ASX health stocks fall in past five days in line with broader markets on mixed economic signals
The ACCC raises concerns about proposed merger of Sigma Healthcare and unlisted Chemist Warehouse
Radiopharmaceuticals-focused Telix Pharmaceuticals has withdrawn its proposed IPO on the US Nasdaq
Morgans healthcare and life sciences expert Iain Wilkie is filling in for his colleague Scott Power to explain what the movers and shakers have been doing in health and gives his ASX Powerplay.
Are you a garlic lover? New research has found garlic supplementation lowered fasting blood glucose levels, HbA1c (to diagnose and monitor people with diabetes), total cholesterol, and low-density lipoprotein cholesterol, known as the “bad cholesterol”.
The research found garlic also increased high-density lipoprotein cholesterol levels, known as the “good cholesterol”.
Published in the journal Nutrients, the researchers in China conducted a meta-analysis of previous studies investigating the effects of garlic on blood glucose and lipid metabolism.
Researchers analysed 22 studies comprising 29 trials with 1,567 participants from various countries and age groups.
The trials had to use garlic as an intervention for more than weeks and report on HbA1c, fasting blood glucose, total cholesterol, HDL cholesterol, LDL cholesterol, and triglycerides.
Only studies with participants aged 18 and older and control groups were included.
Garlic was administered in various forms including powder, oil, aged extract, powder pills, extract capsules, and raw garlic.
Participants consumed between 300 to 22,400 mg of garlic powder daily or 800 to 4,200 mg of other preparations daily.
At the end of the trials, researchers compared participants’ blood levels to their baseline levels. This meta-analysis used the collected data to evaluate the impact of garlic consumption on metabolic markers.
“This meta-analysis suggests that garlic intervention improves some lipid indices in patients and outperforms the control group in various aspects, and it can be surmised that garlic therapy should be beneficial for patients with disorders related to glucose and lipid metabolism,” the authors wrote.
To markets…
And ASX health stocks could do with some improved nutrition this week. At 12.40pm (AEST) on Friday the S&P/ASX 200 healthcare index (ASX:XHJ) was fairly flat down 0.2% for the past five days, while benchmark S&P/ASX 200 (ASX:XJO) fell 1.72% for the same period.
“Looking more granularly, though, I’ve got 133 ASX healthcare stocks on my watchlist and I’ve got 68 down, 26 flat, 39 up for an average loss of 0.8%,” Wilkie says.
He says, overall, the week was marked by a cautious optimism in the US, tempered by political uncertainties in Europe and mixed economic signals from Asia.
“The interplay between these factors set the tone for the global markets,” he says.
Wilkie says Nvidia and Apple’s performances were significant drivers for the US market this week, highlighting the tech sector’s impact on broader market trends.
“The EU election results and French political developments, along with the Fed’s rate decision and inflation data, played pivotal roles in shaping investor sentiment,” he says.
“Employment and wage growth in the US, along with inflation data from Asia, were also key economic indicators that market participants watched closely.”
ACCC raises concerns over Sigma and Chemist Warehouse merger
Australia’s consumer watchdog the Australian Competition and Consumer Commission (ACCC) on Thursday outlined preliminary competition concerns about the proposed merger of Sigma Healthcare (ASX:SIG) and unlisted Chemist Warehouse.
“This is a major structural change for the pharmacy sector, involving the largest pharmacy chain by revenue merging with a key wholesaler to thousands of independent pharmacies that in turn compete against Chemist Warehouse,” ACCC Commissioner Stephen Ridgeway says.
“We have identified a range of preliminary competition concerns, including at the retail level and as a result of the proposed integration of the merged firm across the wholesale and retail level.
“We want to hear from interested parties, including rival pharmacies as we continue this review.”
The ACCC describes SIG as one of the largest wholesalers of prescription medicines, over the counter and front of store products. The company also provides brand and support services to community pharmacies operating as franchisees under Sigma banners such as Amcal +, Discount Drug Stores, PharmaSave and Guardian.
Chemist Warehouse operates as a franchisor and wholesaler under multiple brands such as Chemist Warehouse, MyChemist, Ultra Beauty, My Beauty Spot, and Optometrist Warehouse.
The ACCC is particularly concerned about the merger’s effect on independent pharmacies currently supplied by SIG, potentially reducing competition in pharmacy retailing.
Moreover, the ACCC is examining how the merged entity might favour Chemist Warehouse stores or disadvantage non-Chemist Warehouse banner stores, potentially increasing costs and reducing competitiveness for the latter.
The ACCC says it will continue its investigation to evaluate these competition issues. Morgans says the list of concerns was unsurprising and remains confident the merger will go through.
“All issues flagged were orange lights, which historically have a low rate of being blocked (11% historically down to 5% in the last 5 years), with ~70% finding a way to proceed with the transaction,” Wilkie says.
“We view Sigma will be able to work through the major key issues.
“We make no changes to our forecasts or valuation, expecting approval by January 2025.”
Morgans maintains a hold and 12-month target price of $1.14 on SIG.
Telix shelves proposed US Nasdaq listing
Radiopharmaceuticals-focused Telix Pharmaceuticals (ASX:TLX) has withdrawn its proposed IPO on the US Nasdaq, with the company saying it “did not feel that the proposed discounts were aligned with its duty to its existing shareholders”.
“Since announcing our intention to file (ITF) on the 4 January 2024 (AEDT)2, Telix has achieved a number of commercially significant milestones, including positive therapeutic pipeline data readouts, several successful strategic acquisitions and the completion of two further product approval submissions to the US Food and Drug Administration (FDA),” TLX says in an ASX announcement.
