5 Successful ASX Listed Health Care Stocks of 2019 and Importance of Research Trials

  • Dec 11, 2019 AEDT
  • Team Kalkine
5 Successful ASX Listed Health Care Stocks of 2019 and Importance of Research Trials

The primary research tool in advancing medical knowledge and patient care are clinical trials conducted when doctors do not know whether a new approach works well for patients and is safe, and which treatments or strategies work best for certain illnesses or groups of people.

In addition, new treatments can be discovered for diseases through extensive research involved in clinical trials while alternative ways to detect, diagnose, and prevent the probability of developing a disease may also become known during these trials. Essentially, clinical trials are aimed at establishing what does and does not work in humans that cannot be learned in the laboratory or through experiments on animals. For doctors, clinical studies help in analysing whether the adverse impacts of a new drug or treatment are acceptable when compared with the given benefits.

Let’s look at the latest developments of the following five ASX listed health care stocks of 2019 (CSL, SPL, RMD, RHC, COH) -

CSL Limited (ASX: CSL)

Biotechnology company, CSL Limited (ASX: CSL), established in 1916, is a global leader with a portfolio comprising life-saving medicines, including treatments for haemophilia and immune deficiencies, as well as vaccines to prevent influenza. CSL comprises two businesses -CSL Behring and Seqirus, both saving lives in over 70 countries through the provision of their products based on extensive R&D and innovations.

Leadership Changes: On 9 December 2019, the company announced to have appointed Ms Carolyn Hewson AO as an independent Non-Executive Director, effective the same day. Ms Hewson joined CSL Board with over 35 years’ extensive experience in the financial markets, risk and investment management.

FY19 Results: For the full year ended 30 June 2019, CSL reported an 8.1% increase in sales revenue to USD 8.2 billion, while underlying net profit after tax (NPAT) for the year at constant currency was up 16.5% to USD 2.0 billion.

Stock Information: With a market capitalisation of AUD 126.33 billion, the CSL stock was trading at AUD 279.885, edging up 0.555% by AUD 1.545 on 11 December 2019 (AEST 12:59 PM). Also, CSL has delivered positive returns of 50.15% year-to-date, 30.98% in the last six months and 19.46% in the last 3 months.

Starpharma Holdings Limited (ASX: SPL)

Melbourne, Australia-based Starpharma Holdings Limited is engaged in the development of dendrimer products for pharmaceutical, life science and other applications with its two core development programs being, VivaGel® portfolio and DEP® drug delivery. In addition, the company is engaged in the development of various products internally and others through commercial tie-ups.

DEP® cabazitaxel Trial Update: On 10 December 2019, Starpharma announced that Phase 1 component of its Phase 1 / 2 trial for DEP® cabazitaxel has been successfully completed, as the trial met its objective of evaluation covering safety, tolerability and preliminary efficacy data, and identified a recommended Phase 2 dose of 20 mg/m2.

Encouraging efficacy signals:

  • were observed in 67% of patients assessed to date;
  • included prolonged stable disease in multiple tumour types, such as prostate cancer;
  • were observed in cancers not usually responsive to conventional cabazitaxel (Jevtana®), such as ovarian cancer, and at doses lower than used for Jevtana®.

The company would now commence phase 2 trial. Starpharma Holdings has initiated two new locations for trial, with enrolment activities already underway.

FY19 Results: A snapshot of Starpharma’s results for the financial year 2019 is given below:

Stock Information: With a market capitalisation of AUD 482.37 million and approximately 372.48 million shares outstanding, the SPL stock was trading at AUD 1.295 on 11 December 2019 (AEST 01:01 PM). The year to date return of the stock stands at 22.17%.

ResMed Inc. (ASX: RMD)

ResMed Inc. develops, manufactures, and markets medical equipment to treat sleep disordered breathing. The diagnostic and treatment devices are sold in various countries through the company’s subsidiaries and independent distributors.

Q1 FY20 Results: For the first quarter of the financial year 2020 ended 30 September 2019, the company reported a 16% increase in revenue to AUD 681.1 million; up 17% on a constant currency basis, demonstrating strong performance for yet another quarter. ResMed recorded an uptick of 13% in revenue across the US, Canada, and Latin America, excluding Software as a Service, on the back of strong sales across the company’s mask and device product portfolios.

Meanwhile, the company’s revenue across Europe, Asia and other markets improved by 8% in total on a constant currency basis relative to the same period of the prior year. ResMed also recorded strong mask sales across these markets.

Stock Performance: ResMed has a market capitalisation of around AUD 31.44 billion with ~ 1.43 billion shares outstanding. On 11 December 2019 (AEST 01:08 PM), the RMD stock was trading at AUD 21.900, down 0.137% by AUD 0.030. RMD has delivered positive returns of 36.72% year-to-date, 28.17% in the last six months and 12.75% in the last three months.

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care Limited provides health care services including private hospital services, rehabilitation, psychiatric care, day, and complex surgery throughout Australia, Indonesia, and Europe.

FY19 Highlights: Ramsay Health Care recorded a 24.4% increase in revenue to AUD 11.4 billion and earnings before interest, tax, depreciation & amortisation (EBITDA) was up 14.1% on previous year to AUD 1.6 billion during the financial year ended 30 June 2019. The core NPAT amounted to AUD 590.9 million, up 2% on prior year and the core EPS was also up 2.1% on previous year.

Ramsay Health Care’s fully franked full year dividend of 151.5 cents was also recorded high, up 5.2% on previous year.

Australian operations delivered solid earnings growth and continues to maintain a market leadership position with high quality, strategically located hospitals and the ongoing investment strategy. The company completed acquisition of Capio during the period and is now in the advanced stages of integration. In Asia, a strong operating performance was recorded, particularly in Malaysia and Indonesia.

Stock Performance: Ramsay Health Care has a market cap of ~ AUD 14.26 billion with ~ 202.08 million shares outstanding. On 11 December 2019 (AEST 01:23 PM), the RHC stock was trading at AUD 70.625, up 0.106% by AUD 0.075. RHC has delivered positive returns of 22.14% year-to-date and 10.41% in the last three months.

Cochlear Limited (ASX: COH)

Cochlear Limited is engaged in research, development and marketing of cochlear implant systems for hearing impaired individuals. The company's hearing implant systems include Nucleus and Baha that are sold both domestically and internationally.

New Board Appointment: On 10 December 2019, Cochlear announced to have appointed Michael Daniell to the Board, effective on 1 January 2020. Mr Daniell holds around 40 years’ experience in the medical device industry with extensive executive leadership experience. From November 2001 to March 2016, Mr Daniell served as the Managing Director and CEO of Fisher & Paykel Healthcare Corporation Limited after holding different technical management and product design roles within the same company. Currently, he is also serving as a NED (Non-Executive Director) of Fisher & Paykel Healthcare.

Stock Performance: Cochlear has a market capitalisation of around AUD 13.15 billion with ~ 57.83 million shares outstanding. On 11 December 2019 (AEST 01:27 PM), the COH stock was trading at AUD 227.025, down 0.174%. COH has delivered positive returns of 30.03% YTD, 10.19% in the last six months and 9.07% in the last three months.


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