EBR Systems has soared on the bourse in the past month. Pic: Getty Images
Health & Biotech
Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 27 years, gives his take on the ASX healthcare sector for the week and his ‘Powerplay’ stock pick.
Scott Power says while there hadn’t been great movement in the overall S&P/ASX 200 Health Care index (ASX:XHJ) this week, there had been some strong performers indicating momentum in the sector.
At 12pm the XHJ was up 0.6% for the past five days, while the benchmark S&P/ASX 200 (ASX:XJO) rose 1% for the same period.
“At the top end of town CSL (ASX:CSL) is down 1.5%, which has kept the index fairly flat for the week,” Power said.
“But generally there is a bit of a rotation back into these smaller healthcare names.”
He said Opthea (ASX:OPT) had risen 26%, Neuren Pharmaceuticals (ASX:NEU) was up 19% and PolyNovo (ASX:PNV) lifted 6%.
The developer of the world’s only wireless cardiac pacing device for heart failure, EBR Systems (ASX:EBR), is up 58% in a month and briefly hit Morgans’ price target of $1.76 this week before paring back gains with a 7% drop on Friday.
EBR announced on Monday the FDA manufacturing pre-approval inspection (PAI) had been successfully completed and it expected its WiSE CRT (cardiac resynchronisation therapy) system to gain FDA approval on or before April 13, 2025, with commercial launch in H2 CY25.
The Centers for Medicare and Medicaid Services (CMS) has also accepted EBR’s WiSE CRT system into the highly selective Transitional Coverage for Emerging Technologies reimbursement pathway.
The TCET pathway is designed for select FDA-designated breakthrough devices and facilitates an expedited Medicare explicit coverage for those devices deemed particularly impactful.
“Clearly, passing through the FDA’s PAI unscathed and getting fast tracked for reimbursement via the TCET program are positive developments and highlight EBR’s regulatory and commercial proficiency,” Morgans healthcare analyst Derek Jellinek wrote in a note to clients.
Morgans has a speculative buy rating on EBR.
Microba Life Sciences (ASX:MAP), which has technology for measuring the gut microbiome, is Power’s pick of the week, with the company due to release its H2 FY25 cashflow report next week.
“Their share price has been stepping up and we’re looking forward to hearing about how their diagnostic business has been going along with their UK acquisition,” Power said.
“We’re also expecting an update on any plans they have to fund their therapeutic program, so we will be watching Microba closely.
“That is a company with some interesting catalysts coming through.”
Imricor Medical Systems (ASX:IMR) has released its latest quarterly result, with progress on several regulatory and commercial fronts.
Power said Imricor was the only company in the world that provided MRI-compatible consumable devices, such as single-use ablation catheters, required to perform cardiac ablations in an iCMR lab.
After receiving regulatory approvals in Qatar and Saudi Arabia in 2024, during the quarter Imricor received its first purchase order for capital equipment and consumables from Qatar. Imricor said the sale started the rollout of iCMR labs into the Middle East.
Power said the company had several near-term catalysts including the start of its European trial for ventricular tachycardia and completion recruitment for its US trial for atrial flutter.
“We are focussed on the progress of the clinical program and note the US trial is expecting approval in H2 CY25 a slight delay on our previously published research note suggesting mid-25,” Power said.
“Of key importance to us and highlighted by the company as a major inflection point is the first in human VT procedure, which is due to be performed shortly.
“It’s quite a complex procedure so there will be a lot of eyes watching how it all goes – both clinicians and investors.”
Power said there was enormous value in Imricor’s Northstar 3D Mapping System, which has been submitted for European approval, with US approval to follow.
“They can map the heart to enable a doctor to better locate the ablation procedure,” Power said.
“We think Imricor’s mapping system is a real hidden gem within the business.”
Morgans has a speculative buy rating on Imricor and 12-month target price of $1.51.
Infection prevention company Nanosonics (ASX:NAN) is up ~11% this week after providing a strong H1 FY25 trading update and indicating its expectations to achieve the top-end of its FY25 guidance range.
Nanosonics said unaudited profit before tax would come in at around $10.9 million for H1 FY25, which was 120% higher on the previous corresponding period and 34% better than H2 FY24.
Revenue is expected to be $93.6m, 18% up on pcp and 4% up on H2 FY24.
Nanosonics specialises in the automated decontamination of reusable medical instruments such as ultrasound and endoscopes with its Trophon technology for ultrasound decontamination becoming standard of care in several countries, including the US, Australia and UK.
In a note to clients, Morgans healthcare analyst Iain Wilkie wrote that following a strong rally in the share price over the last month the broker’s target price of $3.75 had been reached. As a result, it had pared its recommendation back to a hold from add.
“Questions remain around install base growth and budgetary pressures in the hospital which overhangs the stock ahead of a pending FDA approval and launch of the CORIS device,” he wrote.
“While we see potential risk to the upside in FY25 guidance and outlook commentary at the result, we’re happy to see this play out to get more confidence on the hospital environment as well as timing around CORIS before getting more positive.”
CORIS is Nanosonics’ newest device, intended for flexible probes commonly used in procedures such as colonoscopies, gastroscopies, enteroscopies, endoscopic ultrasounds and bronchoscopies.
The company has filed a de novo regulatory submission for CORIS and is forecasting approval in H2 FY25.
Nanosonics will release its full interim results on February 20 along with a revised outlook.
Do you live near greenspace? Chinonso Odebeatu, a PhD candidate from UQ’s School of Public Health, has led a study that found positive associations between exposure to greenspace and sufficient vitamin D levels.
The study involving more than 440,000 participants found that those with the most greenspace within 300-1000 metres of their homes were 36% more likely to have sufficient vitamin D levels.
“The environment we live in – particularly our exposure to greenspaces – plays a role in how much vitamin D we get from the sun, irrespective of skin colour, genetic predisposition, and latitudinal differences,” Odebeatu said.
“Vitamin D deficiency affects people of all ages and has been linked to rickets in children and osteoporosis, heart disease, cancer, diabetes and multiple sclerosis in adults.”
He said by integrating greenspace policies into urban design, cities could reduce the burden on healthcare systems through prevention-focused strategies.
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.
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At Stockhead, we tell it like it is. While EBR Systems and Imricor Medical Systems are Stockhead advertisers, the companies did not sponsor this article.
Health & Biotech
Health & Biotech
Health & Biotech
