ScoPo’s Powerplays: Investors look to Healthcare for ESG exposure, and Volpara is the poster child
Health & Biotech
Health & Biotech
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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.
The Healthcare (XHJ) index is up 2% over the past week, but the expected bigger rally into Christmas hasn’t played out so far.
The sector in general ticks a lot of the ESG boxes, according to Power.
Being a sector that uses a lot of energy, it plays an important role in the decarbonisation transition.
And in this regard, ASX-listed company Volpara Health Tech (ASX:VHT) leads from the front.
“Volpara’s business is capital light, meaning their carbon footprint is very low,” Power told Stockhead.
“And when you look at Volpara’s women representation across their management and board seats, it’s very good.”
“Volpara is really the poster child in Healthcare when it comes to ESG,” Power continued.
The company focuses on the early detection of breast cancer by improving the quality of screening using artificial intelligence.
Morgans are bullish on Volpara, recently retaining an Add rating and $1.87 price target on the company’s shares.
Morgans believes the company is delivering in all aspects of the business, and its revenue guidance of NZ$25 million in FY 2022 is conservative.
VHT is trading at $1.05 at the time of writing.
There is still a lot of money circulating in Healthcare, as Thursday’s IPO listing of Tissue Repair Ltd (ASX:TRP) has shown.
Morgans was the lead manager in the IPO round, where TRP raised $22m for a market cap of just under $70m.
“The majority of the IPO funds will be set aside to fund a Phase 3 clinical trial in venous leg ulcers and chronic wounds,” Power said.
Unfortunately the stock didn’t find much demand on day one, falling by around 40% on debut.
Pharmaxis (ASX:PXS) is also another company that has tapped investors for fresh funds. The company raised $9.2m to support the next phase of its trials on anti-cancer drug PXS-5505.
“PXS-5505 already has clinical trials underway in liver cancer and bone marrow cancer, and it wants to extend this to potentially other cancers,” Power said.
Immutep (ASX:IMM) dropped 3.5% despite receiving a Chinese patent for efti, its LAG-3 related immunotherapy treatment for cancer.
“But more importantly, they presented the results of the study on LAG-3 immunotherapy, which seems to show a clinical potential,” Power said.
And this week, it reported positive results from its Phase 3 trial in chronic heart failure patients.
The company had a solid 2020 off the back of ASX shareholder hype over a clinical trial testing the use of another one of its stem-cell infusions – remestemcel-L – on severely ailing US COVID-19 patients.
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