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

Going into Christmas, Power believes the broader market will be dictated by our ability to contain the Omicron strain.

“There are really three questions to ask about this new strain – how contagious is it, what’s the mortality rate, and are the current vaccines effective?” Power told Stockhead.

“I think the World Health Organization will release commentary around how contagious it is pretty soon, and there’s suggestions they’re going to come out and say it’s pretty mild, so that will help the markets.

“But I believe the bigger picture into Christmas is that we’re going to see a rollercoaster due to this uncertainty.”

At the corporate level, Power said the biggest news for the week was that of IDT Australia (ASX:IDT), which saw its stock price rise by more than 30%.

On Tuesday, IDT announced it has successfully manufactured Australia’s first mRNA COVID-19 vaccine candidate.

The company said it has met all specifications and will provide the drugs to the Monash Institute of Pharmaceutical Sciences (MIPS), as part of its mRNA COVID-19 receptor binding domain vaccine clinical trial.


IDT share price:


Healthcare IPOs losing steam

Two recent ASX healthcare IPO stocks are currently trading massively below their IPO listing prices.

Radiopharm Theranostics (ASX:RAD), which is the latest venture of biotech entrepreneur Paul Hopper, is down 40% from its listing price of 60c (now trading at 35c).

The company is targeting some of the largest markets in cancer with its radiopharmaceuticals drugs that can either act as a diagnostic or therapeutic.

Biome Australia (ASX:BIO) also listed earlier this week, and its share price has plunged from the 20c initial listing price to 12c today.

Biome is a microbiome health company that licences and develops complementary medicines, including nutraceuticals (food-based vitamins and weight management products) and live biotherapeutics (probiotics).

“I just feel the whole capital raising market is exhausted and needs a breather at the moment,” Power said.

“But I do want to make the point that once confidence returns, we’ll see things regain an upward momentum on that front next year,” he added.


Power’s ESG insights for the week

For this week’s ESG stock, Power points to Nanosonics (ASX:NAN).

“Nanosonics is a really good example of a company that will attract more investors that are focused on ESG,” he said.

He pointed to NAN’s continued commitment to sustainability and social responsibilty.

The company has successfully developed and commercialised a unique automated disinfection technology, which was the first major innovation in disinfection for ultrasound probes in more than 20 years.

Alongside that effort, it has made good progress in reducing its carbon footprint, with 17% of its energy consumption now coming from renewable sources.

NAN has also created a diversified workforce, with a 41% female ratio and 29 nationalities represented.

“They tick most of the ESG boxes,” said Power.

“And if we flip back to our valuation and commercial metrics, they’re really benefiting from the improving COVID situation in the US, so you’ll see them perform well over the coming period.”

ScoPo’s Powerplay

Power is sticking with Neuren Pharma (ASX:NEU) as his stock of the week.

“There is a big key inflection point coming up with Neuren, which is their Phase 3 trials results in Rett Syndrome, which they said will be announced before year end,” Power said.

Neuren is 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 Neuren share price has been quite weak despite the fact there’s a major inflection point very shortly, so we see some value in them.”

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




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