Trillium Therapeutics and WELL Health: 2 COVID health stocks to explore in October

Summary

• The COVID pandemic has forced the worldwide health care sector to embrace digitalization and telehealth services.
• Trillium Therapeutics (TSX:TRIL) and WELL Health Technologies (TSX:WELL) are two Canadian health care stocks that have performed well this year.
• Trillium’s stock has gained massive 1260+ per cent this year.
• WELL Health stock is up 288 per cent year-to-date.

COVID-19 has upended the world economy. And along with it, the health care sector. The unprecedented times have forced health care systems to embrace digitalization and tele-health services, sparking a positive trend worldwide. While the overall sector has registered some lows due to the pandemic and social distancing rules, innovative firms such as Trillium Therapeutics (TSX:TRIL) and WELL Health Technologies (TSX:WELL) have posted good results.

The TSX health care index is currently down 40.12 per cent this year. The sector’s biggest challenge is to leverage data by solving problems hampering the seamless running of digital health technologies, says the Future Health Index 2020 report. As the doctors and caregivers battled COVID from the frontlines, the importance of telehealth overtook Artificial Intelligence (AI), emerging as the top digital necessity in current times. Nearly 61 per cent of young doctors listed telehealth as the primary digital health technology that will improve experiences during COVID-19, added the report.

Let us look at the performances of Trillium and WELL Health stocks:

Trillium Therapeutics Inc (TSX:TRIL)

TSX Stock Price (Current): C$ 18.14

Trillium Therapeutics is the top performing stock on the Toronto Stock Exchange’s (TSX’s) Top Healthcare list. It is also among the top price performing stock on the key Canadian stock exchange, as per data provided by TSX.

This clinical stage immuno-oncology company’s stocks have surged by a massive 1260+ per cent year-to-date (YTD), gaining ground on the Canadian health care recent sector’s surge amid COVID-19. The scrips have gained 65 per cent in three months and rose by nearly 35 per cent in one month.

Trillium focuses on developing innovative therapies for cancer treatment, including two key clinical programs – TTI-621 and TTI-622. The company’s current market capitalization is C$ 1.5 billion.

In September, US pharmaceutical company Pfizer made US$ 25-million equity investment in the company, invoking investors’ interest in the stock. The company also closed the public offering of 11,500,000 common shares, raising US$ 149.5 million (gross proceeds). The net proceeds will be used for clinical trials, drug supply, working capital and general corporate purposes.

Trillium’s net loss in second quarter 2020 results (ending 30 June 2020) was US$ 122.5 million. It ended the quarter with cash and cash equivalents and marketable securities of US$ 130.8 million, as compared to US$ 22.7 million on December 31, 2019.

WELL Health Technologies Corp. (TSX:WELL)

WELL Stock Price (Current): C$ 7.11

WELL Health, which operates as an omnichannel health hub, has been doing well in the pandemic times. Its market cap has jumped from C$ 410 million to C$ 989.51 million within three months.

WELL stocks have seen a remarkable 288 per cent growth this year. The stock has gained over 148 per cent in the last three months and nearly 47 in one month.

The company offers a range of digital and teleservices to patients and operates physical clinics. Its Electronic Medical Records (EMR) business has been gaining steam. The company claims to be the third largest EMR provider in Canada.

Well Health operates a telehealth and virtual care app VirtualClinic+ and is a majority owner in Spring Medical Clinic and SleepWorks Medical. The company recently launched a digital health app called "apps.health", which is a marketplace platform for EMR users.

As per Canadian Institute for Health Information, the country’s care delivery sector was at C$ 264 billion in 2019 and is further expected to grow under the current pandemic conditions. Well Health, with its innovative digital offerings in health care, intends to grab a lion’s share of this industry. It aims to consolidate and transform Canada’s primary health care segment with innovative technologies and improve patient experience and operational efficiency.

WELL Health has acquired 11 companies since 2018 and three equity investments. In its digital portfolio, the company also acquired four EMR providers in 2019, – NerdEMR, OSCARprn, KAI Innovations, and OSCARwest.

(Source: WELL Health Technologies’ investors deck)

WELL Health’s was recognized as a TSX Venture 50 company in 2018, 2019 and 2020. It graduated to the TSX Exchange in January 2020. Its current price-to-book ratio is 17.775 per cent and price-to-cash flow ratio is 28.1 per cent.