“This strong performance, augmented by excellent commercial execution in Q1 2024, has resulted in the share price increasing from AUD$9.53 at ITF to AUD $16.46 at last trading close, with recent all-time-highs at AUD $19.06.
“This represents a significant share price appreciation over the period.
TLS says as a profitable, cash generative company, it retains sufficient earnings and balance sheet capacity to deliver on key corporate objectives, including growth in the US commercial team to launch Zircaix, Pixclara, and TLX007-CDx, in addition to executing on current active clinical studies globally, including the ProstACT GLOBAL Phase 3 trial.
“While this is not our desired outcome Telix’s strategic objectives must align with our duty to existing shareholders,” managing director and group CEO Dr Christian Behrenbruch says.
Study shows Nanosonics CORIS tech outperforms
Disinfection device maker Nanosonics (ASX:NAN) has announced a new study demonstrating that its CORIS technology outperforms manual cleaning in biofilm removal in endoscopes. The study has been accepted for publication in the Journal of Hospital Infection.
NAN says despite current cleaning and disinfection efforts, flexible endoscopes can remain long-term reservoirs for infectious organisms.
World leading expert on biofilm in endoscopes and co-author of the publication Dr Michelle Alfa says the results showing biofilm removal by the CORIS device are significant given challenges with biofilm in endoscope reprocessing.
“In particular, the device removed cyclic build up biofilm from the small diameter channels, while the current manual cleaning approach was not effective,” she says in an ASX announcement.
“New technologies are required to address this significant problem and CORIS represents an opportunity to improve endoscope reprocessing and help prevent endoscope associated infections.”
Wilkie says publications like this are key for adoption of new technologies.
“Hospital budgets are tight at the moment though, so we’re looking to see these pressures ease – hopefully before the new product launch,” he says.
Morgans has an add rating and 12-month target price of $3.50 for NAN.
CSL Seqirus inks deal to provide pre-pandemic vaccines to EU
CSL (ASX:CSL) subsidiary CSL Seqirus will provide 665,000 pre-pandemic (zoonotic) vaccines to support 15 EU and EEA member states as well as to the Union Civil Protection Mechanism (rescEU) following reports of outbreaks of highly pathogenic avian influenza (HPAI) viruses in birds and poultry in Europe.
CSL Sequiris says in a press release it was selected by the Health Emergency Preparedness and Response Authority (HERA), part of the European Commission (EC), to provide the pre-pandemic vaccine doses.
The acquisition of pre-pandemic (zoonotic) vaccines will create a stockpile available to support the EC’s outbreak and pre-pandemic response.
“While the ECDC assesses the risk of infection from avian influenza to be low for the general population, it considers people with activities that expose them to infected animals or a contaminated environment at low-medium risk.” says CSL Seqirus head of global medical strategy Raja Rajaram.
“This agreement will help in Europe’s resolve to maintain robust preparedness and rapid response capabilities for this potential threat.”
Under the terms of the agreement, CSL Seqirus will deliver 665,000 doses of pre-pandemic vaccine that is well-matched to the H5 of the currently circulating H5N1 strain, to fifteen EU and EEA Member States, as well as the “Union Civil Protection Mechanism” (rescEU).
In addition, the four-year contract includes an option for participating authorities to purchase up to an additional 40 million doses of the pre-pandemic vaccine over the life of the contract.
CSL Seqirus says the vaccines are being manufactured at its European manufacturing sites in Amsterdam (for test and release) and Liverpool, which uses a scalable method of production and is one of the largest sites in Europe to manufacture seasonal influenza vaccines.
Wilkie says the company is also working to protect the US from the H5N1 bird flu threat. He says both the EU and US are actively pursuing vaccination strategies for workers in high-risk environments.
“The US is preparing 4.8 million doses of a CSL vaccine, while the EU explores joint procurement options,” he says.
“This proactive approach, amid concerns of the virus mutating and affecting humans more broadly, could lead to substantial demand for vaccine units, emphasising the urgency of safeguarding public health and preventing a potential pandemic.”
Wilkie’s Powerplay – PharmAust releases positive data
Clinical stage biotech PharmAust (ASX:PAA) is Wilkie’s pick of the week after more data was released showing from their clinical studies of lead drug monepantel (MPL) for Motor Neurone Disease (MND)/Amyotrophic Lateral Sclerosis (ALS).
Updated data analysis conducted by Berry Consultants shows a statistically significant survival benefit for MPL compared to
untreated matched-controls from the Pooled Resource Open-Access ALS Clinical Trials (PRO-ACT) database for patients with MND/ALS.
Treatment with MPL significantly reduced the risk of death by 91% when compared to PRO-ACT matched controls.
Furthermore, PAA says its Open-Label Extension (OLE) study has completed enrolment, with most Phase 1 MEND Study patients continuing.
“Additionally, some patients experienced stabilisation or improvement in their ALSFRS-R scores during compassionate use,” Wilkie says.
ALS Functional Rating Score-Revised (ALSFRS-R) is a tool used to measure the functional status of individuals with MND/ALS, assessing various aspects of daily functioning, including mobility, self-care, speech, and swallowing.
The consultants updated their analysis using data from the Phase 1 MEND study, including the baseline ALSFRS-R scores for patients who continued to the OLE Study.
Using a similar method to their survival analysis, they compared the change in ALSFRS-R scores over time between patients treated with MPL and those from the PRO-ACT database.
They found that the MPL treatment slowed down the rate of decline in ALSFRS-R scores.
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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. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
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