• ASX health sector fall in line with broader markets as macroeconomic factors create uncertainty
  • Clinuvel down as its European label expansion of SCENESSE knocked back pending further data
  • 2023 biotech market darling elevated to the S&P ASX 200 in September rebalancing, up 

Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 26 years, explains what the movers and shakers have been doing in health and gives his ASX Powerplay.

Are you getting enough sleep?  In a recent study in the American Chemical Society Journal of Proteome Research, a team working with mice identified a protective protein that decreases with sleep deprivation, leading to neuronal death.

Insufficient sleep can cause neurological damage in the hippocampus, which is crucial for memory and learning.  Although previous studies have identified factors linking sleep loss to brain damage, their impact on cognitive function in larger animal populations has not been consistently confirmed.

In the latest research scientists assessed performance of mice in a basic maze and their ability to recognise new objects after subjecting them to a two-day sleep deprivation.

They then analysed the proteins in the hippocampus of these mice, identifying changes in protein abundance. To further narrow down their findings, they examined data linking these proteins to maze performance in related strains of mice that had not experienced sleep deprivation.

Researchers were able to identify pleiotrophin (PTN), which showed a decrease in the sleep-deprived mice. By analysing RNA, the team uncovered the molecular pathway through which the reduction of PTN leads to the death of hippocampal cells.

Human genetic studies also revealed PTN’s involvement in Alzheimer’s and other neurodegenerative diseases. According to the researchers, the latest study suggests that PTN levels could potentially serve as an indicator of cognitive impairment resulting from insomnia.


To markets…

And the ASX healthcare sector is looking like it could do with some rest this week, running out of puff after a mini rally last week. At 1pm (AEST) on Friday the S&P/ASX 200 Healthcare index (ASX:XHJ) was down 0.55% for the past five days, while the benchmark S&P/ASX 200 (ASX:XJO) fell 1.25% for the same period.

“Seasonally September is a weak month and we have the weakness in China and higher interest rates creating that macro uncertainty,” Power says.

“As a result we have a lot of the healthcare names drifting down.”


Feedback on Polynovo products positive

Power says Morgans has initiated coverage of medical devices company PolyNovo (ASX:PNV).  The company specialises in  development and commercialisation of dermal regenerative solutions.

He says that completes a trio of ASX wound care companies for Morgans including Avita Medical (ASX:AVH) and  Aroa Biosurgery (ASX:ARX).

PNV has two products approved including NovoSorb BTM to treat partial thickness burns and wounds, surgical and reconstructive wounds, and NovoSorb MTX with the same indications as BTM with particular application for wounds where temporising is not required.

Further clinical trials are underway to expand the indications into full thickness burns and diabetic foot ulcers. Also further experimentation is underway in breast reconstruction and hernia repair.

PNV estimates the market potential of the current devices is US$1.7 billion, which implies a current market share of 3.7%.

“We believe that clinical trials to support expanded indications and entry into new geographies will drive revenue growth by ~30% per annum over the next three years,” Power says.

“Feedback from a number of surgeons confirms that outstanding results are being achieved.

“It was noted that by applying NovoSorb BTM to patients resulted in quicker recovery from intensive burns with shorter stays in ICU and reduced scarring.”

He says as a result this meant lower costs to hospital, despite higher product pricing.

Morgans initiate coverage on PNV with a target price of $1.88 and an Add recommendation.


Clinuvel falls after European label expansion knockback

Clinuvel Pharmaceuticals (ASX:CUV)  is down more than 11% this week after announcing its European label expansion of SCENESSE (afamelanotide 16mg) to facilitate treatment of adolescent (12-17 year old) erythropoietic protoporphyria (EPP) patients had been knocked back pending further data.

Upon scientific review, the European Medicines Agency (EMA) has requested further data from the use of SCENESSE in adolescent patients to allow the label expansion.

“Following a formal application submitted to the EMA in September 2022 to expand the approved indication for SCENESSE to include the treatment of adolescent EPP patients, CLINUVEL will conduct a post-authorisation study (CUV052),” CUV announced.

In the study 12 European adolescent patients will be evaluated following one dose of SCENESSE with results forecast to be reported to the EMA in 2024.

