It’s been a strong week for the ASX healthcare sector. Pic: Getty Images<\/p>\n
ASX heath sector up 2.84% for the week, while broader market rises ~2.4%
\nMorgans Scott Power said sector showing signs of recovery heading into year end
\nRace Oncology rises almost 30% this week after discovery in development of lead cardio protective anticancer drug RC220<\/p>\n
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 \u2018Powerplay\u2019 stock pick.<\/p>\n
The ASX healthcare sector is showing strong signs of recovery in October following a weaker September. Nearing closing time on Friday the ASX Health Care Index (XHJ) was up a very solid 2.84% for the past week, while the broader S&P\/ASX 200 (XJO) had risen ~2.4% for\u00a0 the same period.<\/p>\n
The sector fell 4.15% in September and remains the biggest laggard year to date, dropping more than 14% but Morgans senior healthcare analyst Scott Power is feeling optimistic heading into last quarter of CY25.<\/p>\n
\u201cFor the week it is looking much better for both the broader market and healthcare sector,\u201d he said.<\/p>\n
\u201cThere seems to be a lot more activity in the smaller end of the market and quite a few stocks which are starting to bounce and we\u2019re coming into a seasonally stronger part of the year.\u201d<\/p>\n
Power noted, too, there\u2019s been several capital raisings, while the IPO window was starting to open with more likely to come.<\/p>\n
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Trump pauses pharma tariff threat after Pfizer deal<\/p>\n
US drugmakers surged on Wednesday (US time), with the NYSE Arca Pharmaceutical Index (DRG), which tracks the top 20 pharma stocks, up 5.4% after signs of easing MFN (most favoured nation) drug pricing and tariff concerns following Big Pharma Pfizer\u2019s deal with the US government to lower drug costs.<\/p>\n
Pharma companies have been scrambling to meet US President Donald Trump\u2019s MFN demands and avoid threatened tariffs (100% by October 1), with Pfizer the latest to announce a US$70\u202fbillion investment alongside measures to address drug pricing in the US.<\/p>\n
In a note to clients, Morgans\u2019 Derek Jellinek wrote that Pfizer would get a three-year reprieve from tariffs as part of the deal and participate in a new federally operated direct-to-consumer (DTC) drug purchasing platform, TrumpRx.gov, offering drugs at a discount.<\/p>\n
\u201cWhile the agreement is largely viewed as more symbolic than transformative, with limited direct consumer benefits, it is likely to encourage similar commitments from other pharmaceutical and improves overall sector sentiment, given it eliminates the \u2018worst-case\u2019 scenario of extreme tariffs and pricing uncertainty,\u201d he wrote.<\/p>\n
For the ASX\u2019s largest biotech blood products giant CSL (ASX:CSL)<\/a>, Jellinek wrote it was likely to be a beneficiary or at least insulated from any US tariffs on pharmaceuticals given its strong US operational footprint in plasma collection, fractionation, and manufacturing.<\/p>\n Around 40-50% of CSL\u2019s revenue comes from the US, particularly via its plasma-derived therapies division CSL Behring, and it operates major plasma facilities in Illinois and North Carolina with one of the largest plasma collection networks in the US (CSL Plasma).<\/p>\n \u201cCSL would be minimally impacted by US tariffs on finished pharma products because it sells into the US mostly from its US operations,\u201d Jellinek wrote.<\/p>\n \u201cMFN pricing frameworks would have less relevance to CSL\u2019s plasma-derived therapies, which are less price elastic and more supply-constrained than small-molecule generics.\u201d<\/p>\n \u00a0<\/p>\n \ufeff\ufeff\u00a0<\/p>\n \u00a0<\/p>\n CMS payment update expands Recell access<\/p>\n