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Health & Biotech
Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 24 years, explains what the movers and shakers have been doing in health and gives his ASX Powerplays.
With the spring racing season upon us and Christmas holiday season fast approaching Swedish healthcare company De Faire Medical have developed a capsule that lets you drink without fear of a hangover.
The pre-drinking supplement called Myrkl, but pronounced miracle, changes the way alcohol is digested and is designed to help reduce hangovers before they happen.
According to a media release Myrkl breaks down 70% of alcohol within an hour of consumption and has been shown by independent clinical trials to break down booze effectively in the gut before it reaches the liver.
The company said Myrkl’s trademarked probiotic formula AB001 is the result of 30 years of research and development and contains high-performing bacteria enriched with L-Cysteine1 and Vitamin B12.
AB001 converts alcohol into water and carbon dioxide instead of the acetaldehyde and acetic acid that cause hangover symptoms after you drink effectively kicking out the bad guys from your body.
And its a bit of a case of needing a probiotic pick me up for the sluggish ASX health sector along with markets in general this week. By 2:45pm (AEST) on Friday the S&P/ASX 200 healthcare index (ASX:XHJ) was down 2.56% in the past five days, while the S&P/ASX 200 (ASX:XJO) was faring slightly better but still down ~1.12%.
Power said there are a few companies coming to the market to raise money and sure up capital for the next 12 or 24 months.
Clinical stage drug development company Pharmaxis Ltd (ASX:PXS) has raised $10 million in a placement from institutions.
PXS this week announced positive interim analysis of data from six patients who have completed six months’ treatment with PXS-5505 in its open label phase 2 clinical trial in patients with the bone marrow cancer myelofibrosis.
The phase 2 trial known as MF-101 was cleared by the US Food and and Drug Administration (FDA) under the Investigational New Drug (IND) scheme.
The trial aims to demonstrate that PXS-5505, the lead asset in Pharmaxis’ drug discovery pipeline, is safe and effective as a monotherapy in myelofibrosis patients who are intolerant, unresponsive or ineligible for treatment with approved JAK inhibitor drugs.
PXS said PXS-5505 continues to exhibit an excellent safety profile with encouraging signs of clinical activity in patients’ ineligible for a JAK inhibitor.
There are now 15 out of 24 patients recruited with full recruitment expected by year end and results in Q3 2023.
Morgans was the joint lead manager for the placement. Funds raised will be used to advance the current clinical study in myelofibrosis as well as its other clinical studies that are open or due to start shortly in scarring, liver cancer and Parkinson’s disease, along with for general working capital.
“Pharmaxis is an example of money starting to come back into the market and it’s not easy to find with companies having to be fairly sharp with their pricing if they want to attract people in usually at a discount,” Power said.
We are now in the midst of ASX quarterly reporting season with Power saying the market is looking for next data points on companies.
“We’re looking for companies with information that is going to give us some real guide posts on how they are travelling in what is still a pretty uncertain macro picture,” Power said.
Australian healthcare giant CSL (ASX:CSL) held an investor briefing this week highlighting the strategy R&D pipeline and commercial activity of its ~US$12 billion acquisition of Swiss based Vifor Pharma, a global specialty pharmaceuticals company in the treatment areas of iron deficiency, dialysis and nephrology.
Morgans said CSL management remains extremely confident in its ability to drive long-term sustainable growth by better leveraging a much more diversified product portfolio and deeper pipeline.
Notably management targets a greater than 10% revenue growth across Vifor over the medium term and reiterated profit accretion (low to mid teens, ex-amortisation and one off costs) including $75 million in cost synergies over the first three years.
Morgans has reduced its 12-month target price for CSL from $321.30 to $312.20.
The Telix share price has rallied ~26% this week after announcing its Q3 FY22 results showing sales of $53.7m (US$36.4m) in its second quarter of first commercial sales for its prostate cancer imaging agent Illuccix.
A radiopharmaceutical cold kit for the preparation of 68Ga-PSMA-11 injection, Illuccix is used for prostate cancer imaging using Positron Emission Tomography (PET).
Sales for the quarter were up 178% since launch. Overall Telix reported total revenue for the quarter of $55.3m, up 168% from Q2 2022.
Telix informed the market 179 pharmacies are routinely dispensing Illuccix across the US and Puerto Rico, and the reimbursement program is beginning to impact sales positively.
The company has a cash balance of $117.1m as of September 30.
“There were some really good numbers coming through from Telix and it’s a company transitioning very quickly to generating significant revenue so conceptually we like it,” Power said.
Morgans said the consensus (7 brokers) 12 month target price for Telix is now $9.24.
Medical software technology company ImpediMed (ASX:IPD) has released its Q1 FY23 results, which were in line with expectations. Results included a record quarter of $2.9m total revenue, up 10% YoY with growth in core business metrics.
IPD recorded record results for patient tests including 47,000+ quarterly tests equating to a 28% YoY increase. There was a 34% increase in YoY growth in core SaaS fees and 38% increase in average monthly license fees on US contract renewals.
The company reported a sound financial position, with $34.9 million cash on hand and 10+ quarters of operating cashflow.
Headquartered in Brisbane with US and European operations, ImpediMed focuses on non-invasively measures, monitors and manages fluid status and tissue composition using bioimpedance spectroscopy (BIS).
Power said BIS has implications for a range of diseases with IPD initially focused on lymphedema in patients following breast cancer treatment.
“The interesting thing with ImpediMed is there is a key catalyst coming which is something investors have been waiting for over five years,” Power said.
“They’ve run a big clinical study for their technology and its been peer reviewed and what they’re trying to do is getting the guidelines changed to make their product standard of care,” he said.
IPD is awaiting the outcome of a meeting with National Comprehensive Cancer Network in the US, which sets the guidelines for care.
“If the meeting is positive they will update their standards which is very important for getting the private payers like insurers to come on board and where the revenue can really start to ramp up,” Power said.
IPD earlier this month announced it had signed a global strategic commercial partnership and pilot program with GenesisCare.
The pilot program will consist of an initial rollout of 5 SOZO units to establish lymphoedema screening services for breast cancer patients in centres across the US.
The IPD share price is up ~3% in the past five days but has felt the pressure of selldowns across the sector and markets more in generally ad is down ~58% year to date.
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