Flick through healthcare stocks ECS Botanics (ASX:ECS) and MedAdvisor (ASX:MDR)

Summary

  • The year 2020, despite its challenges, has proved to be a boon for several businesses across the healthcare, technology, and e-commerce space.
  • ECS Botanics Holdings Ltd is progressing well with its medicinal cannabis facility in Tasmania; relaxation in THC cannabis regulatory framework to benefit ECS.
  • MedAdvisor Limited signed a deal worth A$2.6 million with a US-biotech player under which MedAdvisor would provide its product offerings for a year.
  • The MedTech company completed the acquisition of Adheris and reported stronger-than-expected H2 FY20 US results.

Industries such as healthcare, technology, and e-commerce have performed remarkably in 2020, withstanding the challenges posed by the COVID-19 pandemic. While some players did feel the impact of the novel coronavirus, several companies continued to perform well amid the difficult conditions.

Two healthcare companies - ECS Botanics Holdings Ltd (ASX:ECS) and MedAdvisor Limited (ASX:MDR) were seen trending on the ASX at the start of the week. Both the emerging players made important announcements regarding their latest developments to the joy of their stakeholders. Further, MedAdvisor came with another positive update regarding a new deal with a US-based biotech company.

ECS Botanics is an industrial hemp and medicinal cannabis business while MedAdvisor is a MedTech company globally renowned for its medication management platform. Let us look at the latest developments of these ASX-listed healthcare stocks.

ECS Botanics Updates about Regulatory Changes and Tasmanian Medicinal Cannabis Facility

ECS Botanics Holdings Ltd (ASX:ECS) has updated on the development of its medicinal cannabis facility in Tasmania, where the construction for main processing shed is complete, and the internal fit-out has been initiated. Further, ECS informed about the recent industry and regulatory advancements and the potential impact on its business.

In a favourable regulatory change for ECS, the Office of Drug Control (ODC) has made a significant structural change for the medicinal cannabis industry in Australia. Under the fresh guidance from the ODC, the framework for low THC medicinal cannabis has been downgraded, and the ODC has referred to state hemp licenses for cultivation security conditions.

ALSO READ: How these three ASX-listed Pot Producers Fared during the Pandemic - MXC, CPH, AGH

Now, these structural changes can only be utilised by companies which hold both the state industrial hemp licenses as well as ODC medicinal cannabis licenses.

        Cannabis player, ECS could benefit from regulatory changes (Image Source: Shutterstock)

While the highly regulated nature of the sector means there are significant barriers to entry, ECS is among the few companies that hold both sets of licenses. ECS remains optimistic that these changes shall allow it to progress towards developing a cannabis production system that utilises more of the plant, generating reduced wastage and further revenue opportunities.

Currently, ECS is engaged in investigating carbon abatement as well as additional revenue-producing opportunities in connection to complete plant utilisation, effectively closing the loop and reducing wastage.

Further, ECS believes that their business was positioned to align with the latest regulatory approvals two years ago and these changes are encouraging as the regulatory environment and opportunity have started to align, to meet the already declared business plan of ECS.

The Company is of the view that these changes shall allow it to scale production beyond its preliminary forecasts while operating in a way like the poppy industry of Tasmania.

ECS shall be able to minimise capex and drive down the cost per gram, which shall be a positive development for patients as well as ECS to develop market share in Australia and by way of export, primarily through the first-mover advantage. The Company looks to emerge as an excelling business in the international cannabis market.

On 27 November 2020, ECS share price last quoted at A$0.026 with a market capitalisation of A$15.23 million.

INTERESTING READ: Australian Medical Cannabis Industry – Lens on AGH, MXC, BOT

MedAdvisor signs a deal with US biotech firm; deliver stronger-than-expected US H2 results

Internationally renowned medication management platform, MedAdvisor Limited (ASX:MDR) announced a deal with a US-based biotechnology firm worth A$26 million for 12 months. The new agreement is a renewal of last year’s contract under which MDR will provide its product offerings to the biotech company.
         Image Source: © Kalkine Group 2020

MedAdvisor recently reported impressive H2 FY20 numbers for the US, exceeding expectations. In November 2020, MDR concluded the acquisition of Adheris, after which, the sales performance of the Company surpassed MedAdvisor’s preliminary anticipations for the second half of the year. This translates to 74% growth based on year-on-year performance for the four months ended 31 October.

Adheris’ higher than expected H2 results to-date till October were also significantly higher than the prior corresponding period. Revenue for the first four months of the second half of FY20 stood at US$$10.9 million as compared to US$$6.3 million for FY19.

Interesting Read: ASX-Listed MDR extends US Health Programs, Share Price up ~8%

Further, sales for the first four months of FY20 surpassed second half FY19 total sales of US$10.4 million.

The strong H2 performance was propelled by the developments in October, the biggest month in the past two years. Going forward, these results offer a robust platform for the Company setting the momentum to see out the remaining financial year.

The highly automated and intuitive software system of MedAdvisor allows users to connect to tools and education materials from their local/preferred pharmacy and the platform has connected more than 1.6 million users by way of a network of thousands of GPs and more than 60% of Australian pharmacies.

MedAdvisor is a growing business that has recently partnered with Zuellig Pharma in Asia, HMS in the US and introduced into the UK on track to become one of the largest players in the global digital adherence market. With this, MDR remains on track to emerge as one of the largest players in the international digital adherence market.

On 27 November 2020, MDR share price last quoted at A$0.390, up 1.298%. The Company has a market capitalisation of A$131.03 million.

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