Lens on ASX-listed animal health players -AHX, CP1, EOF, PAA

Summary

• The pet care and animal health market is growing owing to the increased adoption of pets in Australians households, creating business opportunity for the animal healthcare players
• While Apiam Animal Health Limited experienced robust performance during Q3 FY20 despite the broader global challenges, CannPal Animal Therapeutics highlighted strong cash position
• Ecofibre also cemented its balance sheet by securing a term loan of $10 million to continue its growth strategy through a potential extended period of market volatility
• PharmAust, which is evaluating Monepantel (MPL) indicated for lymphomas and other cancers in companion animals, is also announced positive results regarding effects of monepantel and monepantel sulfone on cells infected with SARS-CoV-2 in tissue culture

The animal health system of Australia includes all government agencies, commercial companies, organisations, universities as well as individuals who are involved in the livestock production chain. Australian government is responsible for international animal health matters, which including quarantine, export certification and trade, and disease reporting to the World Organization for Animal Health (OIE). Australia is a strong contributor to OIE processes to protect its animal health status and substantial trade in animals and animal products.

According to a report by Animal Medicines Australia (AMA), almost two-thirds of Australian households have a pet with 40% of households owns at least one dog. Cats and fish follow digs as the most popular pet animal after dogs with 27% households owning at least one cat and 11% household owning fishes. Most of the pet owners treat their kitty or canine as their child and spend significantly for their wellbeing, driving the growth of the pet health market. To capitalize on this growing market, apart from traditional animal health companies, new medications and supplements have emerged in the cannabis pet health industry.

Let us lens over on some of ASX-listed animal health players with their recent updates:

Do Read: How Animal health products of Creso Pharma are poised for robust growth?

Apiam Animal Health Limited

Apiam Animal Health Limited (ASX: AHX) is engaged in the provisioning of veterinary products and services to production and companion animals. The company recently announced that 920,622 ordinary shares have been released from voluntary escrow on 9^th June 2020.

Robust Operational Performance during Q3 FY20

During the three months ended 31^st March 2020, the company experienced robust performance in its operations. Unaudited revenue for the Q3 FY20 amounted to $31.2 million, reflecting a rise of 16.2% over Q3 FY19.

• March YTD 2020 (14^th April 2020) revenue stood at $87.4 million with a rise of 5.4% over pcp.
• Unaudited gross profit the period amounted to $17.3 million with an increase of 29.5% over Q3 FY19.
• Performance of Q3 FY20 was assisted by a strong performance in March 2020 with growth being achieved in all its animal segments despite the broader global challenges.

Do Read: How these healthcare stocks are performing amid coronavirus?

The company added that the new business lines are delivering strong financial contributions, as improved animal biosecurity practices and COVID-19 business practices have increased. AHX is optimistic about long-term industry outlook for Australia’s production and companion animal sectors.

At the close of session, the stock of AHX stood at $0.460 per share, as on 3 Jul 2020. The market capitalisation of AHX stands at $54.8 million.

CannPal Animal Therapeutics Limited

CannPal Animal Therapeutics Limited (ASX: CP1) is engaged into research and development of animal health products. The company has adapted its research programs in order to reduce the impact of coronavirus throughout its program of works to complete its milestones.

CP1 has continued to make progress in all key milestones for CPAT-01, lead drug candidate of CP1, which is in the development for the control of pain and inflammation associated with osteoarthritis.

The Company closed the quarter with a cash balance of $2.42 million with operating outflows amounting to $594k with $489k related to the costs associated with the research and development of its lead pharmaceutical and nutraceutical drug candidates.

At the close of session, the stock of CP1 stood at $0.120 per share, as on 3 Jul 2020. The market capitalisation of CP1 stands at $ 10.71 million.

Ecofibre Limited

Ecofibre Limited (ASX: EOF) is engaged in the breeding, growing, processing as well as distributing hemp products. The company also produces nutraceutical products for human and pet consumption in the US through its Ananda Health business.

Recently, the company announced that it has obtained a term loan amounting to A$10 million. As per the recently quarterly rebalance of S&P Dow Jones Indices, the company has been added to All Ordinaries, which became effective on 22^nd June 2020.

In another update, the company highlighted that the latest crisis in the US would impact near term sales in its core Ananda Health business. The early stages of re-opening of economy has commenced in the US. EOF continues to work towards achieving its expected accounting profit. On the outlook front, the company has suspended its guidance for 2H FY20 due to high degree of uncertainty on business re-openings that impact US sales.

At the close of session, the stock of EOF stood at $2.52 per share as on 3 Jul 2020. The market capitalisation of EOF stands at $755.87 million.

Pharmaust Limited (ASX: PAA)

Pharmaust develops its own drug discovery intellectual property for the treatment of different types of cancers in humans and animals. The company provides highly specialised medicinal and synthetic chemistry services on a contract basis to clients. PharmAust is evaluating Monepantel (MPL) indicated for lymphomas and other cancers in companion animals.

In June 2020, the company announced positive results regarding effects of monepantel and monepantel sulfone on cells infected with SARS-CoV-2 in tissue culture. The company started working with the Walter and Eliza Hall Institute of Medical Research to test the effects of its primary drug candidate MPL on the SARSCoV-2 virus that causes COVID-19 infections in the month of April 2020.

PAA, together with the Walter and Eliza Hall Institute, would conduct a comparative analysis with MPL and other mTOR inhibitors like rapamycin and current anti-viral drugs authorised by the FDA for emergency use to treat COVID-19, such as remdesivir.

At the close of session, the stock of PAA stood at $0.24 per share, as on 3 Jul 2020. The market capitalisation of the PAA stands at $63.42 million.