Check Up: Earnings season is almost here. Here’s how ASX biotech investors should read the 4C Report

Earnings season is upon us, and ASX biotechs will be reporting
Investors should become familiar with the Appendix 4C report
And here are the recent ASX healthcare stocks winners

Investors are about to head into one of the most important periods of the calendar – the September – December earnings season.

In Australia, the ASX 200’s strong finish in 2023 has set a positive tone for the season.

Focus will be on the banks’ performance, the miners’ response to rising iron ore prices, and the potential growth of the Energy and Health Care sectors.

What specific things should investors look for?

Well, first, consistent earnings are probably the most important driver of individual stock performance.

When a stock reports increasing sales / earnings, investors tend to feel more confident about the stock’s prospects. Conversely, when earnings are declining below expectations, it can be a warning sign of potential trouble ahead.

How to read the Appendix 4C report

What about stocks with no current earnings, such as the dozens of pre-revenue biotech stocks on the ASX?

In their case, the one thing to focus on is the Appendix 4C report, or what’s formerly called the Quarterly cash flow report for entities subject to Listing Rule 4.7B.

ASX companies that are yet to turn a profit or achieve positive operating cash flow, must submit these reports to the market every three months.

This quarterly report details a company’s financial position through its cash flow during the period.

This along with the accompanying activity report provide a basis for informing the market about the company’s activities for the past quarter, how it has been financed, and the effect this has had on its cash position.

Cash Flow From Operating Activities

One of the most important things in the report is tracking how a company spends its funds.

“If a company ‘burns’ through cash quickly, that will shape its future growth and funding prospects,” said trading platform, Selfwealth.

“You should also audit whether expenditure is in line with the company’s forecast in the prior quarterly cash flow report.”

Cash Flow From Investing Activities

Where a company acquires or disposes of assets that are integral to its operations, all associated cash flow will be displayed in this section.

“If a company has sufficient capital to fund its acquisitions, a cash outflow from investing activities should not necessarily raise a red flag in its own right,” noted Selfwealth.

Cash Flow From Financing Activities

When it comes to funding, the market will typically favour small-cap stocks that use existing cash reserves in place of debt or new equity.

“With that said, there are instances where these forms of funding have a distinct benefit, particularly if there are immediate opportunities available to fund growth,” said Selfwealth.

“In any case, investors should pay attention to the details of this section to establish whether a company is dependent on debt or issuing financial instruments in order to stay afloat.

“This could be the sign of an unsustainable business, or at least one that is taking longer to grow than management may have expected, especially if cash flow from operating activities is not showing growth.”

Consolidated statement of cash flows

This provides a snapshot as to the overall change in cash and cash equivalents across the quarter.

“It is not uncommon to see companies holding call deposits or bank overdrafts as opposed to bank balances,” said Selfwealth.

“The key thing here to look at is whether the company has sufficient funds to at least sustain current operations for subsequent quarters, if not ramp up operations in pursuit of growth.”