CUV says to date, over 13,500 doses of SCENESSE have been administered to adult EPP patients, with a consistent safety profile seen over longer time.

“They just need to do some additional trial work and that just came as a surprise to the market,” Power says.

EBR releases further positive analysis of SOLVE study

EBR Systems (ASX:EBR), which is developing a wireless cardiac pacing device for heart failure known as WiSE CRT (Wireless Stimulation Endocardially Cardiac Resynchronisation Therapy), has announced further analysis of its previously reported successful pivotal SOLVE study.

Specifically, data from randomised phase of the study showed a clinically and statistically significant 14.6% improvement in heart function for all patients treated with WiSE compared to patients in the control group.

Patients classified as previously untreatable (PU) or considered high-risk upgrade (HRU) to conventional CRT WiSE CRT treated patients showed an absolute 15.1% improvement in heart function vs control.

Initial results of the trial were presented at Heart Rhythm 2023 in New Orleans in May, with the latest data presented at the Asia Pacific Heart Rhythm Society (APHRS) meeting in Hong Kong.

Management says the strong result supports  its findings from the SOLVE trial and “demonstrates the efficacy and safety” of the WiSE system.

EBR says it continues to execute on its commercialisation strategy, with a pre-market submission to the US FDA remaining on track and approval expected during H2 2024.

Morgans has a Speculative Buy on EBR with a 12-month trading price of $1.49.


PIQ reports strong results for Oesophageal adenocarcinoma test

Proteomics International Laboratories (ASX:PIQ)  has released results for its blood test aimed at detecting oesophageal adenocarcinoma.

Power says the test has shown strong early results in discriminating early and late-stage disease, with the potential to replace costly endoscopy screenings.

The company is working on streamlining the test, confirming its clinical performance, and conducting economic and clinical studies for commercialisation over the next nine months.

Further work is still required on larger datasets to confirm the accuracy of the test, and to establish a diagnostic tool to differentiate patients who require endoscopic surveillance versus patients with low grade/no dysplasia and will not benefit from further invasive intervention.

Meanwhile, Power says PIQ expects the American Medical Association AMA to release the reference price for its PromarkerD test for diabetic kidney disease for the US by mid-September, a major catalyst for the company. 

Power says the list price as set by the AMA is a price to which then payors will reference/peg their submission for pricing across their insured base. 

“Our current assumptions of US$150 a test we see as a fair baseline, but given our view of the potential economic benefit the test can see upside of US$200-250 per test,” he says. 


The PNV, CUV, EBR & PIQ share price today:



ScoPo’s Powerplay – Neuren elevated to S&P ASX 200

2023 darling of the ASX biotech sector Neuren Pharmaceuticals (ASX:NEU) is Power’s stock of the week after being elevated to the S&P ASX 200 in the latest quarterly rebalance.

NEU has risen more than 40% YTD after large pharma partner Acadia (Nasdaq:ACAD) announced in March that the US Food and Drug Administration (FDA) had approved trofinetide for the treatment of Rett syndrome.

Now dubbed DAYBUE, the drug is the first approved treatment for Rett syndrome with its official launch in the US by Acadia in April.

Acadia recently provided encouraging early insights into the US launch of DAYBUE, expecting net sales of US$21-23 million in Q2 2023 and US$45-55 million in Q3 2023.

Furthermore, NEU has also had received the upfront payment of US$100 million that was earned following the recent expansion of its partnership with Acadia for trofinetide to a worldwide exclusive licence.

However, in a sign the market was not even taking in good news well this week the NEU share price is down more than 10% in the past five days.

“It’s a real head scratcher to us and we thought it would rally,” Power says.

“Fundamentally nothing is going wrong and getting into the ASX 200 is a positive and when we get this improved environment toward the end of the year we’d expect it well above $15.”

NEU is also forecast to release topline results of its Phase 2 clinical trial of NNZ-2591 in Phelan-McDermid syndrome in December.

READ ASX Rebalance: Biotech Neuren enters S&P ASX 200, Harvey Norman booted and Liontown makes the top 100


The NEU share price today:



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