Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 25 years, explains what the movers and shakers have been doing in health and gives his ASX powerplays.

Theme of the week

At the time of writing, the ASX 200 Health Index (XHJ) is up by 0.16% for the week, compared to the broader index which is up by 0.40%.

“We’ve been getting ourselves ready for what’s traditionally a Christmas rally, but it just feels quite lacklustre at the moment,” Power told Stockhead.

“Healthcare has been reasonably strong, but it’s really been driven by the share price movement in CSL (ASX:CSL), which makes up the bulk of the index.”

“But if we look at the names that I’ve been talking about over the last few weeks, there hasn’t been a lot of conviction coming through in terms of buying,” he continued.

Quality names that are down for the week include Imugene (ASX:IMU), which is down 10% on profit taking.

Immutep (ASX:IMM) is also down 10% for the week on profit taking, despite announcing patient recruitment for the Phase II TACTI-002 study of its LAG-3 therapy.

Management comments at Nanosonics’ (ASX:NAN) AGM this week meanwhile failed to inspire the market, and the stock price was down by 7%.

“So in summary, the sort of the excitement in the market that we’ve experienced in previous quarters and months, it’s just not there at the moment,” Power said.

Meanwhile, antiviral biotechnology stock Biotron (ASX:BIT) turned heads on the ASX this week, after announcing that its lead drug candidate — BIT225 — had been shown to be effective against COVID-19 in animals.

BIT shares shot higher by more than 60% at Thursday’s opening bell following the update.

The company “is now in discussions with its USA advisors and consultants to expedite progression of BIT225 into human trials for treatment of SARS-CoV-2 infection”, it said this morning.

Power’s ESG insights for the week

“There’s a major radiology conference commencing this week in the US held by the Radiology Society of North America,” Power said.

“This is where a lot of med device companies release new products, software and solutions to be used across hospitals, radiology departments or wherever imaging is required.”

“There’s basically a whole raft of technology, so that in itself has some very strong ESG themes, because it’s all about saving lives, remote monitoring, and early detection of diseases.”

“These companies also mainly have low carbon footprints, as they are in the software business.”

“There’s a number of Australian participants, which include Volpara Health (ASX:VHT), Micro-X (ASX:MX1), Mach7 (ASX:M7T) and Pro Medicus (ASX:PME), and they’re all presenting at this conference.”

ScoPo’s Powerplay

Power’s stock of the week is Neuren Pharma (ASX:NEU).

In September, the brain-focused health company raised $20m in a private placement to accelerate its NNZ-2591 drug towards a Phase 3 clinical trial.

The NNZ-2591 drug is being studied for four neuro-developmental disorders: Prader-Willi, Phelan-McDermid, Angelman and Pitt Hopkins syndromes.

Neuren says positive results from that study would enable its US partner Acadia Pharmaceuticals to submit a New Drug Application (NDA) to the US FDA, and enable the company to engage commercial partners for Europe and Asia in 2022.

Neuren is also developing a drug therapy to treat Rett Syndrome, a serious neurological disorder that emerges in early childhood.

The lead compound being studied is trofinetide, and if an NDA is approved by the FDA and trofinetide is launched in the US for Rett Syndrome, Neuren would earn a revenue of approximately $111 million, plus double-digit percentage royalties on net sales.

“The Neurine share price has been quite weak despite the fact there’s a major inflection point very shortly, which is the readout of their Phase 3 trials in Rett Syndrome,” Power said.

“They told the market that those results are expected out by the end of this year.”

Morgans does not have a research coverage on Neuren at this moment.


Neuren Pharma share price today:



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