Best performing ASX biotechs over the past month

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CODE COMPANY PRICE 1 WEEK RETURN % 1 MONTH RETURN % 6 MONTH RETURN % 1 YEAR RETURN % MARKET CAP EYE Nova EYE Medical 0.280 2 124 10 -8 $52,422,946 ADR Adherium 0.061 -2 91 36 2 $20,006,399 SHG Singular Health 0.078 100 86 86 -29 $11,304,821 RGS Regeneus 0.007 17 75 -30 -84 $2,145,058 MDR Medadvisor 0.290 4 55 29 14 $159,461,104 RNO Rhinomed 0.032 7 45 -48 -71 $9,143,030 EMV Emvision Medical 2.150 5 43 81 26 $162,930,364 CMP Compumedics 0.385 43 43 108 97 $69,093,550 NTI Neurotech Intl 0.077 5 40 75 13 $66,880,443 RAD Radiopharm 0.094 4 36 -10 -26 $33,555,520 ALA Arovella Therapeutic 0.135 4 35 187 463 $123,800,342 NEU Neuren Pharmaceut. 22.860 -2 33 68 158 $3,018,741,835 PEB Pacific Edge 0.100 -9 33 -47 -80 $81,127,134 NXS Next Science 0.370 -1 32 -33 -46 $97,717,860 EBR EBR Systems 0.730 12 30 -20 24 $227,195,361 LBT LBT Innovations 0.013 18 30 -29 -73 $16,375,801 CU6 Clarity Pharma 2.150 -4 30 134 143 $555,948,353 UBI Universal Biosensors 0.230 10 28 -8 -21 $48,844,970 PAB Patrys 0.010 25 25 -17 -68 $16,459,579 BOT Botanix Pharma 0.180 3 24 29 190 $273,601,540 CSX Cleanspace Holdings 0.360 16 24 50 -35 $31,314,075 PAA Pharmaust 0.135 13 23 69 59 $50,045,528 MVP Medical Developments 0.955 -2 22 -36 -43 $86,305,219 PSQ Pacific Smiles Grp 1.450 -1 21 -6 -5 $232,989,629 ACR Acrux 0.058 -2 21 23 -15 $17,377,859 HMD Heramed 0.024 4 20 -70 -83 $7,710,341 ONE Oneview Healthcare 0.275 15 20 34 175 $180,739,751 IMM Immutep 0.380 10 19 19 29 $451,757,132 PBP Probiotec 2.860 -1 19 6 30 $233,398,175 DOC Doctor Care Anywhere 0.070 -7 19 56 27 $24,931,673 LDX Lumos Diagnostics 0.083 -3 19 30 89 $42,354,404 DXB Dimerix 0.195 -13 18 167 28 $84,490,920 CBL Control Bionics 0.047 2 18 -39 -68 $6,808,967 TLX Telix Pharmaceutical 11.025 17 17 -7 69 $3,496,248,176 AGN Argenica 0.605 25 16 75 32 $65,935,297 BIT Biotron 0.100 -9 15 194 233 $90,227,551 CTE Cryosite 0.745 20 15 15 1 $34,166,694 AVE Avecho Biotech 0.004 33 14 -20 -75 $12,677,188 AVH Avita Medical 4.370 8 14 -24 105 $276,898,590 AHX Apiam Animal Health 0.305 2 13 -40 -51 $54,901,661 FCG Freedomcarehold 0.175 -3 13 $4,179,684 SOM SomnoMed 0.460 0 12 -54 -63 $49,952,042 IMU Imugene 0.105 -19 12 5 -38 $752,754,128 IPD Impedimed 0.145 -6 12 -17 104 $283,263,109 AGH Althea 0.040 8 11 -15 -38 $16,633,846 CHM Chimeric Therapeutic 0.030 -12 11 -29 -64 $23,991,632 CVB Curvebeam Ai 0.370 -4 10 $75,015,914 AFP Aft Pharmaceuticals 3.500 6 10 3 4 $367,031,910 JTL Jayex Technology 0.011 22 10 10 10 $3,094,064 1AD Adalta 0.024 -4 9 -4 -41 $13,145,102 DVL Dorsavi 0.012 0 9 -14 0 $7,159,939 AT1 Atomo Diagnostics 0.025 9 9 -31 -53 $15,980,058 MEM Memphasys 0.013 0 8 -19 -2 $14,698,202 CYP Cynata Therapeutics 0.135 4 8 4 -55 $24,250,291 LGP Little Green Pharma 0.140 0 8 -26 -24 $42,013,053 ILA Island Pharma 0.085 -11 8 -23 -53 $6,907,820 EMD Emyria 0.057 -3 8 -54 -67 $20,897,876 SPL Starpharma Holdings 0.155 -5 7 -54 -78 $63,828,652 TRP Tissue Repair 0.235 -8 7 -24 -13 $13,393,923 FRE Firebrickpharma 0.053 2 6 -71 -75 $6,342,281 SNZ Summerset Grp Hldgs 10.070 0 6 7 19 $2,377,956,027 ATX Amplia Therapeutics 0.080 -1 5 -5 -7 $15,520,512 GSS Genetic Signatures 0.485 8 5 -17 -47 $77,510,941 ACW Actinogen Medical 0.024 9 4 -32 -73 $59,990,062 ECS ECS Botanics Holding 0.024 9 4 0 -4 $26,561,536 CAJ Capitol Health 0.245 9 4 -4 -23 $266,452,351 SDI SDI 0.755 -3 4 -8 -19 $92,715,113 OCA Oceania Healthc 0.690 5 4 -2 -9 $501,850,341 PME Pro Medicus 96.875 5 4 48 61 $10,047,553,287 PER Percheron 0.058 -3 4 -11 -37 $52,289,608 ACL Au Clinical Labs 2.990 3 3 -8 -5 $599,447,025 PAR Paradigm Bio. 0.380 -11 3 -61 -72 $134,976,832 EBO Ebos 33.325 -3 3 -4 -21 $6,401,070,941 CSL CSL 285.250 -2 2 9 -1 $137,531,819,335 OPT Opthea 0.485 -17 2 -15 -43 $328,090,274 ENL Enlitic Inc. 0.865 6 2 2 2 $60,685,575 VHT Volpara Health Tech 1.110 0 1 13 56 $282,355,482 OCC Orthocell 0.410 1 1 5 -1 $79,706,943 EZZ EZZ Life Science 0.615 3 1 23 71 $26,263,575 IME Imexhs 0.640 -1 1 7 31 $27,268,923 RMD ResMed Inc. 25.970 -2 0 -19 -17 $15,729,381,592 AC8 Auscann Grp Hlgs 0.040 0 0 0 0 $17,621,884 AHC Austco Healthcare 0.190 3 0 12 58 $55,526,506 ANR Anatara Ls 0.022 0 0 -35 -48 $4,029,449 BP8 Bph Global 0.002 0 0 -50 -89 $2,753,345 CDX Cardiex 0.121 0 0 -18 -65 $17,354,743 CTQ Careteq 0.028 -7 0 -24 -54 $6,595,324 EPN Epsilon Healthcare 0.024 0 0 -4 4 $7,208,496 GLH Global Health 0.115 -4 0 -8 -43 $6,675,697 HXL Hexima 0.018 0 0 -25 -10 $3,006,713 IVX Invion 0.005 0 0 -38 -44 $32,108,161 MDC Medlab Clinical 6.600 0 0 0 -15 $15,071,113 OSL Oncosil Medical 0.009 0 0 -31 -75 $17,770,870 REG Regis Healthcare 3.170 -1 0 45 69 $948,259,995 TD1 Tali Digital 0.001 0 0 0 -67 $3,295,156 TRU Truscreen 0.020 -9 0 -23 -49 $9,240,557 UCM Uscom 0.041 0 0 -13 -18 $7,811,876 SHL Sonic Healthcare 31.410 -1 -1 -12 0 $15,069,986,596 FPH Fisher & Paykel H. 21.930 -2 -1 -4 -2 $12,788,804,636 IDX Integral Diagnostics 1.900 1 -1 -39 -42 $445,927,641 VLS Vita Life Sciences.. 1.735 -8 -1 11 19 $93,160,737 AHI Advanced Health 0.098 -11 -1 -55 -15 $22,452,812 RHC Ramsay Health Care 49.930 -3 -1 -11 -26 $11,327,190,596 OIL Optiscan Imaging 0.081 -5 -1 -8 -41 $68,497,946 ARX Aroa Biosurgery 0.740 -8 -1 -18 -36 $254,146,637 PNV Polynovo 1.540 -2 -2 -3 -41 $1,045,702,618 IMR Imricor Med Sys 0.540 5 -2 38 69 $91,215,792 VIT Vitura Health 0.265 10 -2 -49 -50 $152,606,554 BMT Beamtree Holdings 0.225 0 -2 -8 -30 $64,463,811 VTI Vision Tech Inc 0.225 0 -2 -2 -37 $11,785,224 ZLD Zelira Therapeutics 0.900 -2 -2 -42 -17 $10,212,440 SIG Sigma Health 