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.

Theme of the week

Healthcare finished the week down 3%, compared to the broader market which fell by 1%.

As we enter July, the theme over the coming weeks will be the release of quarterly results. Power expects price movements for the health sector during this period to be dictated by these results.

In stocks, Power says that Nanosonics (ASX:NAN) has now come into play after a broker downgrade from Goldman Sachs that sent its price tumbling by 10% this week to $5.07.

“Morgans’ thesis on Nanosonics still remains intact. We believe their investment in R&D will pay dividends over the coming years,” Power told Stockhead.

“We also believe the market is short-sighted and has become a little frustrated with the pace of products coming through the pipeline for NAN, and that’s the reason for the downgrade.”

NAN recently launched a new digital platform, AuditPro, offering digital traceability, reporting and compliance providing a new revenue stream which Power thinks has good potential.

Morgans has an ‘Add’ recommendation on the stock with a price target of $6.57 in 12 months.

Significant healthcare announcements this week

Opthea (ASX:OPT) -0.80% this week

The retinal disease-focused company announced that the US FDA has granted Fast Track designation for its drug, OPT-302, a therapy for the treatment of patients with neovascular (wet) age-related macular degeneration.

Lumos Diagnostics (ASX:LDX) flat

Lumos made its ASX debut on Monday, after raising $63 million at $1.25 a share in the IPO round, and has now come back to trade at its issue price.

Lumos has two primary products in FebriDx (a finger-prick blood test which indicates if a person has a general bacterial or viral acute respiratory infection within 10 minutes), and CoviDx (an antigen test for COVID-19).

“The IPO proves there’s still capital out there looking for smart stocks,” Power said.

CogState (ASX:CGS) -4%

The medtech company has reported record clinical trial sales contracts for FY21, up by 14.8% on prior corresponding period (pcp) to $41.3 million. This was underpinned by a strong June quarter, which saw $11.4 million in contracts executed.

“They’re benefitting from the renewed interest in Alzheimer’s research after the Biogen approval in the US,” Power told Stockhead.

“Since the Biogen news, there has been a real resurgence in these companies.”

Medlab Clinical (ASX:MDC) -3%

The company announced that it has undertaken a depression study with the Queensland University of Technology (QUT) for its NRGBiotic patented product.

The outcomes showed using Medlab’s NRGBiotic patented formula with an anti- depressant is significantly more effective than taking the anti-depressant alone.

ScoPo’s Powerplay

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

Neuren has received guidance from the FDA regarding the Phase 2 clinical trials of NNZ‐2591 to treat Phelan‐McDermid, Angelman, and Pitt Hopkins syndromes.

The FDA guidance is an important milestone that enables Neuren to proceed with preparing an Investigational New Drug (IND) applications for clearance to start the trials.  Subject to that clearance, the trials will commence as planned in H2 FY21.

“This trial is being funded by a large pharmaceutical company in the US called Arcadia,” Power said.

“We only have a desk note (no formal coverage) on this stock, but it’s looking really interesting with this latest announcement.”


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.