Healthcare Stocks under the spotlight – PNV, 4DX, CGS, ECS, IDT, EMV

Summary

  • The stock market has been declining almost every day in the last days of October, wiping off huge gains.
  • However, the healthcare sector was steadily registering strong gains over ‘medically vulnerable’ times.
  • Healthcare stocks such as Polynovo, 4DMedical, CogsState Limited, ECS Botanics Holdings Ltd, IDT Australia Ltd and EMvision Medical Devices Ltd were noted as the gainers of the week. 

The week ending on 30 October 2020 witnessed ASX declined to three-week low point amid a global coronavirus selloff. The market has dropped almost every day, wiping down all the profits it churned out in the early trading days of October. But one sector besides technology was slowly and silently registering down profits. Healthcare, one of the biggest and most complex sectors, comprising of a broad range of companies selling medical products and services, devices and insurance, was one of the segments of the ASX market that kept holding the investors.

Let us look at few healthcare winners, who showed resilience in the market during October.

Polynovo Limited

Polynovo Limited (ASX:PNV) gained as much as 12.03% in last week of October and 22.17% in one month, closing the trading session at A$2.600 per share on 30 October 2020. 

Polynovo, a medical device company, specialises in dermal regeneration products development. The company, on 28 October, acquired Taiwanese Food and Drug Administration (FDA) approval for its dermal scaffolding product NovoSorb BTM. The company made a contract with Taiwan based distributor, Evermed, to sell BTM. Taiwan, with an advanced health system, boasts of a potential dermal matrix market that provides the company opportunity of growth in the areas of reconstructive surgery, trauma and burns.

PolyNovo Managing Director Paul Brennan shared in the announcement that the approval is an exciting development for PolyNovo. 

A number of probable significant developments that could further garner gains for Polynovo are approval for the sale of NovoSorb BTM in the Korea market, the launch of BTM into European markets, development of NovoSorb-based breast reconstruction products and NovoSorb-based hernia device. 

Recently, as it’s distributor in Greece, PolyNovo appointed Biogenesys which has an established network catering to leading hospitals and surgeons.

With a market capitalisation of A$1.63 billion, PNV closed at A$2.55 per share on 3 November, up 2.822% from the previous close. 

Also read: How are developing world economies preparing for Covid-19 vaccine deployment and testing?

4Dmedical Limited

4Dmedical Limited (ASX:4DX) gained 10.85% in the past week while rose by 38.24% in October, closing the trading session at A$2.310 on 30 October 2020. 

Recently, the Melbourne-based MedTech player, 4DMedical, received the US FDA approval for its XV Technology that diagnoses functional lung impairment through a 4D assessment. 

4DMedical is involved in creating respiratory imaging solutions that assist doctors in effectively identifying and treating patients suffering from respiratory diseases.

It's successful listing on the ASX in August 2020 and raising $55.79 million from existing and new investors at an issue price of $0.73 per share was also in the news. 

The company reported a strong cash position of $48.09 million as on September 2020. 

Also, Australian TGA approval secured for 4DMedical’s first Software-as-a-Service (SaaS) offering, XV Lung Ventilation Analysis Software (XV LVAS), bringing forward Australian market entry by six months. 

The company is focused on the US market. It believes that there is significant potential and, according to some estimates, it indicates that the country spends nearly US$14 billion annually on respiratory diseases. Also, the worsening Covid-19 situation will create further opportunities for lung imaging diagnostic technologies. 

With a market capitalisation of A$582.47million, 4DX closed at A$2.170 per share on 3 November, down 1.364% from the previous close. 

Do read: Australian government prioritises mental health; a booster shot for some stocks

CogState Limited

A leading neuroscience technology company, CogState Limited (ASX:CGS) gained an unprecedented 40% in the past week and registered record 57.75% profits in October, closing the trading session at $1.100 on 30 October, 2020. 

CogState enhances brain health assessments by providing quick, reliable and super-sensitive computerised cognitive tests. 

