ASX health stocks finished the week up but it was a struggle. Pic: Getty Images
Health & Biotech
Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 27 years, explains what the movers and shakers have been doing in health and gives his ASX Powerplay.
Nine in ten tradies experienced a work-related injury in the past year, and half report living with severe pain, according to the 2024 Tradies National Health Month Survey by the Australian Physiotherapy Association (APA).
Released ahead of Tradies National Health Month in August the survey revealed one in four fearing early retirement due to bodily stress.
The survey reveals disparities in pain severity, with female tradies more likely to report severe pain. Millennials are most prone to severe injuries, highlighting the need for targeted interventions for younger workers.
APA occupational health physiotherapist Lucia Tsui says the survey shows an urgent need for accessible pain management and preventive strategies for the heavily impacted sector.
“Pain affects every aspect of a person’s life, from playing with your kids, to your mood, sleep and even sex life – this is heavily reflected in the survey,” she says.
One in two tradies report that the skills shortage negatively impacts their mental health, which in turn affects their physical health.
The survey found 87% of tradies medicate or self-medicate to manage pain, with 30% resorting to drugs or alcohol.
Tsui says employers have a responsibility to their workers and providing access to physiotherapy and mental health services are crucial for ensuring a healthier, more productive workforce.
“Unfortunately, only 35 per cent of tradies felt their employers understood or supported them with their health issues,” she says.
Tradies National Health Month, held every August, was established by the APA to highlight physiotherapists’ role in preventing and treating the musculoskeletal issues that plague tradies throughout their careers.
ASX healthcare stocks have finished the week up after experiencing some pain in what was a volatile week for global markets. The S&P/ASX 200 Health Care Index (ASX:XHJ) regained ground on Friday in line with broader markets.
On Friday at 1.25pm (AEST) the XHJ was up 0.74 for the past five days while the benchmark S&P/ASX 200 (ASX:XJO) fell 0.49% for the same period.
“It has been a fairly lacklustre week so far with the market dominated by US election news,” Power says.
“There has been quite a few capital raises announced this week so that trend is continuing and suggests there is still some good money out there.”
Among companies to announce a capital raise this week are LTR Pharma (ASX:LTP), PharmAust (ASX:PAA) and Anteris Technologies – AVR.
Quarterly results season has also kicked off this week.
Wound care company PolyNovo (ASX:PNV) has provided indicative trading results for FY24 with total revenue including from the Biomedical Advanced Research and Development Authority (BARDA), of $104.8m up 57.5% on the same period last year and in line with Morgans’ expectations.
“If you look forward to the next couple of years, consensus has Polynovo sales growing at greater than 25% per annum so they’re in a growth phase which is attracting a lot of investor attention,” Power says.
FY24 sales of A$92m up 54.5% on pcp with strong growth in US sales of $68.7m up 49% on pcp.
The company says ROW sales were $23.3 up by 73.1% on pcp including strong performances in developed markets like UKI, Germany, Australia and New Zealand.
Chairman David Williams says there were many highlights from the past financial year, with the first the amount of organic growth.
“A second is the strength of the UKI market from a slow start in non-burns” he says.
“A third is the enormous need for our product in conflict zones and developing countries supported by WHO, Charities
and governments.”
ARX will disclose audited FY24 results on August 23. Morgans maintains an add rating for PNV, upgrading its 12-month target price earlier this month before the latest results from $2.22 to $2.50 per share.
Power says another wound care company Aroa Biosurgery (ASX:ARX) has also reported strong quarterly results this week.
ARX, which goes under the New Zealand financial year, reported net operating cash outflow of NZ$3.6m for Q1 FY25, which Powers says was better than Morgans expected.
“Seasonally, it was a weaker period so there was a cash outflow but the actual cash receipts was positive,” Power says.
The company has indicated H2 FY25 is expected to be operating cashflow positive with FY25 normalised EBITDA profit guidance maintained at NZ$2-6m.
ARX has reconfirmed FY25 revenue guidance of NZ$80-87m, representing 21-32% constant currency growth on FY24.
