Scott Power: ASX health stocks fall in ‘lacklustre week'

News.com.au

5 hours ago

ASX heath sector falls 1.1% over past five days
The US FDA approves CSL's Andembry to prevent attacks of hereditary angioedema
Clever Culture systems records its second consecutive quarter of positive cashflow operations
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.
The ASX healthcare sector has had what Morgans' senior healthcare analyst Scott Power described as a "lacklustre week".
At lunchtime on Friday, the S&P/ASX 200 Health Care index (ASX:XHJ) was down 1.1% for the past five days, while the benchmark S&P/ASX 200 (ASX:XJO) fell 0.55% for the same period.
Markets have been influenced by global economic and geopolitical concerns, particularly escalating tensions between Iran and Israel.
And it seems US President Donald Trump has not backed down from tariffs on pharmaceutical imports.
A United States Department of Commerce investigation is underway under Section 232 of the Trade Expansion Act of 1962 – a provision that allows the president to restrict imports if they are deemed a threat to national security.
Returning from the G7 Summit in Canada Trump reportedly told media on Air Force One tariffs on the sector were coming.
"We're going to be doing pharmaceuticals very soon," he said.
"That's going to bring all the companies back into America... at least partially back in."
Power said Trump's latest comments were adding further jitters to the sector.
"Until we get clarity there's going to be volatility," he said.
Power's Powerplay – CSL gets FDA approval for Andembry
The ASX's largest healthcare stock CSL (ASX:CSL) has notched a milestone with the FDA approving its Andembry (garadacimab) to prevent attacks of hereditary angioedema (HAE).
Affecting about one in 50,000 people CSL said HAE was the first and only treatment targeting factor XIIa for prophylactic use to provide sustained protection from attacks of HAE in adult and pediatric patients aged 12 years and older.
The approval was based on a pivotal phase III (VANGUARD) trial and ongoing open-label extension study, showing Andembry reduced the median number of HAE attacks by more than 99% (mean 89.2%), compared to placebo.
Andembry is also the only treatment to offer once-monthly dosing from the start for all patients and is administered via an autoinjector.
The drug is already available in Australia, the UK, EU, Japan, Switzerland and UAE.
CSL said Andembry will be launched "immediately", with availability through third-party specialty pharmacy network before the end of June.
In a note to clients, Morgans' healthcare analyst Derek Jellinek wrote that while Andembry's US approval had taken longer than expected, with application filing in December '24, it's good to see the drug greenlit before the end of '25 "despite the ongoing tumultuous environment" at the US Food and Drug Administration at the agency.
"We view Andembry's unique MOA (ie upstream inhibition of key pathways leading to HAE attacks, so broader applicability), favourable safety profile and convenient dosing (every 4 weeks via subcutaneous injection) as key differentiators," Jellinek wrote.
While Andembry is expected to impact Berinert sales – CSL's treatment for acute HAE attacks – Jellinek believes the effect should be modest.
He wrote Berinert's revenue was forecast to remain steady in FY25 at US$242 million, accounting for less than 2% of CSL's total revenue. Sales are projected to ease slightly to US$230m in FY26 and US$225 million in FY27.
However, this is more than compensated by anticipated growth in Andembry sales, which are expected to reach US$120m in FY26 and increase to US$220m in FY27.
Morgans has an add rating on CSL and 12-month target price of $329.26.
Clever Culture Systems delivers clever Q3 FY25 result
Clever Culture Systems (ASX:CC5) has achieved its second consecutive quarter of positive cashflow operations with $500,000 net cash inflow in Q3 FY25 and is on track to achieve break-even or better for H2 FY25.
During the quarter Clever Culture continued to execute on its commercialisation strategy for its APAS Independence instruments
in the pharmaceutical market, building on success with big pharma companies Astra Zeneca and Bristol Myers Squibb (BMS).
The instruments use artificial intelligence and machine learning software to automate the imaging, analysis and interpretation of microbiology culture plates.
Since launching the product in March 2024, Clever Culture said it had completed sales and received orders from pharmaceutical customers for 13 APAS instruments, representing ~$6 million in revenue with a pipeline of 40 qualified opportunities.
Clever Culture finished Q3 FY25 with a cash position of $2.2m.
"Other top 10 pharmaceutical companies are expected to engage with CC5 following the AstraZeneca and Bristol Myers Squibb success," Power said.
Emvision awarded $5 million government grant
EMVision Medical Devices (ASX:EMV) has been awarded a $5 million federal government grant to further development of its First Responder portable brain scanner.
The funds are by way of an Australian government Industry Growth Program (IGP) Commercialisation and Growth Grant.
First Responder is EMVision's second product and distinguishes between bleed and clot strokes at the scene and is designed to be used by ambulances and by paramedics.
The device should shorten diagnosis time, a crucial element in the patient getting the right treatment.
EMVision's first commercial device – the emu bedside brain scanner – is also designed to rapidly diagnose stroke at the point-of-care with a pivotal trial underway to supports US Food and Drug Administration (FDA) de novo (new device) clearance.
Audeara hits record, Micro-X gets milestone payment boost
In other news of the week, specialist in listening solutions for people with hearing challenges Audeara (ASX:AUA) has delivered record revenue exceeding $3.64 million for the 11 months to end of May FY25.
Audeara reported revenue for the 11-month period was up 14% on FY24 total revenue and 25% on FY23, which the company said signalled underlying strength of its ongoing operations.
The company expects additional growth to materialise in coming weeks based on strong June 2025 trading.
And leader in cold cathode x-ray technology for health and security markets Micro-X (ASX:MX1) has received $2.3 million in milestone payments for two projects.
MicroX achieved milestone three under its development agreement with US Advanced Research Projects Agency for Health (ARPA-H) and Department of Homeland Security (DHS) for a full body CT scanner, delivering $1.4 million.
The company also achieved milestone two under a strategic partnership deal with Billion Prima for a baggage and parcel scanning unit due for completion in 2025, delivering $900,000.
"We are pleased to continue to deliver strong progress on these key development contracts with ARPA-H, DHS, and Billion
Prima respectively, which is a testament to our focus and timely delivery on key projects," Micro-X CEO Kingsley Hall said.
"We are also well advanced with the final stages of our Head CT development as we prepare to enter human imaging trials."
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