• ASX Health sector has ended its upward trend falling 0.7% in the past five days in line with broader markets
  • As the end of 2022 approaches several ASX health stocks announce capital raising results to secure funding
  • Healius announces sales of its Montesserat day hospitals to Nexus Hospitals for up to $138.6 million.

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.

Want to boost your gut biome? According to two new studies, adding peanut and spices to your diet could improve your gut health within four to six weeks.

The studies – one into peanuts and another into herbs and spices  — including cinnamon, ginger, cumin, and turmeric — were published in the Journal of Nutrition.

The found that peanuts, as well as herbs and spices, increased levels of certain gut bacteria after just four to six weeks of adding them to a typical American diet.

They noted that further research is needed to understand their findings’ implications and the possible health benefits of having more gut bacteria.

 To markets….

And ASX healthcare could do with a little improvement this week.  By 2:15pm AEDT on Friday the S&P/ASX 200 healthcare index (ASX:XHJ) was down 0.7% in the past five days, while the S&P/ASX 200 (ASX:XJO) had fallen 1.9%.

“The Christmas rally we were calling seems to have run out of puff now,” Power said.

Capital raising

Power said after a slow year for capital raising for ASX health stocks there has been a bit of movement in December.

Clinical stage pharmaceutical cannabinoid and psychedelics company Incannex Healthcare (ASX:IHL)  has received firm commitments for a ~$13 million share placement at 20.5 cents/share to a small consortium of US and international investors.

IHL said the consortium has significant healthcare experience in providing long term support to emerging healthcare companies in the US, Europe, and Asia.

Wound care company Polynovo (ASX:PNV)  has announced completion of a $30m institutional placement. PNV said the funds will be used to expand the business in the US, Canada, India, and Hong Kong.

PNV recently announced has had its NovoSorb BTM registration approved in the EU and Australian markets which includes treatments for full thickness burns.

The company also launched the product in Canada at the Canadian Burn Conference on 21-23 October.

CannGroup (ASX:CAN) announced its share purchase plan (SPP) raised $8.18 million from 1,254 shareholders.

CAN said proceeds from the SPP will contribute to the company’s strategic investment in expanding GMP manufacturing capabilities at Mildura, in northern Victoria.

CAN said the expansion is in preparation for the scaling up of production which is needed to respond to the expected significant demand for Satipharm products, including over-the-counter CBD products once they become available as registered S3 medicines.

Furthermore, CAN recently said it had positively progressed negotiations with GlaxoSmithKline Consumer Healthcare Australia Pty Ltd (trading as Haleon) on terms relating to the commercialisation of its proprietary Satipharm CBD capsules for over-the-counter (OTC) use.

“There hasn’t been many capital raises through the year but companies still need money and they’re having to discount their prices to attract funds in,” Power said.

“We have seen some strategic investors come in,” he said.

Healius sells its day hospitals

Diagnostics specialist Healius (ASX:HLS) has announced it has entered into a binding agreement to sell Montserrat Day Hospitals, an operator of 11 specialist short-stay hospitals and haematology/oncology clinics to Nexus Hospitals for an enterprise value of up to $138.6 million.

HLS acquired Montserrat in 2018 for $122 million including earn-outs.

HLS managing director and CEO Dr Malcolm Parmenter said the company was pleased with the outcome of the sale process.

“The valuation achieved reflects the quality of the Montserrat business and its long-term growth potential, notwithstanding recent challenging trading conditions during the COVID-19 pandemic.”

Power said he expects to see more strategic investors coming into stocks next year, such as diagnostics giant Sonic Healthcare (ASX:SHL)which is investing $17.8 million to acquire a 19.99% shareholding in gut health company Microba Life Sciences (ASX:MAP). 

Furthermore, SHL is seeking to acquire options for an additional 5% equity position, subject to shareholder approval. Exercise of the options would result in a further investment of $7.5 million in MAP.

“There was an Asian investor come into Audera (ASX:AUA) and I wouldn’t be surprised if there’s corporate activity around Healius now its rarrowed to radiology and pathology,” Power said.

HLS has announced Parmenter was stepping down and the appointment of Maxine Jaquet, the current CFO and COO, to the CEO role effective March  1, 2023.

Dr Parmenter has been CEO since September 2017, and Jaquet joined HLS and its leadership team in 2015. She has been CFO since 2019, and CFO and COO since 2021.

ScoPo’s Powerplay:

Proteomics International Labs (ASX:PIQ) is expecting to also announce a major deal with Sonic before the year’s end similar to Microba.

PIQ is a global leader in proteomics, which is the industrial scale study of the structure and function of proteins. The company has a core analytical services business, which provides specialist contract research, a commercial ready diagnostic for diabetic kidney disease, and another two tests in the pipeline with clinical readout over the next 12 months.

“We are very confident that when they close the deal with Sonic it will be very positive for the share price,” Power said.

“They have a lot of potential and buddying up with a large partner gives them a very good chance of success.”

PIQ announced in November it had secured a patent for its PromarkerD predictive test for diabetic kidney disease in Hong Kong.

The patent joins those already granted for the US, Europe, Australia, Brazil, Canada, China, Indonesia, Russia, Singapore, India and Japan.

The PromarkerD intellectual property portfolio now covers 64% of the global population living with diabetes.

The PIQ share price is up more than 7% this week. Morgans has a 12-month target price of $1.77 on the stock with a speculative buy rating.

PIQ Share price

 

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.