A Glimpse at 5 Health Care Stocks: SIG, API, EHE, PAR, MVP

  • Jan 09, 2020 AEDT
  • Team Kalkine
A Glimpse at 5 Health Care Stocks: SIG, API, EHE, PAR, MVP

The Australian stock market advanced further on Thursday, 09 January 2020, amid recent US-Iran tensions. On 09 January 2020, the benchmark S&P/ASX 200 Index closed the day’s trade in green zone at 6,874.2, witnessing a rise of 56.6 points or 0.82 per cent. The broader All Ordinaries Index closed higher by 61.3 points or 0.88 per cent to settle at 6,991.4. The S&P/ASX 200 Health Care (Sector) index also showed an upward trend, settling at 42,603.5 with an increase of 743.3 points or 1.74% from the previous close.

In this article, we would be discussing five ASX listed health care stocks while looking at their recent developments.

Sigma Healthcare Limited (ASX:SIG)

Sigma Healthcare Limited has the largest pharmacy network in Australia, boasting more than 1,200 independent as well as branded stores such as Amcal, Chemist King, Discount Drug Stores (DDS), Guardian, and PharmaSave. Sigma is Australia’s leading full line wholesale and distribution business to community and hospital pharmacy.

Sigma Chief Financial Officer Departs

Sigma Healthcare announced on 08 January 2020 the departure of its Chief Financial Officer, Iona MacPherson by mutual agreement after serving the company for more than three years since her joining in November 2016. She has been a valued member of Sigma’s executive team.

While the company has begun searching for a new CFO externally, to lead the finance team through its current business transformation & cultural change program, Sigma’s present Executive General Manager Retail Pharmacy, Jeff Sells would take over the role of acting CFO in conjunction to his present role. Mr Sells has been a part of Sigma for 9 years (including 6 years as CFO from 2010 to 2016).

Chief Executive Officer and Managing Director of Sigma, Mark Hooper remarked that CFO’s resignation would neither affect Sigma’s trading performance nor the accomplishment of over $100 million efficiency gains via its Project Pivot transformation program. However, CEO and MD mentioned that the timing of this change is not ideal.

Shedding light on the December and early January sales, Mr Hooper informed that the company has delivered strong sales and is on the right path to meet its existing guidance of $46-47 million underlying EBITDA and to fast track the growth through financial year 2021.

Stock Information

On the stock front, SIG’s stock settled the day’s trade at $0.585, up 0. 862% on 09 January 2020. Market capitalisation of the company stood at $614.48 million with 1.06 billion outstanding shares.

Australian Pharmaceutical Industries Limited (ASX:API)

Leading pharmaceutical distributor and parent entity of Soul Pattinson Chemist, Priceline Pharmacy and Pharmacist Advice, Australian Pharmaceutical Industries Limited (ASX:API) offers services including marketing programs, retail services, wholesale product delivery, and business advisory services. The main brands of API are-

  • Priceline Pharmacy
  • Soul Pattinson Chemist
  • Pharmacist Advice
  • Club Premium
  • Pharmacy BestBuys
  • Clear Skincare

Financial Highlights from Annual Report for FY2019 ended 31 August 2019

API presented its annual report for the financial year 2019 ended 31 August 2019 on 10 December 2019. The key operational highlights are as follows-

  • Financial year 2019 has been a year of continued growth across the entire API group along with the extension of API’s business portfolio.
  • API group’s total revenue without the impact of PBS reforms and Hepatitis C Medicine, amounted to $4.0 billion, reflecting a 4.1% rise on the prior corresponding period (pcp).
  • Reported net profit after tax (NPAT) was recorded at $56.6 million, soaring 17.4% per cent on the pcp; underlying NPAT which also amounted to $56.6 million was up 3.2% on the pcp.
  • Earnings before interest and tax (EBIT) were reported at $94 million, representing an increase of 14.1% on the pcp; underlying EBIT which also amounted to $94 million, up 3.9% on the pcp.

Stock Information

On the stock front, API’s stock settled the day’s trade at $1.375, up 1.103% on 09 January 2020. Market capitalisation of the company stood at $670.01 million with 492.66 million outstanding shares.

