It\u2019s been a tough couple of years for ASX health care with challenging economic conditions including steep interest rates rises to combat soaring inflation hitting the sector like a nasty dose of influenza.<\/p>\n
Furthermore, a frenzy around the potential of GLP-1 drugs for weight loss also hit big ASX health care names like CSL (ASX:CSL)<\/strong><\/a> and\u00a0 ResMed (ASX:RMD).<\/strong><\/a><\/p>\n Danish drug maker Novo Nordisk, which produces a GLP-1 semaglutide, sold under brand names Ozempic and Rybelsus in Type 2 diabetes and Wegovy in obesity, keeps soaring upwards<\/a> on updates of its drug development pipeline for weight loss, including a Phase 1 trial of amycretin.<\/p>\n But the potential of weight-loss wonder drugs has hit companies considered exposed to obesity conditions, such as leader in obstructive sleep apnoea (OSA) and other sleep-related respiratory disorders RMD and CSL, through its Swiss pharma firm CSL Vifor focused on kidney disease treatments.<\/p>\n Both CSL, with its primary business blood plasma products<\/a> and RMD, are confident weight loss drugs will not hurt their business longer term.<\/p>\n READ Dr Boreham\u2019s Crucible: ResMed holders breathe easy \u2013 those fat-busting needles have only hurt a little bit<\/strong><\/a><\/p>\n In another blow CSL\u2019s share price slumped in February upon after announcing its well-anticipated heart attack megatrial failed its primary endpoint, contributing to the the overall fall of the ASX health care index for the the month of 2.70%. However, Morgan\u2019s health care analyst Iain Wilkie told Stockhead <\/em>with\u00a0signs the higher interest rate cycle appear to be coming to an end, there is optimism of more money flowing into health care, which saw an end of year rally in the last months of 2023.<\/p>\n \u201cOn the macro-side, the potential end (or at least stabilisation) of the higher interest rate cycle could lead to more money flowing into healthcare.<\/p>\n \u201cThis will be particularly beneficial for small to mid-end companies that have been largely overlooked in the past two years.<\/p>\n \u201cWith renewed interest from shareholders, many companies are now in a position to accelerate their growth.\u201d<\/p>\n He says recent challenges have been a catalyst for innovation and resilience, and the sector is starting to see the fruits of that labour.<\/p>\n \u201cThe tide is turning for the healthcare sector,\u201d he says.<\/p>\n \u201cMany companies are now leaner and more streamlined, with a sharper focus on most marketable\/profitable assets.<\/p>\n \u201cLikewise, companies that may have lacked longer-term prospects and investor support have had to review operations, with many shutting down.<\/p>\n \u201cPeriods like this separates the wheat from the chaff \u2013 which is all part of a healthy market.\u201d<\/p>\n Wilkie says the US biotech market in particular has been buoyed by a surge in investor interest in 2024.<\/p>\n \u201cThe increased number of takeovers, licensing transactions, and new IPOs are all typically indicative of an up-cycle market.<\/p>\n \u201cAnother thing to keep in mind is these large healthcare groups are typically highly acquisitive, of which little external investments have been made over the last two years \u2013 which means many are cashed up and looking to expand or enhance their pipelines.\u201d<\/p>\n Here\u2019s some of the ASX health care stocks we\u2019ve noticed attracting the interest of shareholders in the early months of 2024. The pharmaceutical development company, which is dedicated to reformulating and bringing to market the anti-cancer drug bisantrene, has seen its share price rise ~40% YTD.<\/p>\n This distinctive small molecule, anthracene-based chemotherapeutic not only possesses anti-cancer properties but also exhibits reduced cardiotoxicity. This implies a lower likelihood of causing heart dysfunction, a common issue with nearly all cancer therapies.<\/p>\n Bisantrene has an extensive track record in treating cancer patients, having been employed in over 50 clinical trials and administered to more than 1,500 patients.<\/p>\n CEO Dr Daniel Tillett told Stockhead<\/em> he believes RAC\u2019s recent uptick has been driven by a number of factors, including a general improvement in the biotech investor space, with investors becoming more comfortable with financial investment in the sector as the threat of interest rate increases lessens.<\/p>\n \u201cAnother key factor in our share price increase was our recent positive news regarding our acute myeloid leukaemia (AML) clinical program,\u201d he says.<\/p>\n In late 2023 RAC announced results of a Phase 2 clinical trial in AML which showed a 40% overall response rate in very late stage patients not expected to respond to any treatment.<\/p>\n Last week the company announced preclinical data<\/a> studying a new way of using bisantrene at low doses in combination with another AML standard of care drug called decitabine.