3 Healthcare Stocks Shining on ASX – MVP, RHT, CYP

Healthcare being a large industry in Australia is a significant contributor to the country’s economy. The below-mentioned ASX listed healthcare stocks have been performing well over the past few months, plus have made strong operational progress as reported in their latest ASX release. Let’s take a quick look at the recent development of these stocks.

Medical Developments International Limited (ASX: MVP)

An emergency medical solutions provider, Medical Developments International Limited (ASX: MVP) manufactures world-leading inhaled analgesic from its premises in Australia, Springvale, Victoria, and is a sole manufacturer of the active molecule worldwide as well as continues to develop new markets and applications for the iconic brand Penthrox®, a fast-acting trauma and emergency pain relief product.

In mid-June 2019, the company met with the officials of Food and Drug Administration (FDA) with regards to its IND clinical hold letter issued in August 2018. The company believes that it can now address all the clinical hold issues.

Results of the recent meeting with the FDA:

  • The Food and Drug Administration has now agreed that a required animal study to predict idiosyncratic liver reaction to Penthrox® would not be required;
  • Besides that, the company has agreed to perform a required animal study, which replicates the human dosing regimen for Penthrox®. It is expected that the study will take six months to complete.

Recently, in June 2019, the company reached an agreement with Mundipharma Pty Ltd, a leader in the development and provision of medicines for pain, for the exclusive distribution rights of Penthrox® in Australia. Under this agreement, Mundipharma will provide their sales force and marketing experience to MVP while MPV will keep its focus on maintaining key relationships.

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On the stock performance front, in the past six months, MVP’s shares have provided a return of 51.50% as on 19th July 2019. At the time of writing on 22th July 2019 (AEST 01:00 PM), MVP’s stock was trading at a price of $6.030, up by 0.495%, with a market capitalisation of circa $397.03 million. Its 52 weeks high price stands at $6.500 and 52 weeks low price at $3.480, with an average volume ~141,317. The stock is trading at a PE multiple of 1,515.00x, with an annual dividend yield of 0.66%.

MVP 6- moths Share Performance (Source: ASX)

Resonance Health Limited (ASX: RHT)

A provider of non-invasive medical imaging software and services, Resonance Health Limited (ASX: RHT) has signed a Master Services Agreement (“MSA”) and an associated initial Scope of Work with a NASDAQ-listed pharmaceutical company for the use of Resonance Health products and services in their clinical trial. The name of the client is not yet disclosed as the company and the client are bound by stringent confidentiality obligations.

It is expected that the clinical trial will commence in July 2019 and will continue for a period of 48 months.

The Master Services Agreement can be terminated by the client at any time providing 30 days written notice to the company. The MSA may be terminated by either party, if the other party commits a breach and fails to cure the breach within 10 days after receiving a written notice of the breach from the non-breaching party.

The company will start receiving the monthly payments from August 2019, which will comprise of two components:

  1. Fixed Costs: This cost includes Data Management Setup charges and monthly Project and Data Management fees;
  2. Variable Costs: This costs related to the use of Resonance Health products and services for the duration of the trial.

On the stock performance front, in the past six months, RHT’s shares have provided a return of 31.31% as on 19th July 2019. At the time of writing on 22th July 2019, RHT’s stock was trading at a price of $0.145, with a market capitalisation of circa $55.53 million. Its 52 weeks high price stands at $0.170, and 52 weeks low price at $0.020, with an average volume ~986,047. The stock is trading at a PE multiple of 50x.

RHT 6-months Share Performance (Source: Company Reports)

Cynata Therapeutics Limited (ASX: CYP)

Australian clinical-stage stem cell and regenerative medicine company, Cynata Therapeutics Limited (ASX: CYP) has confirmed that it has received an indicative, non-binding and conditional proposal from Sumitomo Dainippon Pharma Co., Ltd regarding a possible acquisition of all of the shares in Cynata at a price of $2.00 per share in cash by way of a scheme of arrangement.

From past few days, the share price of the company has increased significantly, which has prompted ASX to raise a price query.  In its response to ASX query, the company has informed that its Board does not believe that the existence of Sumitomo proposal, or the company’s engagement with any other parties would explain the recent trading in its securities.

However, the company believes that there are a number of potential factors, which could explain the recent trading in its securities.

One of the reasons behind recent trading activity could be the company’s Cymerus™ technology which was recently featured in several presentations at the Annual Meeting of the International Society of Cell and Gene Therapy.

In the company’s June 2019 Quarterly report, which was published on 4th July 2019, the company informed that its license option has been extended to 19th September 2019 and it has made substantial progress after numerous bi-lateral discussions and a recent tri-lateral face-to-face meeting at WARF.

In 2018 Annual Report, the company had advised that there were 962 million people over 60 in 2017 and this is now expected to reach 2.1 billion by 2050 and 3.1 billion by 2100. Due to this, the demand for regenerative therapies, particularly for chronic diseases of the aged has increased alot. The company is very well positioned to cater to this growing market.

In the past six months, CYP’s shares have provided a return of 27.94% as on 19th July 2019. At the time of writing on 22th July 2019 (AEST 01:00 PM), CYP’s stock was trading at a price of $1.800, with a market capitalisation of circa $177.28 million. Its 52 weeks high price stands at $1.850 and 52 weeks low price at $0.940, with an average volume of ~85,849.

It is evident by the share performance that these above-mentioned stocks have been performing very well on ASX. If this trend continues, these stock have the potential to provide good returns to investors.

CYP 3-months Share Performance (Source: Company Reports)


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