0.953 1 -2 27 63 $1,247,666,261 AYA Artrya 0.205 -15 -2 -11 -41 $16,123,044 COV Cleo Diagnostics 0.165 -8 -3 $12,597,000 CAN Cann 0.097 0 -3 -19 -55 $41,133,585 MVF Monash IVF 1.330 -1 -3 11 34 $514,317,989 MSB Mesoblast 0.285 0 -3 -78 -69 $289,372,538 BDX Bcaldiagnostics 0.099 0 -3 41 65 $24,660,637 RCE Recce Pharmaceutical 0.483 -7 -4 -26 -25 $97,776,894 TRJ Trajan Holding 1.158 -7 -4 -33 -41 $179,614,980 IXC Invex Ther 0.078 8 -4 70 -47 $5,711,692 COH Cochlear 288.280 -3 -4 25 37 $18,663,851,967 HGV Hygrovest 0.048 -4 -4 17 -31 $10,094,909 NC6 Nanollose 0.022 0 -4 -61 -63 $3,495,500 MX1 Micro-X 0.105 7 -5 -5 -22 $54,396,732 NYR Nyrada Inc. 0.021 0 -5 -45 -86 $3,276,183 IDT IDT Australia 0.100 -5 -5 52 25 $36,905,344 RAC Race Oncology 0.795 -6 -5 -50 -58 $132,882,809 ANN Ansell 23.810 -5 -5 -14 -18 $2,946,670,147 MAP Microbalifesciences 0.195 0 -5 -35 -40 $77,965,029 CGS Cogstate 1.300 -12 -5 -21 -37 $224,493,820 HIQ Hitiq 0.018 -10 -5 -14 -44 $6,285,329 PIQ Proteomics Int Lab 0.810 -5 -5 -6 -26 $99,091,124 CYC Cyclopharm 1.855 -4 -5 -15 16 $174,078,203 CUV Clinuvel Pharmaceut. 15.620 -3 -5 -12 -37 $769,453,595 M7T Mach7 Tech 0.695 -1 -6 -24 -6 $166,421,822 VBS Vectus Biosystems 0.300 7 -6 -30 -62 $15,962,808 RSH Respiri 0.027 0 -7 -18 -48 $28,616,461 PYC PYC Therapeutics 0.091 -4 -8 30 47 $335,958,042 EOF Ecofibre 0.110 -15 -8 -35 -57 $39,781,760 NAN Nanosonics 4.150 0 -8 -13 -10 $1,250,685,286 AVR Anteris Technologies 18.050 -4 -9 -7 -29 $329,904,007 MYX Mayne Pharma 5.350 -8 -9 18 32 $455,147,441 1AI Algorae Pharma 0.010 -17 -9 -38 -22 $16,612,402 LTP Ltr Pharma 0.300 -6 -9 $22,529,756 IIQ Inoviq 0.600 -9 -10 -32 -10 $54,751,128 PCK Painchek 0.036 -3 -10 33 9 $51,690,579 VFX Visionflex 0.009 13 -10 80 0 $12,752,921 PTX Prescient 0.062 -3 -10 -25 -52 $49,929,827 TRI Trivarx 0.026 -7 -10 30 30 $8,790,046 HLS Healius 1.350 -11 -11 -51 -56 $994,711,849 IMC Immuron 0.075 -4 -11 -4 -1 $17,084,876 MXC Mgc Pharmaceuticals 0.430 -12 -11 -89 -96 $19,294,718 NOX Noxopharm 0.075 -9 -12 108 -44 $23,379,036 AMT Allegra Medical 0.044 -2 -12 -20 -44 $5,262,885 PGC Paragon Care 0.210 -7 -13 -19 -30 $140,252,318 RHT Resonance Health 0.052 -9 -13 4 -10 $24,278,432 4DX 4Dmedical 0.635 -13 -14 -6 61 $250,165,632 IRX Inhalerx 0.025 -4 -17 -29 -58 $4,744,174 ALC Alcidion 0.065 -7 -22 -35 -59 $87,260,759 NSB Neuroscientific 0.038 -5 -22 -64 -61 $5,639,590 ICR Intelicare Holdings 0.018 -22 -25 38 -18 $4,226,841 OSX Osteopore 0.034 -26 -29 -56 -74 $5,731,989 IBX Imagion Biosys 0.240 -25 -37 -70 -73 $7,671,939 SNT Syntara 0.017 0 -37 -69 -73 $14,132,328 GTG Genetic Technologies 0.125 -7 -38 -58 -58 $14,427,156 RHY Rhythm Biosciences 0.110 0 -41 -78 -89 $25,984,254 ATH Alterity Therap 0.004 -11 -43 -38 -64 $15,245,305 ME1 Melodiol Glb Health 0.001 0 -50 -89 -95 $4,728,824