Estia Health Limited (ASX:EHE)

Established in 2005, Estia Health Limited (ASX: EHE) is one of the largest providers of residential aged care homes in Australia, with facilities spread across different regions including South Australia, Victoria, NSW and Queensland.

Becoming a Substantial Holder

Estia Health announced on 12 December 2019 that United Super Pty Ltd became a substantial holder in the company with effect from 09 December 2019. United Super Pty Ltd has 13,087,909 number of ordinary shares with a voting power of 5.01%.

Occupancy and Trading Update

Estia Health informed the market that as at 30 November 2019, spot occupancy had declined to 93.5%, representing a dip of 0.6% from the spot rate at 16 August 2019, across its portfolio of the 5,944 operational beds.

It was further mentioned that the company is currently not anticipating the dynamics and sentiment to improve materially in the short-term.

Additionally, due to the decrease in the Maximum Permissible Interest Rate and competitive pressures, the revenue rates have been impacted.

The full year FY2020 EBITDA on Mature Homes is expected within the range of $78 million to $82 million on a pre-AASB16 “like for like” basis. However, this is subject to no material change from occupancy as well as revenue rates, observed at the November end during the remainder of the financial year.

Stock Information

On the stock front, EHE’s stock settled the day’s trading at $2.440, up 0.826% on 09 January 2020. The market capitalisation of the company stood at $631.84 million with 261.09 million outstanding shares.

Paradigm Biopharmaceuticals Ltd (ASX:PAR)

ASX listed biopharmaceutical company, Paradigm Biopharmaceuticals Ltd (ASX:PAR) is focused on repurposing PPS (pentosan polysulphate sodium). PPS is an FDA-approved drug, targeted towards treatment of inflammation, under the name ZILOSUL®.

Paradigm’s End of Calendar Year 2019 Update

Update on Clinical Development and Regulatory Milestones

  • Paradigm is proceeding with the provisional determination assessment process for approval of ZILOSUL® to treat knee osteoarthritis (OA) with subchondral Bone Marrow Lesions (BMLs), following meeting with the Therapeutic Goods Administration (TGA) on 11 November 2019.
  • Paradigm is set to meet the US FDA in February 2020 for a pre-IND meeting wherein the US FDA would provide feedback on the phase 3 OA clinical program in OA knee pain with subchondral BMLs.
  • In the first quarter of the calendar year 2020, the company is planning to submit a scientific advice application to the EMA (Europe) for discussions on its knee OA development program.
  • Besides, Paradigm is also preparing to submit a combined US FDA and EMA (Europe) joint parallel advice application for discussing its MPS Phase 2/3 Clinical Trial in the first quarter of the calendar year 2020.
  • Paradigm anticipates reporting a revised dataset for the SAS program on ~400 (cumulative) knee OA patients in the second quarter of the calendar year 2020.
  • The treatment program under the Expanded Access Program (EAP) of ten knee OA with BML patients is set to begin in January 2020.

Stock Information

On the stock front, PAR’s stock closed the day’s trading at $3.100, up 2.649% on 09 January 2020. The market capitalisation of the company stood at $594.64 million with 196.9 million outstanding shares.

Medical Developments International Limited (ASX: MVP)

Australia-based Medical Developments International Limited (ASX: MVP) is a provider of emergency pain relief and respiratory products. MVP manufactures a fast-acting trauma & emergency pain relief product, named as Penthrox®.

Penthrox Receives Marketing Authorisation in Russia

In December 2019, the company’s Penthorax Marketing Authorisation Application (MAA) which was submitted for review to the Russian Ministry of Health in September 2019, was accepted after a two-month validation period.

MVP had been advised that no additional clinical work is needed in Russia. It was also informed that the Ministry of Health plans to review the same “Clinical, Safety and Efficacy” data, which MVP used to underpin the Penthrox approval in Europe and elsewhere.

It is important to note that MVP’s MAA application to the Ministry of Health is for Penthorax to be approved for Trauma Pain.

Stock Information

On the stock front, MVP’s stock closed at $8.830, up 0.569% on 09 January 2020. The market capitalisation of the company stood at $576.03 million with 65.61 million outstanding shares.


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