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Australia has an ever-increasing demand for healthcare services, and for a hoard of investors, the healthcare industry is considered to be one of the best areas to invest in, for the long term. With a rising aging population, which is increasingly aware about health prospects, the sector has the potential to bring opportunities that could last decades.
Sector Performance
There are over 170 companies in the health care sector listed on the ASX and these can be segmented into two industry groups- Health Care Equipment & Services industry and Pharmaceuticals, Biotechnology & Life Science industry.
According to S&P Dow Jones Indices, the S&P/ASX 200 Health Care sector has delivered returns of 46.72 per cent in the past one year (as on 3 March 2020). After the close of the trade session on 3 March 2020, the index, XHJ, settled at 44,560, up by 1085.3 basis points or 2.44 per cent.
With this backdrop, let us discuss two healthcare stocks that have been trending due to their recent significant market updates.
AVITA Medical Enrols First Patient for Soft Tissue Reconstruction Pivotal Study
A regenerative medicine company with a tech-based platform positioned to address unmet medical needs in therapeutic skin restoration, AVITA Medical Limited (ASX:AVH) provides innovative treatment solutions derived from the regenerative properties of a patient’s own skin using its patented and proprietary collection and application technology.
The Company recently announced that it has enrolled the first patient at the Arizona Burn Center at Valleywise Medical Health Center in Phoenix, AZ, to initiate the pivotal study for soft tissue reconstruction.
The prospective multi-centre trial will involve a minimum of 65 patients and will run for 52 weeks.
The study will assess the safety and effectiveness of the RECELL® System when it is used as an adjunct to meshed autografts in patients experiencing reconstruction of skin defects (not related to a burn injury). Its key effectiveness endpoints comprise of superior donor skin sparing (assessed by comparing the actual expansion ratios of donor skin used to treat the wounds) and non-inferior incidence of healing (by 8 weeks after the treatment).
Blinded evaluation of scar outcomes and patient treatment preference will be the additional long-term safety and effectiveness data to be collated during the study.
The Company is keen to assess use of the RECELL® System to eventually lessen the amount of donor skin needed. The system is the Company’s first US product that secured FDA approval in the year 2018 and is designed to treat patients (18 years and older) with acute thermal burns.
Meanwhile, AVH’s management is due to attend the BTIG MedTech, Digital Health, Life Science & Diagnostic Tools Conference at The Cliff Lodge in Snowbird, Utah (18 March 2020- 19 March 2020).
CLINUVEL PHARMACEUTICALS - FDA to Discuss SCENESSE® Study for Vitiligo
A global biopharmaceutical company, CLINUVEL PHARMACEUTICALS LTD (ASX:CUV) is engaged in the development of treatments, designed for patients with a range of severe genetic and skin disorders. As a pioneer in the field of photomedicine, the Company recognises the interaction of light and human biology and its R&D has catalysed innovative treatments for patient population with a clinical need for re-pigmentation and photoprotection.
On 3 March 2020, the Company received confirmation that the US Food and Drug Administration (FDA) will discuss the North American development program for SCENESSE® for the pigment loss disorder vitiligo on 29 April 2020. Global vitiligo experts are expected to attend the meeting. The Type C meeting (CUV104 and CUV105) pertains to the proposed study protocol design in vitiligo and will be conducted in North America. The discussions during the meeting will focus on-
- Study protocol design
- Endpoints (study objectives)
- Final development leading to market authorisation
SCENESSE® will be used as combination therapy with narrow band UVB. However, ongoing safety and efficacy in the Company’s vitiligo program is pending, CUV seeks to make an sNDA (supplemental New Drug Application), to add a new indication towards the labelling of an approved drug in the United States, for SCENESSE®.
Dr Wright added -
Interestingly, after this update was released on the ASX, the Company garnered quite some investor attention, making CUV the third best gainer of the S&P/ ASX200 (stock up by 6.37 per cent).
In another recent update, being cognisant of worldwide concern about the spread of coronavirus and its impact on the health of the community, the Company notified that neither the drug substance nor the excipients of SCENESSE® are affected by coronavirus, which is a class 1 viral fusion protein and is not impacting the supply chain or manufacturing of SCENESSE®.
Stock Performance
Below table outlines performance of the discussed stocks, on 4 March 2020 (AEDT 01:43 PM).
