Health Check: In rude health, Alcidion shrugs off UK National Health Service reforms

• Alcidion says the abolition of the UK NHS could create opportunities
• Ahead of being taken over, Mayne Pharma has flagged a strong full-year profit
• Global biotech IPOs surge – then stall

Alcidion (ASX:ALC) chief Kate Quirke is sanguine about the pending merger of England’s National Health Service (NHS) with the Department of Health and Social Care.

This is a key plank of the new-ish Labor government’s ten-year reform plan for the country’s groaning health system.

The revamp is significant for the UK-centred Alcidion, given it services current NHS trusts heading for the chop.

One of the few ASX life-science plays to focus on the UK, Alcidion has developed software that manages patient flows and integrates data across multiple healthcare facilities.

On an investor hook-up this morning, Quirke said the push for more productivity with fewer staff was likely to mean greater demand for Alcidion’s digital platforms.

Also, most NHS staff will transition to the mega department and the changes won’t take place until 2027

“I see the opportunity increasing,” Quirke says.

“But we are waiting to see what the ten-year plan indicates in terms of where the [government’s] priority areas are.”

In rude health

Meanwhile, Alcidion expects a full-year profit turnaround after posting March (third) quarter positive operating cash flow of $2.5 million.

This is a turnaround on the December quarter deficit of $260,000 and $1.4 million of outflows a year previously.

March quarter receipts came in at $13.1m, with new contracted sales of $48.8m.

Of this, $11.5m is expected to be recorded in the current quarter.

The new sales include a “milestone” ten-year, $37.5m contract with the North Cumbria Integrated Care NHS Trust for a new electronic patient record platform.

Given the company usually posts a strong fourth quarter, management has upgraded guidance to underlying full-year earnings of more than $3m, compared with a $4.58m loss for the 2023-24 year.

The company expects revenue of at least $40m.

Alcidion has been in intensive care in recent years, with slower than expected tender processes and lengthier procurement cycles.

Unless the NHS reforms contain some hidden nasties, it’s time for a discharge.

Mayne Pharma looks to end its listed life with a bang      

Mayne Pharma (ASX:MYX) looks to be ending its listed life on a high, flagging a 100%-plus full-year profit improvement ahead of being taken over.

The company today reported unaudited March quarter revenue of $86.8 million, down 11% year on year with an underlying loss of $3.4 million.

But with improved trading relative to January and February, Mayne expects full-year earnings to come in at $47-51 million, a 105-123% improvement.

For the first nine months of the year, revenue edged up 5% to $300 million and underlying earnings soared 116% to $28.6 million.

The company cites strong growth in its women’s health (contraceptive) franchise, up 23% and international (non-US) up 2%.

This partially was offset by a 9% decline in its dermatology arm.

But all three segments should gain in the full year.

Mayne also announced a US$16 million purchase deal with the Nasdaq listed Sol-Gel Technologies, to exclusively license two dermatology products.

Mayne is under a takeover offer from US dermatology house Cosette, which is offering $7.40 of cash per share in a scheme of arrangement.

The scheme booklet is now due in mid-May, with expected deal completion in late June or early July.

While the offer was at a 37% premium when unveiled in early February, some investors object that Cosette will enjoy too much upside from improved conditions.

They will have their say at a scheme meeting in mid-June.

Biotech IPOs flag after a stellar 2024

Global biotech listings soared to their highest level in three years in calendar 2024.

That’s the good bit: this year’s activity to date has been dampened by the Trump-related regulatory and other uncertainties swirling around the sector.

According to analysis house Global Data, 50 initial public offers (IPOs) were completed in 2024, with a total value of US$8.52 billion (up 68% on the 2023 tally of US$5.06 billion).

This is the highest value since 2021, when 180 deals worth US$34bn were executed.

The value of US$100 million deals doubled in 2024 to US$7.88bn, led by the US$2.48bn IPO of the Swiss dermatology company Galderma.

“While cautious, investors are showing interest in companies with strong clinical data … and a shift towards more advanced stage biopharmaceuticals,” Global Data opines.

Trends are more off the pace this year to date, with US$2bn of deals done.

Last year, only three life sciences companies listed on the ASX. They were utism tester Blinklab (ASX:BB1) in April, as well as ReNerve (ASX:RNV) (nerve repair) and Vitrafy Life Sciences (ASX:VFY) in November.

This year, the only one on the horizon is the delayed listing of cosmetic injectables group Stormeur.

The developer of a rapid point-of-care test for group B streptococcus in pregnancy, Nexsen Biotech last year undertook a pre-IPO funding round.

But no appearance yet, your Worship.

Post-election Reserve Bank rate reductions might help to crank up the pipeline, but investors don’t have the appetite for risk.

Broker applauds Clarity on program

Broker Canaccord applauded Clarity Pharmaceuticals’ (ASX:CU6) pre-Easter decision to lighten up on its nuclear medicine programs.

Culling an overly busy rota of trials, Clarity has prioritised its diagnostic and therapeutic programs for prostate cancer, in cases of patients expressing the prostate specific membrane antigen (PSMA).

The company also will stress its program for neuroendocrine tumours.

Clarity has closed its programs for paediatric high-risk neuroblastoma and low-PSMA metastatic prostate cancers.

“A good biotech undertakes scientific discovery to place the right asset in the right indication, but also knows when there is not enough evidence and commercial viability for the program to continue,” says Canaccord.

Crucially, the reduced expenditure pushes the runway on Clarity’s $106m cash balance out to June next year.

The firm values Clarity at $6.74 on a sum-of-the-parts basis, an 8% reduction on its previous assessment.

On an unrisked basis, the valuation increases to $11.71 a share, but of course everything must go right.

At Stockhead, we tell it as it is. While Renerve is a Stockhead advertiser, the company did not sponsor this article.