Power says key catalysts for ARX include publication of clinical data across a range of procedures and release of Q2 FY24 results in August from its US distribution partner Nasdaq-listed TELA Bio, where the market will look to confirm that revenue growth of +30% remains on target.
“A focus on clinical development work which is getting published will help with adoption of their products,” he says.
“Like Polynovo the sales growth consensus is around about 25% per annum so again they’re in that growth phase and given the share price has been weak for well over 12 months it feels like Aroa has turned around.”
Morgans has maintained its add recommendation and 12-month target price of $1.05 for ARX.
Microba Life Sciences (ASX:MAP), which has technology for measuring the gut microbiome, has released its Q4 FY24, which included record sales growth in Australia.
Power says highlights of the results included unaudited revenue up 20% quarter-on-quarter (Q-on-Q) and 113% year-on-year (Y-on-Y) to $4.8m.
Other highlights include:
MAP achieved record growth for its gastrointestinal disorder test, MetaXplore, in Australia with 1,835 tests sold during Q4 FY24, up 71% Q-on-Q. There were 414 ordering clinicians in Q4, up 41% Q-on-Q.
MAP says Invivo Clinical met its acquisition expectations within the first six months of ownership with $2.21m in sales for Q4 FY24, and $4.45m in sales for H2 FY24.
The company says MetaPanel sales continued to build across all major states through the Sonic Healthcare (ASX:SHL) network.
CEO Dr Luke Reid says MAP’s therapeutic development programs continue to significantly advance with completion of the autoimmune microbiome discovery program which has yielded new therapeutic intellectual property assets
Pre-clinical package and supporting patient data resources for its immuno-oncology leads also continue to grow. The company is also preparing MAP 315 for a Phase 2 clinical trial to demonstrate clinical efficacy.
Morgans has a speculative buy rating and 12-month target price of 35 cents/share on MAP.
Biotech developing novel therapeutics to reduce brain tissue death after stroke Argenica Therapeutics (ASX:AGN) says its Phase 2 clinical trial in acute ischaemic stroke (AIS) patients is progressing well.
The company says eight out of the 10 participating hospitals have been activated, with the remaining two expected to join later this month.
By August, all hospitals will be fully activated. The independent Data Safety Monitoring Board will review safety data once 23 patients have been dosed, expected in coming weeks.
AGN says patient recruitment remains on schedule to dose all 92 participants by the end of 2025 as planned.
“That was a good announcement from Argencia,” Power says.
EM Vision Medical Devices (ASX:EMV) has announced the fabrication of its First Responder (Gen 2) Proof of Concept device has been completed.
EMC says the First Responder device, designed to go into an ambulance, represents an opportunity to fundamentally transform stroke and traumatic brain injury outcomes for all patients, regardless of their location, by delivering sophisticated neurodiagnostic technology directly to the point of care.
The proof-of-concept device leverages the principles and mode of operation of EMV’s bedside emu brain scanner device.
EMC says it is a lighter and miniaturised physical embodiment with expanded antennas (28), designed to provide full brain coverage in a single scan.
The device will now be subject of a series of studies and developments including usability, reliability, software development, functionality and other tests intended to meet international regulatory requirements.
Adelaide-based cold cathode X-ray machine manufacturer for health and security markets globally Micro-X (ASX:MX1) is due to report its Q4 FY24 result next week.
MX1 is working to advance X-ray technology, introducing the first product with an electronic X-ray tube using a cold electron source, rather than the traditional heated filament.
Controlled by a small voltage and patented carbon nanotube technology, MX1’s products are smaller, lighter, more portable, and faster.
This groundbreaking technology offers precise imaging and benefits medical, defense, and security markets. MX1 is developing solutions to protect against explosives, weapons, contraband, narcotics, and other threats.
“We think there second half is going to be much better than their first half,” Power says.
“We might see that share price react positively to that news.”
Morgans has a speculative buy rating on MX1 and a 12-month target price of 21 cents.
At Stockhead, we tell it like it is. While Aroa Biosurgery is a Stockhead advertiser, the company did not sponsor this article.
The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
Health & Biotech
Health & Biotech
Health & Biotech
