ScoPo's Powerplays: ASX health stocks rise, ImpediMed surges 99% on NCCN guidelines update

ASX health stocks rise 0.97% in the past five days in line with broader markets
Impedimed up 99% after BIS tech named in latest US NCCN guidelines for lymphoedema
EBR Systems to release top line results at cardiac conference Heart Rhythm 2023 in May

Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 26 years, explains what the movers and shakers have been doing in health and gives his ASX Powerplays.

How long will a cancer patient survive? It turns out artificial intelligence (AI) can predict a patient’s survival time by reading the oncologist’s initial consultation report.

University of British Columbia (UBC) in Canada have demonstrated for the first time that natural language processing, a form of machine learning analysing language in documents, was more than 80% accurate at predicting 6-month, 36-month, and 60-month survival.

The study was published in JAMA Network Open with an article in Medscape.

The researchers collated records of 47,625 patients who started care in one of BC Cancer’s six centres from April 2011 to December 2016 with all patients having a medical- or radiation-oncologist consultation report dated within 180 days of diagnosis.

First author John-Jose Nunez, MD, a psychiatrist and clinical research fellow at the UBC Mood Disorders Centre and BC Cancer in Vancouver, said the reports were in English, generated by dictation, consisted of simple paragraphs with headings, and BC Cancer’s standard format for initial consultation notes.

The researchers fed the reports into four different algorithms developed by AI researchers over the past 15 years.

Based on wording in the oncologists’ reports, all four language-processing models predicted with more than 80% accuracy.

The authors said typically, AI applications in cancer require data from structured databases and many are specific to one particular cancer but their new approach transcends both.

“Our findings suggest that a clinically useful survival prediction model for patients with general cancer may be possible without needing specific models for different cancer types and by using data that are readily accessible without complex data processing or data mining,” the authors said in their conclusion.

To markets…

And it seems popular AI chatbot ChatGPT is not yet able to predict stock winners from the latest banking crisis according to a NASDAQ article so at Stockhead we will just keep asking the experts for their analysis.

At 1:45pm (AEST) on Friday the S&P/ASX 200 healthcare index (ASX:XHJ) was up 0.94% for the past five days, while the benchmark S&P/ASX 200 (ASX:XJO) rose 2.97% for the same period.

“We have a backdrop of markets which are fairly cautious at the moment but in amongst that we’ve had two significant events,” Power said.

The events Power are referring to include recent FDA approval for Neuren Phamaceuticals (ASX:NEU) along with good news for ImpediMed (ASX:IPD) (see below).

Impedimed up 99% after BIS tech named in latest US guidelines

IPD surged ~99% this week after announcing that the US National Comprehensive Cancer Network (NCCN) has included bioimpedance spectroscopy (BIS) as part of its new version of guidelines.

IPD focuses on non-invasively measuring, monitoring, and managing fluid status and tissue composition using bioimpedance spectroscopy (BIS) medical technology.

The new NCCN guidelines in oncology for survivorship named bioimpedance spectroscopy (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.

Power said the inclusion of BIS in the NCCN guidelines will now help establish BIS as standard of care, and will accelerate adoption by US private payors and providers.

“We have been waiting for this for five years and it’s been a long time coming – hooray,” he said.

“They ran a very expensive five-year trial, which had to be peer reviewed, published and submitted.

“Having said that now ImpediMed is in a very strong position to grow the business rapidly.”

Power said he was pleasantly surprised with the wording change to extend to all cancer survivors, rather than breast cancer survivors only.

Morgans maintains a speculative buy on IPD with a 12-month target price of $1.82, up from $1.81.

April means quarterlies – Watch Avita Medical

April means quarterly reporting season for the ASX and Power said there are two stocks worth noting. First up is regenerative medicine and wound care and company Avita Medical (ASX:AVH).

Power said recently appointed CEO Jim Corbett has provided guidance revenue of US$50m for CY23 and quarterly guidance is for revenue of US$10 to US$11 million, up 40% at mid-point.

Its approved device known as the RECELL System is targeting mainly the acute burns market in the US which is estimated at US$600 million.