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Nova EYE Medical (ASX:EYE)

Nova EYE has been rising since announcing that it has grown its US sales revenue up 65% to US$5.1 million for the six months ended 31 December 2023, compared to the pcp.

This is despite uncertainties in the month of November and December in relation to the Medicare reimbursement for the Company’s iTrack portfolio, caused by local coverage determinations (LCDs) proposed by five (5) Medicare Administrative Contractors (MACs).

However, the withdrawal of the LCDs on 29 December 2023, and the confirmation of continued reimbursement coverage for the company’s iTrac portfolio provides a clear runway for higher sales growth.

Adherium (ASX:ADR)

ADR rose after announcing the first purchase order agreement of 1,750 of its Hailie Smartinhaler sensors to a major US hospital system, Intermountain Health.

Intermountain includes 33 hospitals, 385 clinics with more than 12,000 associated physicians. Intermountain is a leader in outpatient respiratory care with around 300,000 chronic obstructive pulmonary disease (COPD) and asthma patients.

However, Adherium announced this week that its CEO, Rick Legleiter, has tendered his resignation and provided six months’ notice to enable a smooth transition to new leadership.

Singular Health (ASX:SHG)

SHG has beeb riding high since announcing a binding enterprise licence order for 5,000 annual licences of the 3Dicom Patient software in the US.

The licences were purchased by TechWorks 4 Good on behalf of US Veterans, to enable greater understanding and portability of medical records of Vets.

Whilst details of the deal is confidential, SHG said that the revenue generated from this order exceeds the total direct-to-consumer sales of the 3Dicom software in the 2023 calendar year of ~$50,000 by more than 40%.

Compumedics (ASX:CMP)

Compumedics has also been in the winners’ circle after saying that it eepects strong results for H1.

Unaudited revenues for H1 FY24 are expected to be a record H1 result of approximately $26m, 35% higher than pcp.

Sales orders taken for H1 FY24 were also a record H1 result of $30.3m, which is 74% higher than pcp. Compumedics expects to return to profitability in H1 FY24.

Neurotech (ASX:NTI)

Shares of Neurotech were bid up after the company announced the completion of recruitment for its Phase 2/3 NTIASD2 clinical trial in December.

In total, 56 patients were enrolled, all with level 2 (requiring substantial support) or level 3 (requiring very substantial support) autism.

The trial will study the treatment of NTI’s proprietary lead drug formulation NTI164, derived from a unique cannabis strain with low THC and a novel combination of cannabinoids, including CBDA, CBC, CBDP, CBDB and CBN.

Radiopharm (ASX:RAD)

Radiopharm announced in late December that it has received Human Research Ethics Committee (HREC) approval from the Hollywood Private Hospital in Perth, WA that will see it become the second Australian site for its RAD 204 Phase 1 therapeutic study.

The RAD 204 Phase 1 clinical trial will will evaluate the safety and efficacy of the novel radiotherapeutic in patients with advanced PD-L1 positive non-small cell lung cancer (NSCLC), the most common type of lung cancer.

At Stockhead we tell it like it is. While Neurotech is a Stockhead advertiser, it did not sponsor this article.

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