ScoPo’s (actually Iain’s) Powerplays: ASX health stocks fall, Neuren’s DAYBUE drug officially rolling out in US
Health & Biotech
Health & Biotech
Morgans healthcare and life sciences expert Scott Power is away this week so his colleague Iain Wilkie is stepping in to explain what the movers and shakers have been doing in health and gives his ASX Powerplays.
How do you feel about getting older? We all age but positive beliefs about getting older may play a role in better cognition, according to a new study.
A study published in JAMA Network Open explored how beliefs about aging influenced recovery from mild cognitive impairment (MCI), which involves increased difficulty in memory and thinking. MCI can increase a person’s risk of developing dementia.
However, in some good news some people recover from mild cognitive impairment but researchers still do not fully understand why this happens.
In a study of 1,716 participants aged 65 or older, researchers measured positive age beliefs using the Philadelphia Geriatric Morale Scale, which measures someone’s attitude toward aging.
Participants with positive age beliefs were more likely to experience cognitive recovery from mild cognitive impairment, and their recovery time was shorter than those with negative age beliefs.
Additionally, those with positive age beliefs had a lower chance of developing mild cognitive impairment over a 12-year follow-up.
The study authors propose that by individuals and societies cultivating positive aging beliefs it can enhance cognitive abilities – maybe those lines forming around my eyes aren’t so bad after all!
And ASX health stock investors could do with a little more positivity this week. At 12pm (AEST) on Friday the S&P/ASX 200 healthcare index (ASX:XHJ) was down 0.32% for the past five days, while the benchmark S&P/ASX 200 (ASX:XJO) was also down 0.37% for the same period.
“It’s a bit of a slower week,” Wilkie said.
“Some quarterlies have started to flow through but next will be the busy period.”
Neuren Pharmaceuticals (ASX:NEU) announced that DAYBUE (trofinetide) is now officially available for the treatment of Rett syndrome in adult and children (2 years of age and older) in the US.
The company and its North American partner Acadia have an exclusive licence agreement for Acadia to develop and commercialise the drug in North America and as part of that agreement, US$40 million is payable to Neuren following the first commercial sale in the US.
The first and only drug approved for Rett Syndrome was granted US Food and Drug Administration (FDA) approval in March. The price of NEU shares have risen more than 71% YTD.
“It was just a matter of time but probably a little earlier than I was expecting,” he said.
“Usually timelines on these things can blow out so it was actually good and Arcadia, which is Neuren’s partner, has a pretty good take on things so the question now is what will be the take-up rate?”
He said Arcadia did some research on doctors who treat Retts with results showing their indicative use rate would be 70% across their patients in the first year.
“It could be pretty rapid so we will see.”
Wilkie said Impedimed (ASX:IPD) quarterly results were in-line with what the market was expecting in terms of the cashflow statement. The stock rose ~20% on Friday.
“IPD reported its Q3 FY23 cashflow report and marked the highest cash receipt quarter for the company to date with receipts of $3.2 million,” he said.
“Net operating outflow was $2.8m with target was A$3m outflow, leaving cash on hand of $21.4 million.”
However, Wilkie said what will be interesting now is response to the US National Comprehensive Cancer Network (NCCN) including bioimpedance spectroscopy (BIS) as part of its new version of guidelines, which was announced at the end of March.
IPD focuses on non-invasively measuring, monitoring, and managing fluid status and tissue composition using BIS medical technology.
The new NCCN guidelines in oncology for survivorship named BIS as an objective measurement tool to identify early signs of lymphoedema.
It has also recommended regular screening for all cancer survivors at risk of lymphoedema, in addition to identifying early signs of lymphoedema via symptom assessment, clinical exam, and, if available, bioimpedance spectroscopy.
The inclusion of BIS in the NCCN guidelines will help establish BIS as standard of care, and will accelerate adoption by US private payors and providers.
“They have a decision to make as to whether they’ll ramp sales efforts up as at the moment they’re the only FDA approved provider which meets the guidelines,” he said.
“We just had a meeting with them, certainly sound very upbeat but pleasingly they’re not just out there beating the drums as loud as they can.”
He said there is a lot of work behind the scenes to still get payors over the line in terms of process so he wouldn’t expect a massive change from this quarter to the next. However, the opportunity is really strong and growing here with the question just how quickly IPD can take advantage.
“There may be a need for real capital to make more units, get more sales people out and integration teams,” he said.
“They have about six sales people at the moment but what they are seeing they may need up to 30 at some point.”
Wilkie said as a result while IPD has continued to forecast ~$3 million outflow in coming quarters, this could change.
“There’s a couple of pathways ahead which haven’t been decided.”
Telix Pharmaceuticals (ASX:TLX) has surged more than 30% this week after the company told the market that revenue for the March quarter was $100.1 million, driven by global sales of its prostate cancer imaging agent called Illuccix.
Demand for Illuccix in the US continues to increase on the back of strong clinical results with sales of $97.5 million, up from $76.8 million in the prior quarter.
“After a bumpy ride over the last 18 months TLX has regained all time highs on impressive first quarter sales result with their first compound for imaging prostate cancer selling more than $100m of sales,” Wilkie said.
He said consensus expectations were for $83m of sales versus $100m delivered with CEO Christian Behrenbruch indicating he expects this trajectory to continue for the rest of the year.
“That’s a fairly robust statement and led to a pretty healthy upward revision of consensus sales expectations,” he said
“Subsequently we saw a good amount of upward revision in the revenue numbers and price targets on the back of that with the mean price target $9.92 before this announcement versus $10.54 now.”
On Twitter @mcgaffen also seems to be a fan of TLX:
— mcgaffen (@mcgaffen) April 20, 2023
But he did sell out with a view of getting back in down the track.
— mcgaffen (@mcgaffen) April 20, 2023
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.