<\/p>\n \u201cThis combination worked far better than either drug on its own and it has opened up the possibility of using bisantrene more widely in AML patients who can\u2019t tolerate high intensity chemotherapy,\u201d Tillett says.<\/p>\n \u201cInterest in this exciting drug combination from Australian doctors has been high and we have received an offer from a key clinical leader in the AML field to run a new clinical trial testing this combination in AML patients.\u201d<\/p>\n He says the big news to come in the immediate future for RAC is the completion of GMP manufacturing of its new formulation of bisantrene RC220, which is expected before the end of Q1 CY24)<\/p>\n \u201cThis formulation not only makes bisantrene much easier to use than the original formulation, but it resets the patent clock for Race,\u201d he says.<\/p>\n Tillett says following on from the delivery of RC220, in Q2 CY24 is completion of the non-clinical (animal) toxicology studies of the drug.<\/p>\n He says this will enable RAC to use RC220 in patients in the second half of 2024.<\/p>\n \u201cWe are currently planning a trial of RC220 in patients who will be receiving anthracycline chemotherapy \u2013 one of the most common chemotherapy drugs \u2013 with the aim of not only better treating the cancer, but also protecting patients\u2019 hearts from the permanent damage anthracyclines can cause,\u201d he says.<\/p>\n \u201cWe hope to treat the first patient in this innovative trial in late 2024.<\/p>\n \u201cIf successful this trial could create a massive commercial opportunity for bisantrene as a treatment that combines both anticancer activity with cardioprotective activity in one drug.\u201d<\/p>\n \u00a0<\/p>\n The biotech recently released is up 12.5% YTD and ~29% YTD after Phase 1 extension study results of AD-214 confirmed the safety, tolerability, and effectiveness of the planned Phase 2 dose of lead asset AD-214 into Idiopathic Pulmonary Fibrosis (IPF).<\/p>\n Results showed AD-214 was well tolerated at the intended Phase 2 dose. The drug\u2019s availability and interaction with its target receptor were consistent across all doses, boosting confidence in its efficacy.<\/p>\n The study also addressed a key concern about the potential development of antidrug antibodies (ADAs) against AD-214, which could reduce its effectiveness over time.<\/p>\n However, ADX\u2019s reported results showed<\/a> \u201cno evidence of antidrug antibody mediated or other effects that might detract from efficacy after extended use in diseases such as IPF\u201d.<\/p>\n The Phase 1 positive results have positioned AD-214 for Phase 2 trials, marking a significant milestone for the company, which is now looking to secure partnerships or financing to advance to the next stage of clinical development.<\/p>\n CEO and MD Tim Oldham told Stockhead <\/em> at a macro level, there are several factors that are behind renewed interest in biotech with signs this at last can be sustained.<\/p>\n Oldham says follow-on capital raises are being more strongly supported and the rally is broad-based.<\/p>\n He says the XBI, which is an index of NASDAQ biotech stocks and as such serves as a measure of the health of the US biotech industry, is up 56% since November 2023 with 80% of companies in the green.<\/p>\n \u201cThere is breadth in the disease areas drawing interest, including obesity, cancer, cardiology, neurology, and inflammation,\u201d he says says.<\/p>\n Oldham says the prospect of interest rates easing along with M&A activity has also increased investor interest.<\/p>\n He says positive clinical data is also helping investor interest in 1AD and the company continues to keep investors informed about the company\u2019s medium and long-term prospects.<\/p>\n \u201cWe are doing what we said we would do \u2013 we just released new data from a clinical trial that is on time and opens the gateway to partnering,\u201d he says.<\/p>\n \u201cWe have the potential for transformative transactions on the near term horizon.<\/p>\n \u201cIPF assets at similar stage to AD-214 have been licensed in the past 2 years for upfront payments of US$45m and more, before contingent milestones and royalties.\u201d<\/p>\n \u00a0<\/p>\n \ufeff<\/span>\ufeff<\/span><\/span><\/span>\u00a0<\/p>\n At Stockhead, we tell it like it is.\u00a0While Race Oncology and AdAlta are Stockhead advertisers, they did not sponsor this article.<\/p>\n <\/span><\/p>\n The post \u2018Tide is turning for the healthcare sector\u2019 \u2013 ASX biotechs making strong gains in 2024 Part 1<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\n\u00a0<\/p>\n\u2018Tide is turning for the healthcare sector\u2019<\/h2>\n
\n\u00a0<\/p>\nRace Oncology (ASX:RAC)<\/strong><\/a><\/h2>\n
AdAlta (ASX:1AD)<\/strong><\/a><\/h2>\n
The RAC & 1AD share price today:<\/h2>\n\n