes a $310 a share valuation.

Most bullish award goes to Macquarie Equities with its $360-a-share target. The firm dubs the result as an overall miss but opines the company is finding its Behrings* on margins.

* Their pun – don’t blame your columnist.

Percheron partnering efforts make ‘rapid progress’

Following the abysmal failure of its Duchenne muscular disease trial, Percheron Therapeutics (ASX:PER) hopes to pick up another clinical program sooner rather than later – probably in the familiar rare diseases sector.

Management says last month’s JP Morgan Healthcare Conference generated more than 50 leads.

“The company has been triaging these opportunities to select the most promising programs for detailed technical evaluation, with a number of opportunities already the subject of confidential discussions.”

Not surprisingly, the focus has been on clinical or late-preclinical programs, rather than early discovery-stage stuff.

Percheron hopes to submit initial non-binding proposals to one or more potential partners by the end of the month.

As of the end of December, Percheron had $17 million of cash, albeit with some pending costs of winding up the trial.

The company is also evaluating “several broader strategic partnering opportunities” which would change its business model more substantially.

“We are certain that a new narrative is needed to attract investors back to the company,” CEO Dr James Garner says.

Shareholders should have much to talk about when they convene on March 4, to vote on a motion to remove Garner and chairman Dr Charmaine Gittleson from the board.