As the country is becoming progressively conscious of mental health, the mental health market looks promising for companies like CogState. The Federal Budget presented by Josh Frydenberg has also devoted an unparalleled $5.7 billion for addressing the issue of mental health in Australia, adding much traction to the said market.

On 26 October, CogState extended its global agreement with Eisai, a Japanese pharma company, to develop CogState’s digital cognitive assessment tools. The agreement provides  Eisai exclusive development and commercialisation rights in Japan for all CogState-developed cognitive function tests. 

Under the license, Eisai will pay CogState minimum payments totalling US$45 million across ten years, including a US$15 million upfront license fee and US$30 million royalties. 

For the quarter ended 30 September, CogState executed US$8.3 million of clinical trials sales contracts, around 8% better than the previous corresponding period. Overall revenue was up 22% on the earlier corresponding period. 

With a market capitalisation of A$188.83 million, CGS closed at A$1.085 per share on 3 November, down 2.253% from the Previous Close. 

ECS Botanics Holdings Ltd

ECS Botanics Holdings Ltd (ASX:ECS) rose 15.38% in the past one week while gained 20% in October, closing the trading session at A$0.030 on 30 October, 2020. 

One of the top gainers of the week, ECS Botanics Holdings Ltd is an early-stage agribusiness and food company that focuses on industrial hemp. 

The company provides bulk hemp seed oil, bulk dehulled hemp seeds, bulk hemp protein powder and bulk hemp floor. Besides, the company also offers various flavoured soups, boosters and protein mixes. 

ECS Botanics is executing on its medicinal cannabis development strategy, with the project currently under construction on its farm in Northern Tasmania. The company is building a large processing facility to accommodate a major scaling in production and setting up the propagation and cultivation. The company is in discussions regarding offtake for stage 1 of the medicinal cannabis production. The company recorded 53% quarter on quarter increase in cash receipts.

The company recently signed a collaboration deal with the Essential Oils of Tasmania. Also, the company appointed Damian Wood as director of medicinal cannabis production. 

With a market capitalisation of A$15.78 million, ECS closed at A$0.027 per share on 3 November. 

Also read: ResApp Health partners with Australia’s biggest consumer healthcare network

IDT Australia Limited 

IDT Australia Limited (ASX:IDT) gained 12.90% in last week and 6.06% in October, closing the trading session at A$0.175 on 30 October, 2020. 

Victoria based pharmaceutical company, IDT Australia traces its roots back to 1975 as Institute of Drug Technology Limited (IDT). IDT produces high potency API products and finished dose products along with  microbiological and analytical testing and pharmacy services. 

Globally acknowledged pharma companies like Pfizer, Roche, Teva and Bayer are partners of choice for IDT. 

Notably, in the past three years, the company has grown up to 130.26%.

The company kept its GMP pharmaceutical manufacturing facilities and laboratories fully operational during the COVID-19 crisis, with business remained in operation with minimal disruption.

With a market capitalisation of A$41.73 million, IDT closed at A$0.180 per share on 3 November, up 2.857% from the Previous Close. 

EMvision Medical Devices Ltd 

EMvision Medical Devices Ltd (ASX:EMV) gained 11.30% in last week and 22.64% in October, closing the trading session at A$3.250 on 30 October, 2020.

EMvision Medical Devices is an Australian medical device company engaged in developing a portable brain scanner for rapid, point of care, stroke diagnosis and monitoring. The Queensland-based company reported promising data from a pilot clinical trial utilising a prototype of its portable brain scanner to diagnose ischaemic or haemorrhagic stroke. The EMVision device provides 93.3% and 96% accuracy in classifying stroke type.

The primary endpoint was to produce datasets which would enable EMvision to advance the development of its imaging algorithm and observe the correlation of scans from its product with computerised tomography and MRI. Operators and patient participants provided positive feedback on all scans. 

With a market capitalisation of A$231.70 million, EMV closed at A$3.300 per share on 3 November. 

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