The ASX healthcare sector flexed its muscles in a week of volatility for global markets. Pic: Getty Images

ASX healthcare is up 3.64% in past five days while broader market up 0.76%
Cogstate reports strong start to FY27 with more than $25 million in new contracts during quarter 
Clever Culture expands reach across North American and Singapore pharmaceutical manufacturing markets

 

Healthcare and life sciences expert Scott Power, a senior analyst at Morgans Financial for 29 years, and his team share their insights on the ASX healthcare sector for the week.

The ASX healthcare sector has risen this week as geopolitical, economic and AI jitters caused volatility on broader markets globally.

The XHJ has moved up 3.64% over the past five days, while the benchmark S&P/ASX 200 (ASX:XJO) was up 0.76%.

However, Morgan’s senior healthcare analyst Scott Power said healthcare’s recovery was coming under increasing pressure.

“With the rising bond yields around the world and sell off in a lot of the big tech names, the market is looking pretty soggy,” Power said.

“We always look to a Christmas rally but my view is starting to soften.”

Power doesn’t believe we’ve got to the peak of interest rates yet in Australia and the US.

“Until there is clarity around how high they’re going to go equity markets are probably going to stay pretty soft,” he said.

“That is a change to what we have said over the last couple of weeks where we’ve been more optimistic toward a rally heading into the year.”

 

Cogstate signs $25m in new contracts

Neuroscience tech company Cogstate (ASX:CGS) has had a strong start to FY27, signing US$25.1 million in new sales contracts in the first quarter, up 17% on the prior corresponding period.

Contracted revenue rose 41% to US$143.7m, with FY27 contracted revenue increasing to US$56.8m, strengthening revenue visibility into FY28 and beyond.

CGS manages cognitive endpoints on behalf of pharmaceutical companies, using a combination of technology and human services to ensure the quality of data collected at clinical trial sites for Alzheimer’s and other neurodegenerative diseases.

“The result was driven by major wins in mood disorders, including five Phase III bipolar and depression studies, with over 80% of contract value coming from these programs,” Power said.

“The company highlighted the success of its channel partnership strategy in winning large studies.”

Power said the Q1 result was solid and sets CGS up well to achieve EPS growth of greater than 25% for FY27.

“We forecast US$100m on new contracts for FY27, so $US25m for Q127 is on track and solid,”  he said.

“We expect ~25% of these contracts will be recognised as revenue in FY27.

“CGS already indicated at June 30, 2026 that US$48m in revenue will be recognised in FY27, therefore very much in line to hit our FY27 revenue of US$75m.”

Morgans has a buy rating on CGS and 12-month target price of $4.07.

 

Clever Culture expands reach with partnership

Clever Culture Systems (ASX:CC5) is expanding its reach across North American and Singapore pharmaceutical manufacturing markets through a new sales partnership with PSC Biotech.

Under the agreement, PSC Biotech will identify sales opportunities for CCS’s flagship APAS Independence automated microbiology platform across the US, Canada and Singapore.

APAS Independence is the only artificial intelligence (AI) technology cleared by the US Food and Drug Administration (FDA) for automated culture plate reading. The platform is used by pharmaceutical manufacturers to read environmental monitoring culture plates.

CCS has established the technology in the sterile drug manufacturing market over the past two years through a “land and expand” strategy targeting major pharmaceutical companies, including AstraZeneca, Bristol Myers Squibb, Boehringer Ingelheim, Pfizer, CSL and Thermo Fisher’s contract drug manufacturing organisation.

The partnership provides an additional sales channel to reach regional, medium-sized and large pharmaceutical manufacturers beyond CCS’s direct sales focus on global pharmaceutical companies.

PSC Biotech has more than 500 employees globally and serves more than 1000 customers, providing validation, engineering and regulatory consulting services to the pharmaceutical industry.

As part of the deal, PSC Biotech has committed to purchasing an APAS Independence instrument for installation at BioTechnique, its wholly owned contract drug manufacturing organisation in York, Pennsylvania.

The instrument will be qualified and validated onsite for good manufacturing practice (GMP) use, creating a live pharmaceutical manufacturing environment and a US centre of excellence for product showcases, customer demonstrations and prospective customer evaluations.

PSC Biotech will refer qualified sales opportunities to CCS, which will retain responsibility for closing sales, setting instrument prices and generating recurring software and service revenue. The partnership could also create opportunities for PSC Biotech to sell its validation services.

“The PSC Biotech is a new partnership, which complements CCS’s existing commercial strategy,” Power said.

“CCS’s strategy is to be the new standard for environmental monitoring in sterile drug manufacturing.”

 

Morgans downgrades EBR, cuts price target

Morgans has reduced its 12-month price target and rating on EBR after the company missed the broker’s expectations for implants of its WiSE wireless cardiac pacing system for heart failure in Q3 CY26.

EBR Systems completed 40 implants of WiSE in Q3, down 13% quarter-on-quarter.

Over the quarter purchasing agreements increased by five to 57, trained physicians grew by 10 to 100, activated hospitals rose by 10 to 40 with 20 sites completing three or more implants.

In a research note Morgans healthcare analyst Derek Jellinek wrote the shortfall appeared attributable to sales force disruption, a leadership transition, implementation of a refocused commercial strategy and additional field training.

“Notably, WiSE adoption requires a sustained, high-touch sales effort, with representatives previously focused on prioritising the opening of new sites rather than supporting existing accounts and generating repeat procedures,” Jellinek wrote.

CEO John McCutcheon has assumed responsibility for the commercial organisation while the company recruits a new commercial leader.

McCutcheon has made changes to the commercial team including promoting Michael Sot from area director to director of US Sales.

“Management is redirecting resources towards activated centres, strengthening territory accountability and changing its sales training model, with early feedback encouraging,” Jellinek wrote.

“We continue to see value in WiSE’s differentiated technology, clinical utility and substantial potential market opportunity.

“However, disappointing execution, greater commercial intensity and uncertain adoption trajectory warrant more conservative forecasts and a materially lower valuation.”

Morgans now has a speculative buy rating on EBR and has reduced its 12-month price target from $1.95 to $1.20.

 

 

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.

Disclosure: Scott Power owns shares in Cogstate and EBR Systems. Morgans Corporate Limited was joint lead manager to the placement of shares for EBR Systems in June 2026 and has received fees in this regard.

At Stockhead we tell it like it is. While EBR Systems and Clever Culture Systems are Stockhead advertisers, the companies did not sponsor this article.