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Health & Biotech
Health and wellness is big business. According to Morgans healthcare analyst Scott Power there are plenty of companies on the ASX feeding our appetite for pills, powders, beverages, and creams to improve everything from our immunity, gut, sexual health and concentration, to alleviating symptoms of mental health conditions such as depression and anxiety.
And then there is the quest for longevity – but not just living to a ripe old age free from nasty diseases such as cancer but aging in a way that maintains the vibrancy, energy and even look of youth. Yes, there is a growing market for health and wellness products to help keep our skin and hair glowing, minimise wrinkles and keep those joints primed to put the spring in our step.
The global health and wellness market was valued at US$5,243 billion in 2022 and is forecast to grow at a CAGR of 5.5% annually to reach more than $8,945 billion by 2032.
Several factors have been attributed to growth of the sector including an upsurge in personal disposable income, heightened consumer awareness of health and wellness products and services, increased government spending on advanced healthcare infrastructure development, and a growing population’s aspiration for a healthier and more active lifestyle.
Japanese beverages giant Kirin, the parent company behind Lion, which owns Aussie beer brands including XXXX, Hahn and Tooheys, decided it wants to cure your hangover too.
In August Kirin acquired Australia’s biggest vitamin business Blackmores in a deal worth $1.88 billion.
“It’s a theme where people are becoming more interested and concerned about their health and wellness,” Power says.
“The question always for these businesses is are they growing their business profitably in a way that is sustainable?”
So which ASX stocks are pushing the health and wellness agenda and looking to follow in the footsteps of 1932 founded Blackmores?
| Code | Company | Market Cap |
|---|---|---|
| PBP | Probiotec Limited | $210,627,622 |
| MCP | McPherson's Ltd | $62,617,876 |
| BWX | BWX Limited | $39,997,500 |
| BXN | Bioxyne Ltd | $28,524,681 |
| EZZ | EZZ Life Science | $27,331,200 |
| BIO | Biome Australia | $21,931,155 |
| S66 | Star Combo | $12,292,551 |
| HPC | The Hydration Company | $9,284,268 |
| AN1 | Anagenics Limited | $6,581,159 |
| CCO | The Calmer Co Internationl | $4,085,596 |
| SKN | Skin Elements Ltd | $3,986,403 |
| NGS | Nutritional Growth Solutions | $3,768,411 |
| EXL | Elixinol Wellness | $3,758,896 |
| HCT | Holista CollTech Ltd | $3,066,801 |
PBP is a manufacturer, packer and distributor of a range of prescription and over-the-counter (OTC) pharmaceuticals, complementary medicines and consumer health products.
The company has six manufacturing facilities in Australia and distributes its products both domestically and internationally.
PBP manufactures products on behalf of a range of clients, including major international pharmaceutical companies.
Power says PBP reported a solid FY23 result achieving revenue and earnings towards the top end of guidance. Revenue was $214 million, up 17% year on year (YoY) with underlying EBITDA of $35.5 million up 8% YoY.
“It’s a $210 million market cap company so the biggest out of them all,” he says.
EZZ chairman Glenn Cross told Stockhead the company is dedicated to pioneering cutting-edge solutions that empower individuals to take control of their health and wellness journey.
EZZ’s market-driven, genomic R&D strategy is focused on introducing personalised nutritional products to improve quality of life and human health.
“Our unwavering commitment to innovation and excellence drives us forward in the health and wellness sector as it continues to grow and evolve,” Cross says.
“In the ever-evolving landscape of the health and wellness sector, our vision for EZZ is clear – to be at the forefront, driving innovation and setting new standards of excellence to improve quality of life and human health.”
Cross says the health and wellness sector is experiencing unprecedented growth, and EZZ’s genomic research capabilities combined with its data driven approach to customer needs and behaviours, ensures the company is constantly able to meet changing market demands.
“Our dedication to a market-led R&D process with scientifically developed, high-quality products and ethical practices, sets us apart,” he says.
The Chinese market has proven to be very receptive to EZZ’s products and the company has forged partnerships with new distributors with a robust pipeline of 27 products to tap into expanding market segments.
“The fact that our products are manufactured in Australia under stringent Good Manufacturing Practice standards and registered with the Therapeutic Goods Administration serves as a compelling advantage for our products in Asia and in particular in China,” Cross says.
