EOFY specials: these healthcare beauties might have a bit on the clock, but there’s plenty of life in them yet if you keep the oil topped up. Pic: Getty Images.
Led by the top end, life sciences stocks enjoyed a much-needed bounce in June
I got my money in the pocket, says Echo IQ – and a bit of investor love
Biome is quick off the EOFY mark with revenue update
Having underperformed the broader markets for the last 12 months, the ASX healthcare and biotech sectors bounced strongly in June, led by names such as Cochlear (ASX:COH) , CSL (ASX:CSL) and Ramsay Health Care (ASX:RHC).
Broker UBS describes the recovery as broad based.
“There was limited company specific news to explain this recovery, suggesting it was due to broader market forces including sector rotation,” the firm says.
“The uplift was correlated with the US biotech index.”
The S&P/ASX200 healthcare index bounced 15%, trimming the calendar year to date loss to 22%. The sector still drooped 37% in the financial year.
The Nasdaq biotech index jumped 11.6% for the month, taking the financial year gain to 55%. It’s not quite comparable to the ASX healthcare gauge, which consists of established stocks.
Pro Medicus (ASX:PME) shares led the charge, up 40% for the month. This was on the back of ongoing US client wins and abating fears about SaaScopalypse Now (or even later).
Cochlear shares bounced 20%, spurred on by … nothing in particular.
As we reported yesterday, US consumer confidence remains poor and that may affect the company’s US hearing implant sales further.
Similarly, CSL shares recovered 22 percent, despite no sign of market conditions improving. In some respects, the signs are worse.
Put in context, both stocks swooned 60% and 52% respectively over the financial year.
The country’s biggest private operator, Ramsay enjoyed a 20% bounce. The company is benefiting from better pricing dynamics and expectations it will shed its laggard French arm Santé Health.
Or should that be not-so-Santé Health?
Shares in pathology chain Sonic Healthcare (ASX:SHL) popped up 8%, despite headwinds including wages pressure and what UBS dubs “challenging competitive dynamics”.
Echo IQ seals capital raising deal
Ahead of expected FDA clearance for its most important heart disease detection device, Echo IQ (ASX:EIQ) has raised circa $110 million in an institutional placement.
The company did the deed at $1.45 a share, a defendable 8.8% discount to last Friday’s frozen price.
With no share purchase plan or rights issue, retail investors dip out. C’est la vie.
Perhaps unusually, the company did not piggyback on the pending FDA decree so it could raise at a (presumably) higher price.
Echo IQ will use the funds to roll out its AI-enabled Echosolv tools in the US. The FDA already has green-lighted its aortic stenosis detection module, Echosolv AS.
Echo IQ shares last week spurted after Pro Medicus said it would invest $10-20 million in the company and resell the Echosolv products to its expansive customer base.
The company also has a commercial tie-up with the esteemed Mayo Clinic.
Echo IQ shares this morning defied the usual post-raising lull, with the shares down around 1%.
The stock has spurted 560% over the last financial year.
The shares to be issued equate to 11.5% of Echo IQ’s current issued capital.
Biome in bullish sales update
Even before the EOFY balloons and streamers have been taken down, Biome Australia (ASX:BIO) reports record revenue for the stanza as its probiotic supplements walk off the shelves.
Ahead of August’s formal full-year reveal, Biome says it chalked up $23.9 million of revenue for the year to June 30, up 30%.
Second (June) half sales totalled $11.5 million, up 20% year on year.
At this run rate, the company should hit its targeted cumulative sales of $75 million in the three years to June 2027.
In the month of June, Biome exceeded 100,000 monthly units for the first time.
“The result was delivered in a difficult environment for the broader
consumer health sector and was led by the existing business, with same-store
sell-through again well ahead of the category,” management says.
Biome sells its wares under the Activated Probiotics and Activated Therapeutics brands. The company claims its Activated Probiotics Biome Daily is the leading product in Australian pharmacies.
Today’s release was all about sales.
But in a June 3 prezzo, management noted eight quarters of positive underlying earnings (ebitda).
In the December half Biome posted ebitda of $1.47 million and a $1.18m net profit, up 172%.
During the year Biome ‘Australianised’ its supply chain, which should result in lower inventory, faster stock turns and reduced sea freight costs.
So, all of this translates to strong share price growth, right?
Wrong. The shares have fallen 42% over the last 12 months, despite spiking 9% today.
Memphasys Thais down sperm deal
As with the sperm’s arduous journey up the fallopian tube – the tadpoles have less chance of survival than a Squid Game contestant – Memphasys (ASX:MEM) has made heavy weather of its commercialisation push.
But after a series of deals, the company looks to have reached commercial conception with the rollout of its Felix sperm separation device, for IVF clinics.
The company today announced an exclusive three-year distribution compact with Thailand’s IVF Envimed Co, which runs 110 IVF clinics conducting 20,000–30,000 cycles annually.
Envimed has contracted to buy a minimum $430,500 of Felix units over the three years and has placed an initial order for 100 Felix cartridges and three consoles.
Memphasys still needs clearance from the Thai Food and Drug Administration – and expects this to happen within three to six months.
The company cites $1 million of revenue across Southeast Asia, including Vietnam, with overall contracted revenue of $3m in the 2025-26 year.
The Felix devices gently separate the good sperm from the dud swimmers, thus optimising the chances of IVF success.
In the meantime, Memphasys remains mired in penny dreadful territory with a $12 million market cap.