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.
Themes of the week
Healthcare finished the week up 1.58 per cent, compared to the broader market which rose by 0.23 per cent.
This week provides more evidence that the immune-oncology space is starting to get investors’ attention.
In short, immune-oncology is the study of treatments that utilise the body’s immune system to fight cancer.
Until just 10 years ago, cancer therapy involved four main types of treatment: surgery, chemotherapy, radiotherapy, and targeted therapy.
But over the last of decade, immune-oncology has emerged as an alternative, transforming the cancer treatment landscape.
“This segment is attracting a lot of attention around the world, and in Australia if you look at Imugene, their market cap is now $2.2 billion, which is quite extraordinary,” says Power.
Imugene is at the clinical trial stage, and has no product nor revenue; but its share price has risen from 3c to 40c in just one year.
Power argues that Immutep, with a market valuation of $430m, provides a more interesting entry point for investors.
Immutep is also a clinical trial stage company that is developing the LAG-3 cancer immunotherapy treatment.
The company has become the global leader in LAG-3 products, with more LAG-3-related intellectual property and product candidates than any other company in the industry.
Elsewhere, another health stock that Power has his eyes on is Actinogen (ASX:ACW).
Actinogen is involved in the early stage treatment of cognitive impairment diseases, primarly in early stage dementia such as Alzheimer’s disease.
“It’s pre-revenue and in the drug development phase. But a new CEO recently joined that company, and he’s got a very good reputation with repositioning companies,” Power argued.
In March, the company appointed 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.
The other segment that Power thinks may come good in next few years is IVF. The number of IVF cycles in Australia have surged recently, with 5,000 cycles reported for the month of April.
Announcements you might have missed
The company has released the next generation version 4.0 software for its SOZO Digital Health Platform. SOZO uses ImpediMed’s BIS technology to measure and track critical information about the human body to aid clinicians in managing chronic disease.
“The key thing with ImpediMed is, we’re expecting data to be published shortly in one of the major journals. And that’s very important and could be a major catalyst for them,” Power said.
The breast imaging company has released its full year FY21 results on Thursday delivering a record revenue of just under NZ$20m.
The Kiwi-based company reported total revenue of NZ$19.7m, a 57 per cent increase compared to the previous corresponding period (pcp). It also recorded a 55 per cent increase in the all important annual recurring revenues (ARR).
Power’s pick of the week is Micro-X (ASX:MX1), a medical device company specialising in its mobile Rover 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.
“This is a company that we have a speculative buy recommendation on. We have it under full coverage with the 61 cent price target,” Power said.
Micro-X finished the week at 34c.
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Barry Stroman was a reporter for Zerg Watch, before becoming the lead editor. Barry has previously worked for Wired, MacWorld, PCWorld, and VentureBeat covering countless stories concerning all things related to tech and science. Barry studied at NYU.