VLS’s core business is the development and distribution of over the counter (OTC) medicines, as well as complementary and alternative medicines, dietary supplements and health foods under various brand names throughout Australia, South East Asia and China.
The company’s brands include Herbs of Gold, VitaHealth and VitaScience. Like Blackmores, VLS also has a long history with the VitaHealth brand established in 1947 as a retail pharmacy in Singapore and its first supplement range developed in 1973.
The company now has more than 400 registered products. The company recently reported group sales of $34.7 million for the half year ending June 30, 2023, up 6% on pcp with strong revenue growth from Australia and exports into China.
BXN has a focus on health and wellness products particularly in the gut and immune health areas. Earlier this year the company acquired Breathe Life Sciences (BLS), which is focused on new-pharmacopoeia alternative medicines, such as medicinal cannabis, MDMA, psilocybin, and pre-pharmaceutical wellness solutions for businesses and direct to consumer.
BLS includes the trademarked Dr Watson brand, a market leader in CBD and mushroom products in the UK and Japan, where it is one of only a few CBD brands approved as a vendor to Amazon.
“Health is not a destination, but a journey that is made up of a thousand little decisions each day over the course of a lifetime, and which determine the quality and length of that lifetime,” CEO Sam Watson says.
He says probiotics, for example, and gut health supplements can be important.
“Not many people understand how connected the gut is to the mind,” he says.
“Serotonin, the happy neurotransmitter, is produced in our guts.
“Our gut microbes also produce GABA which helps control feelings of fear and anxiety so you want to keep your gut running smoothly.”
Watson says mushroom nootropics for brain, energy and focus including cordyceps, lions mane and reishi may be considered new age in the West but are thousands of years old in the East.
“The health and wellness industry is about natural solutions and remedies to support optimal living, and prevent disease,” he says.
“Covid has shown how susceptible we are to disease, but also how resilient and strong we are in fighting it.
“Our mission in our consumer health products is to give people the education and tools to promote their wellness every day, with quick and accessible options for those strapped for time.”
AN1 is a health and beauty business growing through the global distribution and sales of its proprietary and licensed brands anti-aging solutions.
BLC Cosmetics is AN1’s wholly owned subsidiary focused on sales and distribution of Australian and international brands of cosmetic and wellness products.
Advangen is AN1’s wholly owned subsidiary engaged in development and sale of proprietary products for hair, skin and body.
“They’re a business that has been restructured with a new management team and when you look at its financial they’re heading very much in the right direction towards profitability with growing sales,” Power says.
Chairman Sandy Beard says AN1 is well positioned for further organic and inorganic growth with a mix of brands, strong management team, good distribution partners, channels to market.
Its major shareholder is diversified investment play and one of Australia’s oldest listed companies Hancock & Gore (ASX:HNG) for which Beard is also chairman.
“Anagenics is a business we are dedicated to building and taking on the journey towards profitability and growth in a large growing sector,” Beard says.
S66 was founded in 2004 and listed on the ASX in 2018. The company develops, manufactures and distributes a range of branded vitamins, dietary supplements and skincare products, serving both domestic and offshore markets, predominantly in Asian countries.
According to its website S66’s curated health products are made from natural ingredients backed with scientific research and development and the highest standard manufacturing practices governed by the TGA. The company’s manufacturing facilities are located in Sydney.
“Some of Australia’s leading supplement brands contract manufacturing to Star Combo Pharma while our own brand and product development team continues to produce products demanded by a growing market,” the company says.
S66 currently supplies the Australian pharmacy network through 450 Terry White Chemmart stores as well as wholesale customers in Australia, Vietnam and China.
Its FY23 results included revenue growth of 28% yoy, which it attributed to strengthening relations with several industry partners in Australia including Terry White Chemmart along with growing sales via its Vietnam distributor.
S66 says its core OEM and Own Brands business continued to grow during FY23, with record manufacturing output as the company executed its order book, benefiting from improved supply chain dynamics coupled with intermittent 24-hour manufacturing capabilities to increase production.
However, FY23 wasn’t all smooth sailing for S66, with a factory fire in October 2022 that caused substantial damage to property and equipment. However, fortunately there were no injuries with manufacturing operations continuing as “business as usual”.
At Stockhead, we tell it like it is. While EZZ Life Sciences and Bioxyne are Stockhead advertisers, they did not sponsor this article.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
Health & Biotech
Health & Biotech
Health & Biotech
