Scott Power: ASX health lifts to start FY26, Tetratherix ends IPO drought
Wound management house Tetratherix make its ASX debut and breaks an IPO drought for sector
ProMedicus surges past $300 for first time following two new US customer contracts worth a total $190 million
Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 27 years, gives his take on the ASX healthcare sector for the week and his 'Powerplay' stock pick.
Morgans' senior healthcare analyst Scott Power has started FY26 in an optimistic mood, noting that despite the global geopolitical and economic uncertainties of recent months, the market broadly has been powering through and hitting new highs across many sectors.
He noted healthcare was the laggard, with the S&P/ASX 200 Health Care Index falling 1.05% in June and down 6.64% YTD but said there was money flowing into the market more broadly.
"If you look across the market there's multiple capital raisings going on across different sectors," he said.
"That is suggesting people are feeling more confident and putting money to work."
Wound management house Tetratherix (ASX:TTX) made its ASX debut on Monday breaking an IPO drought for the sector and trading up to 13% above their $2.88 a share offer price.
Tetratherix is the first life sciences IPO since late November 2024, when cryogenics play Vitrafy Life Sciences (ASX:VFY) and nerve repair house ReNerve (ASX:RNV) listed on the same day.
Barrenjoey Markets and Morgans Financial were joint lead managers and underwriters to the Tetratherix IPO.
The S&P/ASX 200 Health Care index (ASX:XHJ) was up 1.6% for the past five days, while the benchmark S&P/ASX 200 (ASX:XJO) rose 0.6% for the past five days.
"Over the past couple of months it has been pretty downbeat but it certainly feels a lot more upbeat, particularly since the end of the financial year and all the tax loss selling out of the way," Power said.
ProMedicus surges past $300 on contract wins
Health imaging stock ProMedicus (ASX:PME) surged ~10% on Thursday to rocket past $300 for the first time after announcing two new US customer contracts worth a total $190 million.
The first win is a $170 million, 10-year contract with Colorado-based UCHealth, for the company's suite of image viewing and storage tools.
The deal expands Promedicus into cardiology imaging, one of the adjacent 'ologies' the company had been targeting.
UCHealth is a Colorado-based network of 14 hospitals, with affiliate clinics extending into Wyoming and Nebraska.
Louisiana-based Franciscan Missionaries of Our Lady Health also renewed an existing contract for $20m, over five years.
The deal renews a contract for the company's Visage 7 viewer, at a higher per-transaction fee. It also provides the merciful missionaries with Visage 7 Open Archive, which offers 'best-in-class interoperability'.
The UCHealth contract is ProMedicus' largest deal to date and follows a $330m, 10-year agreement signed in November with Trinity Health, one of the largest not-for-profit healthcare systems in the US.
"This company just goes from strength to strength and with the share price currently above $300 it has more than recovered from the wobbles it had in April when US President Donald Trump announced the tariffs," Power said.
Morgans maintains a trim rating on ProMedicus and increased its 12-month target price from $250 to $280.
"We view PME as one of the highest quality businesses on the ASX with high margins and long contracted revenue base, providing significant baseline earnings support," healthcare analyst Iain Wilkie wrote in a note to client.
"We have a DCF valuation of A$280 p/s and with shares trading above this level, we advocate for active investors to TRIM overweight positions."
Power's Powerplay – Micro X pivots to focus on medical applications
Leader in cold cathode x-ray technology for health and security markets Micro-X (ASX:MX1) is Power's pick of the week.
Power said the company had recently raised capital, added a strategic investor and realigned its business to focus on medical imaging, deprioritising security and defence.
He said the realignment made sense and the business was funded to execute on the strategy.
"It's early days in the realignment and customer receipts from imaging are still modest, although a major US hospital is evaluating the Rover+ mobile x-ray unit which could result in material sales over time," he said.
Morgans has a speculative buy rating on Micro X and 12-month target price of 17 cents.
Underperformers selling up assets
Power said there were underperforming companies across the ASX healthcare sector, which were looking to, or have managed to, sell their primary assets.
He said examples were Next Science (ASX:NXS) and MedAdvisor (ASX:MDR).
Next Science has entered a binding asset purchase agreement to sell substantially all its assets for US$50m to Demetra, an Italian based healthcare company.
The directors have unanimously recommended shareholders vote in favour of the proposed transaction.
Assuming the transaction is completed at an EGM on August 14 and after repayment of debts and other costs, NXS will distribute remaining funds to shareholders estimated to be US$30m (~15 cents per share).
MedAdvisor has entered into a binding share sale and purchase agreement to sell its ANZ business division and associated intellectual property to Jonas Software AUS Pty Ltd – part of multinational Constellation Software for $35m.
"In both cases from a share price perspective they have significantly underperformed for a long time and the decision has been made, in my opinion correctly, to find a buyer," Power said.
"Albeit, shareholders will have lost money but it's better to at least get something rather than let the value of the business deteriorate more.
"I wouldn't be surprised if there are more companies which follow that path as across the life science sector there has been dozens of companies which have had massive share price underperformance."
EMVision makes progress on key trials
EMvision Medical Devices (ASX:EMV) announced this week five of the six sites were now enrolling and scanning patients in the pivotal validation trial for its first commercial device – the emu point-of-care bedside brain scanner for stroke diagnosis.
EMVision said the site initiation visit and device training at the third US site for the pivotal trial – designed to support US Food and Drug Administration (FDA) de novo (new device) clearance for emu – at the Mount Sinai site in New York was a success, with recruitment underway.
The sixth and final site, on the west coast of the US, for the pivotal trial is expected to be announced shortly. The trial has an estimated enrolment period of 6-12 months, followed by analysis and reporting of the clinical data.
EMVision said in parallel it was also undertaking cost-effective strategy for continued device innovation, algorithm enhancement and data to support indication expansion to traumatic brain injury.
Referred to as EMVision's Continuous Innovation Study the initiative has received ethics approval received to start scanning patients with suspected stroke or traumatic brain injury at Brisbane's Princess Alexandra Hospital and John Hunter Hospital in Newcastle shortly.
"EMVision is making good progress," Power said.
Neurizon signs global licensing deal with NYSE-listed Elanco
Neurizon Therapeutics (ASX:NUZ) has entered an exclusive global licensing deal with New York Stock Exchange-listed Elanco Animal Health Incorporated and affiliates for monepantel, the active pharmaceutical ingredient in its lead drug NUZ-001.
Neurizon said the licensing deal strengthen its strategic outlook for development, manufacturing and potential future commercialisation of NUZ-001, which is in development for the most common form of motor neurone disease (MND) called amyotrophic lateral sclerosis (ALS) and other neurodegenerative diseases.
The company said the licensing agreement also strengthens its regulatory position by providing ongoing access to essential animal safety and manufacturing data — both critical pillars for advancing clinical trials, securing potential regulatory approvals, and enabling global market entry.
In a note to client Wilkie said Neurizon was a strong proposition in the rare disease space with significant near-term catalysts in a condensed timeframe and precedent for an accelerated approval pathway.
"While considerable clinical risk remains, we view NUZ-001 as a drug with a sound scientific basis in ALS, strong safety profile, and promising hint of potential efficacy above existing treatments," he wrote.
Morgans has a speculative buy rating on Neurizon and 12-month target price of 42 cents.
The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.
Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
At Stockhead, we tell it like it is. While EMVision and Neurizon are Stockhead advertisers, the companies did not sponsor this article.
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