ScoPo’s Powerplays: Mental health takes centre stage; Actinogen to progress Alzheimer's study

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

It has been a relatively subdued week for the health sector.

Healthcare finished the week up 0.68 per cent, compared to the broader market which rose by 1.60 per cent.

The pullout of Japanese tennis champion Naomi Osaka from the French Open has turned the spotlight on mental health.

Mental health, as defined by the WHO, is “a state of well-being in which the individual realises his or her own abilities, can cope with the normal stresses of life, work productively and fruitfully, and is able to make a contribution to his or her community”.

That would include social issues such as loneliness, which was the subject of a recent study by Monash University Research Fellow expert, Claryn Kung.

The study discussed the economic impact of loneliness and isolation across Australia, which found that people with higher income were less likely to report being lonely.

Being married also results in reduced probability of reporting loneliness – a mental condition that costs £2.5 billion a year in the UK due to sick days and productivity loss.

There is a cohort of ASX stocks focusing on metal health, which has gained attention especially after COVID-19.

This includes pure-play mental health stocks such as Cogstate (ASX:CGS) and Total Brain (ASX:TTB).

News of the week

The news of the week came out of Actinogen (ASX:ACW), who announced the progression of its clinical development program to treat patients with Alzheimer’s disease.

Actinogen has now received approval from the Bellberry Human Research Ethics Committee to commence the first part of the XanaMIA study.

The trial is designed to study improvements in cognitive ability in older volunteers, and patients with mild impairment in the first clinical stage of Alzheimer’s.

It will be conducted at four clinics in Australia, and enrol approximately 100 healthy volunteers aged 50 years and over.

“That was a very important milestone for them to get that feedback from the FDA. Those trials are starting in the next couple of months, and are putting Actinogen in a very strong position,” says Power.

The Actinogen share price rose by more than 30 per cent for the week.

In March, the company appointed the highly respected Dr Steven Gourlay as its new CEO.

Dr Gourlay has more than 30 years’ experience in the development of novel therapeutics, and was the chief medical officer at US-based Principia Biopharma.

“And he’s put his own money into it as well, so I think that’s a really interesting story,” added Power.

Overseas, giant health play Abbott has issued a downgrade for FY21. The updated guidance is due mainly to significantly lower demands for COVID-19 diagnostic testing.

“That news was big, and created a bit of a downdraft for the healthcare sector on the global front,” Power explained.

Upcoming IPO

Monday will host the ASX debut of analytical science and devices company, Trajan Group.

The company, which was started by a husband and wife team in 2011, has raised $90m in the IPO and will list at $1.70 for a market cap of $220m.

Trajan develops analytical science instruments and devices used in healthcare, as well as food and environmental analysis.

The company bootstrapped its way to a $1.7m profit by 2020, which is expected to grow to $5m this year.

“The big capital raise shows that there’s a lot of money out there chasing smart companies,” Power said.

Announcements you might have missed

Neuren Pharma (ASX:NEU) said that its meeting with the FDA was positive, and has opened the door for Phase 2 clinical trials of its lead drug, NNZ‐259. The drug aims to treat patients with Phelan‐McDermid, Angelman and Pitt Hopkins syndromes.

Dimerix (ASX:DXB) announced that the European Medicines Agency (EMA) confirmed that DXB’s study design meets the criteria for potential accelerated approval of its treatment for FSGS kidney disease. The study will now be aimed at ensuring regulatory agencies will have sufficient evidence to assess DMX-200 for accelerated marketing approval.

MGC Pharma (ASX:MXC) is about to commence three clinical studies on three separate drugs in 2021.The company will be conducting trials on its COVID-19 drug CimetrA, epilepsy drug CannEpil, and dimentia drug CogniCann. All results are expected later this year.

PharmAust (ASX:PAA) is about to commence the Phase I clinical trial on its lead drug Monepantel, for people with motor neurone diseases (MND). The study will be conducted following a trial protocol approval from the Monash Health Human Research Ethics Committee, and a $900k funding from AFL-affiliated charity FightMND.

Antinsense (ASX:ANP) announced that feedback from the FDA confirmed that the findings at 25mg/week in ANP’s Phase II, open-label study conducted at Royal Children’s Hospital in Melbourne are adequate to support larger studies. ANP is now consulting with its US based regulatory advisors on the appropriate next steps and to fine-tune the Phase IIb/III study design and development plans for the US.

ScoPo’s Powerplay

Power’s pick of the week is again, Micro-X (ASX:MX1), a medical device company specialising in the Nano and Rover mobile X-ray machines which weigh just 95kg, compared to the standard 400-500kg.

The FDA has just approved an application for the Rover bedside imager, only 14 days after submission.

The company has also just announced a new 700m2 facility in Seattle.

“This will enable them to get their products very quickly into the US market. They’ve also got an exclusive deal with a company called Carestream to bring on other distributors, and they’re also doing a lot of work with defence forces in the US and Australia,” said Power.

Micro-X finished the week at 34c.

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