Avita Medical gets another green light from US FDA. Pic: Getty Images
ScoPo’s (actually Wilkie’s) Powerplays: ASX health stocks up as Avita Medical gets US FDA green light
Health & Biotech
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- Avita Medical receives US FDA premarket approval for its RECELL System to treat vitiligo
- Telix will buy UK medical device firm Lightpoint Medical and its radio-guided surgery business SENSEI
- Antisense in strong position with new CEO, former CSL staff and phase IIb trial underway
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.
Around 20% of women who used fertility treatment, like IVF, to have their first child, have a chance of getting pregnant naturally in the future, according to a new University College London study.
The research, published in Human Reproduction, examined data from 11 studies involving over 5,000 women worldwide from 1980 to 2021.
It discovered that at least one in five women conceived naturally within three years after fertility treatment, regardless of the type or outcome of the treatment.
Researchers said the findings are significant because they challenge the perception that natural pregnancy after fertility treatment is rare, emphasising the need for women to be aware of this possibility and to avoid unintended pregnancies that could impact both the mother’s and child’s well-being.
To markets…
… and ASX health stocks, which are giving off positive results this week compared to broader markets. At 12:45pm (AEST) on Friday the S&P/ASX 200 healthcare index (ASX:XHJ) was up 0.40% for the past five days, while the benchmark S&P/ASX 200 (ASX:XJO) fell 1.79% for the same period.
“Healthcare stocks beat the broader market with index heavyweight CSL paring back some of last week’s losses following its consensus tempering due to FX,” Wilkie said.
In a market update issued last week CSL (ASX:CSL) said it expects a negative foreign currency impact of ~US$230 million to $250 million, up from US$175 million anticipated at the time of the half-year result.
“The week started off well but deteriorated throughout the week with overseas leads taking a breather from the recent rally,” Wilkie said.
Avita gets the green light on Vitiligo
Avita Medical (ASX:AVH), a regenerative medicine company focusing on skin restoration, has received US FDA Premarket Approval (PMA) of its RECELL System for treatment of vitiligo.
RECELL has now become the first FDA-approved therapeutic device offering a one-time treatment at the point-of-care. Using the device, a clinician can deliver autologous skin cells from pigmented skin to stable depigmented areas, offering a safe and effective treatment for vitiligo, which affects up to 2% of the population worldwide.
The FDA also recently signed off on a PMA for the use of RECELL to treat full-thickness skin defects. The RECELL System was first approved in the US for treatment of severe burns in 2018.
It’s an autologous cell-harvesting device that prepares, produces, and delivers a regenerative cell suspension, Spray-On Skin Cells, using a small amount of a patient’s own skin.
Despite this week’s approval for vitiligo the AVH share price remains volatile and has dropped more than 5% in the past five days.
“We just view this as trading profits from the last month or so just washing through,” Wilkie said.
“Happy to just sit on my hands here and see any trading updates over the next quarter or two to get a better feel for how this significantly bigger sales force is doing.
“Management think they’ll get up to breakeven pretty quickly.”
Telix buys UK medical device firm
Telix Pharmaceuticals (ASX:TLX) is up more than 7% this week after announcing it will buy UK medical device firm Lightpoint Medical.
TLX has agreed to buy the company and its radio-guided surgery business SENSEI, which specialises in intra-operative detection of cancer in real time.
“This is an FDA and CE Mark approved device and is the only gamma probe validated for the DaVinci surgical system,” Wilkie said.
The deal includes an upfront equity payment of $20 million, and an additional earn-out payment of $15 million on completion of certain milestones.
The two companies have been collaborating since August 2021 to develop SENSEI for prostate cancer. TLX said the Lightpoint SENSEI business will be integrated into TLX to create a new surgeon-focused business unit.
“There’s been no commentary on what the revenue potential could be but given the wording of the announcement in relation to it being an operational cost, it’s fair to assume its pre-profit although nothing material to the group,” Wilkie said.
TLX has also provided an outline agenda for its briefing session to be held on June 21 in New York City.
TLX said it will focus the session on its vision for the field of urology, the commercialisation of its lead product Illuccix for prostate cancer imaging, and the company’s pipeline in urologic oncology.
AustCo Health announces biggest contract to date
Digital health company Austco Healthcare (ASX:AHC) has announced that its subsidiary in Canada has secured a $7.4m contract, the biggest in the company’s history.
Under the deal, AHC will supply its Tacera alarm management and clinical workflow solution for the new 548-bed landmark St Paul’s Hospital in Vancouver, which is under construction and set to open in 2026.
The contract includes over 1100 full IP patient stations, 1200 clinical workflow terminals, and Webservices interfaces for EMR and RTLS systems integrations set to be installed in the hospital.
These systems will allow critical messages, including medical emergency notifications, to be delivered to application stations installed throughout the facility, ensuring staff are promptly notified and can act quickly.
Two-way audio will connect patients to all healthcare personnel in real-time, improving workflow, driving efficiencies, and reducing risk.
“The deal follows on from another Canadian contract for almost $4 million in late may for a new aged care facility so clearly some strong momentum there, particularly for new builds,” Wilkie said.
He said AHC also recently brought one of its resellers in-house to add another $1 million or so in EBITDA on top of the $4-$5 million it already generates.
“I think what people will be wanting to keep an eye on is the software component which looks to be recurring,” Wilkie said.
“It’s a decent contributor at just under 20% of revenue but that should naturally track up over time as more systems are installed.
“Worth keeping an eye on.”
The CSL, AVH, TLX & AHC share price today:
Wilkie’s powerplay – Antisense, which attracts CSL staff
Wilkie said he caught up with management of biotech Antisense Therapeutics (ASX:ANP) and the company now had a strong line-up of former staff from CSL.
“It’s essentially a new company and loaded with ex-CSL staff now including the board and many of the clinical team,” he said.
“It’s always good to see these movements after having a look under the hood – gives you a little extra confidence.”
He said he is also impressed that former Kazia Therapeutics (ASX:KZA) CEO Dr James Garner has come on as CEO and MD of ANP.
The biotech recently announced recruitment had commenced in its multicentre double-blind, placebo-controlled Phase IIb trial of lead asset ATL1102 in non-ambulant boys with Duchenne muscular dystrophy (DMD).
ANP said the first participant had been randomised and dosed with ATL1102 or Placebo in Turkey.
“We’ve always liked the asset for DMD and they recently dosed the first of 45 boys in the Phase IIb trial so we’ll have newsflow on enrolment coming through as well as some combination study results,” Wilkie said.
The Phase IIb readout is due in mid 2024.
“Yes this one is potentially binary but the upside is multiples from here on success – which we will know in the next 12 to 18 months.
“I like to think of this one as the next Neuren (ASX:NEU).”
Morgans currently have a 12-month price target of 26 cents on ANP with a speculative buy rating. The share price has dropped 40% YTD.
“It’s gone backwards in terms of share price but I don’t think the market has met the team in full yet,” Wilkie said.
“It’s hard to convince CSL scientists to jump ship to a $50m micro-cap,” he said.
The ANP share price today:
Disclosure: The author held shares in CSL at the time of writing this article
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.
