3 Pointers To Look For Growth In Health Care Space: ALC, MYX, MSB, REG, OPT

The participants in the health care industry are always in the process of developing innovative treatments/therapies and expanding their business by providing new or existing treatments in a wider area, or geography. In the health care sector, there is always a requirement of innovation as the chronic or other newly detected diseases are increasing day by day. The three most important factors which are responsible for the growth of the health care company are innovation, expansion and commercialisation. The companies are engaged in developing new pharmaceutical products have the potential to improve patients’ health significantly. Health care companies are expanding their business by collaborations, licensing agreements and by commercialising their products.

In this article, we are discussing five health care stocks, which are focused on new growth areas for their businesses.

Alcidion Group Limited (ASX:ALC)

An ASX listed Australian health care company Alcidion Group Limited (ASX:ALC) is working with the aim to transform the health care sector with smart and intuitive technology solutions and by providing a complementary set of software products and services. The company’s simple purpose to meet the needs of allied healthcare and hospitals across the globe. ALC is providing its services to nearly 215 hospitals across the UK, Australia and New Zealand.

Launch of MIYA MEMRe-

In one recent announcement on 19 November 2019 the company unveiled Miya MEMRe which is a mobile Electronic Medical Record that allows clinicians and other health care professionals to review their current activity as well as caseload.

• This application is currently under trial in Australian health services in local clinical systems and emergency departments.
• Miya MEMRe is a risk indicator in real-time through mobile devices for improving decision making.
• Clinicians can instantly see their caseload such as admissions, discharges, patients in ED, consult requests and can prioritise their time by using Miya MEMRe.
• This is an excellent solution for both clinicians and patients; it reduces clinician’s workload and improves patient safety.

Stock Performance-

ALC’s stock was trading at $0.205 on 21 November 2019 (AEST 12:47 PM) with a market capitalisation of $203.09 million. The stock has delivered a good return of 336.17% on a YTD basis and 113.54% in the last six months.

Mayne Pharma Group Limited (ASX:MYX)

A specialty pharmaceutical company Mayne Pharma Group Limited (ASX:MYX) which is headquartered in South Australia, engaged in applying its drug delivery capability for the commercialisation of branded as well as generic drugs. Mayne, which has a remarkable product pipeline, operates through its distribution partners in Australia, as well as regions including Asia, North America and Europe. The company also has two product development and manufacturing facilities which are based in the United States of America, Salisbury, Greenville, Australia and North Carolina.

Expansion of dermatology pipeline-

According to one recent announcement, the company disclosed about obtaining licensed rights for generic topical dermatology product from Encube, which is a leader in developing and manufacturing of topical formulations in the United States market. The company continues expanding its dermatology pipeline. Topical dermatology product of Encube was recently filed for US FDA and the approval is expected in the calendar year 2020.

As per IQVIA, the market sales of this product were greater than US$40 million for the fiscal year ended on 30 September 2019.

The company’s CEO, Mr. Scott Richards commented on this expansion-

Stock Information-

The company’s stock was trading at $0.547 on 21 November 2019 (AEST 12:48 PM), down 0.545% from its previous close, with a market capitalisation of $922.06 million. MYX has approx. 1.68 billion outstanding shares.

Mesoblast Limited (ASX:MSB)

A health care company Mesoblast Limited (ASX:MSB) which develops off-the-shelf cellular medicines and has two commercialised products in Japan and Europe. The company has initiated the submission of an application for biologics license for its product candidate. The application would be lodged with the US FDA for the product targeted to treat patients with acute graft versus host disease. The company has already completed a successful Phase 3 trial.

Quarterly Highlights- (ended 30 September 2019)

• The company signed a strategic partnership with Grünenthal GmbH for the development and commercialisation of MPC-06-ID, a 3^rd phase allogeneic product candidate. The product is targeted to treat the chronic low back pain due to degenerative disc disease. With this agreement, before the launch of the product, Mesoblast would receive US$150 million and further the commercialisation milestone payments would also be paid.
• MSB’s Net operating cash usage for the Q1 Financial year 2020 was US$15.6 million, down by 20% as compared with the first quarter of the fiscal year 2019.
• For the quarter ended 30 September 2019 the company generated revenues worth US$1.9 million from the sales of TEMCELL® (1) HS. Inj. in Japan.
• On a yearly basis to 30 September 2019, MSB generated revenues of US$5.9 million, up 45% as compared to prior corresponding period (pcp).
• The company entered into an agreement with Lonza for commercial manufacturing of remestemcel-L for acute pediatric graft versus host disease (aGVHD) for its planned US market launch of remestemcel-L.

Stock performance-

Mesoblast’s stock was trading at $1.789 on 21 November 2019 (AEST 12:49 PM), down by 0.28% with a market capitalisation of $957.97 million. The stock has delivered a return of 41.11% on a year to date basis and 19.80% in the last six months.

Regis Healthcare Limited (ASX:REG)

An Australia based health care company Regis Healthcare Limited (ASX:REG) is engaged in providing age care services. The company offers dementia care, respite care, palliative care, ageing-in-place and transitional care. Regis health care is one of the largest age care service providers and operates in Victoria, Queensland, NSW, South Australia, Western Australia, Northern Territory and Tasmania.

Recently, the company updated the market with a presentation at the UBS Conference for 2019, highlighting about the company, its business overview and developmental updates.

Regis has signed a contract to acquire two Homes from Lower Burdekin Home for the Aged Society

• Community -based not for profit organisation
• The company would assume ownership of the assets from 1 March 2020.
• The homes are compliant with all 44 standards.
• A total 173 residential aged care centres are located between two homes.
• The key industry dynamics for residential aged care market dated July 2019 were-
  • $18.1 billion annual revenue including government funding ($12.3 billion), resident funded ($4.8 billion) and funding from other sources ($12.3 billion)
  • According to aged care Stocktake data as of 30 June 2019 there were 213,000 residential aged care places.
  • These are forecast to increase by approximately 88,000 over the next decade.
• The total asset value of the company as at 30 June 2019 is approximately $1,290 million which includes New land and buildings-development program, acquisitions and other additions less accumulated depreciation.

Source: UBS conference presentation

Stock Information-

The company’s stock was trading at $2.965 on 21 November 2019 (AEST 12:51 PM), down 0.836%, with a market capitalisation of $899.24 million and annual dividend yield of 5.09%.

Opthea Limited (ASX:OPT)

OPT is a Victoria-based biopharmaceutical company, developing new biologics targeted to treat ophthalmic diseases. Opthea is developing its new therapeutic product OPT-302 for retinal disease and is advancing the clinical developmental program in phase 2 wet age-related macular degeneration (AMD) and diabetic macular edema (DME) clinical trials of OPT-302.

According to one ASX announcement the company mentioned that the positive results from a first-in-human clinical trial for OPT-302 in wet AMD are published in a leading ophthalmic journal Ophthalmology Retina. The detailed outcome of the study related to dose escalation and trial expansion for the evaluation of safety, pharmacokinetics and the biological activity of the OPT-302 intravitreal injections (alone or in combination with ranibizumab) in 51 patients with wet AMD were published in the document.

Source: Company’s Report

Stock Performance-

The company’s stock was trading at $2.850 on 21 November 2019 (AEST 12:51 PM), down 5%, with a market capitalisation of $750.87 million. The stock, which has a 52-week high price of $4.150 and a 52-week low price of $0.550, has delivered an excellent return of 426.32% on a YTD basis.

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