Power said key short-term catalysts for AVH are FDA approvals for the RECELL System for soft tissue repair and vitiligo indications which are expected in June 2023.

AVH has said approval potentially expands the target market to US$1 billion and US$5.2 billion respectively.

“A positive result on either or both will result in a rapid re-rate of the share price,” Power said.

“We have assumed a modest revenue contribution from both indications ~20% in CY24.”

Leading Australian burns doctor Professor Fiona Woods, a Perth-based plastic surgeon, was a founder of AVH, which developed her patented spray-on skin technology. It changed its name from Clinical Cell Culture in 2008.

Morgans has an add rating and 12-month target price of $4.45 on AVH.

Also watch Aroa Biosurgery

Another wound care companyAroa Biosurgery (ASX:ARX) has provided full year guidance of $60 to $62 million.

“They have a March year-end so at the end of April they’ll be telling us if they’ve hit their guidance and we think they will,” Power said.

ARX is a soft tissue regenerative company targeting diabetic foot ulcers, venous ulcers, trauma, breast reconstruction and hernia repair. Power said the addressable market estimated by Frost and Sullivan is US$1.5 billion.

“These are two near-term catalysts which, if achieved, will be positive for the share price,” Power said.

ARX is awaiting a decision from the FDA on the required regulatory pathway for new product Enivo, a new tissue apposition system designed to close tissue cavities at a surgical site created by surgical dissection or tissue removal.

“Not only are we going to get some numbers this reporting season but there are some significant catalysts pending.”

EBR Systems to release top line results at cardiac conference

Medical device company EBR Systems (ASX:EBR), which is developing the world’s first and only inside-the-heart system for heart failure, has announced the acceptance of its pivotal SOLVE-CRT (SOLVE) trial abstract at Heart Rhythm 2023, which will be held in New Orleans, in the US in May.

Heart Rhythm 2023 is the Heart Rhythm Society’s (HRS) annual meeting and the premier global electrophysiology conference, attracting the largest gathering of heart rhythm professionals globally.

The abstract presentation, titled Safety and Efficacy of a Leadless Ultrasound-Based Cardiac Resynchronization Pacing System in Heart Failure – Results from the SOLVE-CRT Study, will be presented in the Late Breaking Clinical Trials session on on May 21, (May 22 AEST) by co-principal investigator Dr Jagmeet P. Singh.

The abstract was submitted without any outcomes as the data is still being analysed. Power said acceptance of the abstract requires an embargo on all SOLVE clinical data until 6am EDT the day of the abstract presentation.

As such, EBR expects to make an announcement on the data and hold a webinar to discuss the data and results, on Monday, 22 May 2023 (AEST).

“It will be significant for EBR,” Power said.

Morgans has a speculative Buy rating on EBR and target price of 96 cents.

The IPD, AVH, ARX & EBR share price today:

ScoPo’s Powerplay –

Predictive diagnostics and bio-analytical services Proteomics International Laboratories (ASX:PIQ) is Power’s stock of the week having lifted more than 6% after announcing promising results for a potential new blood test for diagnosing endometriosis, a common and painful disease affecting 1-in-9 women and girls.

The test is based on a simple blood test which measures the concentration of 14 biomarkers in the blood that are associated with endometriosis could provide early screening to rule in or rule out the need for invasive surgery in women presenting with symptoms.

Also of high interest is that the biomarkers also change in concentration as the severity of the conditions change.

The results were presented at the 70th Annual Meeting of the International Society for Reproductive Investigation. Results showed a high degree of both sensitivity and specificity in two different test versions with symptomatic control in no endometriosis vs moderate/severe and healthy controls vs severe.

But Power said the big catalyst coming up for PIQ is an expected deal with Sonic Healthcare (ASX:SHL) to use their PromarkerD test for diabetic kidney disease in their US labs.

The CPT PLA (Proprietary Laboratory Analyses) code has been issued by the American Medical Association, and was a key approval in getting reimbursement coverage of the PromarkerD test by both Medicare and private health insurers in America.

“That will be big news when it finally lands and should not be too far away,” Power said.

Morgans has a speculative Buy rating on PIQ with a 12-month target price of $1.77.

The PIQ share price today:

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.