Resmed remains the biotech big end of town’s best performer, but some investors are tossing and turning. Pic: Getty Images<\/p>\n
Investors have sold down Resmed after last week\u2019s $700 million divestment \u2013 and have other concerns
\nStarpharma raises $32 million to further its radiotherapies
\nEmvision\u2019s Emu stroke trial \u2018surpasses enrolment expectations\u2019<\/p>\n
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ResMed\u2019s (ASX:RMD)<\/a> reputation as the most resilient pillar of the Big Four life sciences stocks has come into question since last week\u2019s US$490 million ($700m) divestment of software business MatrixPartners.<\/p>\n Some investors also are concerned about a problem with some older sleep apnoea ventilators and the pending re-entry of Philips Respironics into the US market.<\/p>\n Generating US$200 million of revenue annually and US$55 million of earnings in the 2025-26 year, MatrixPartners largely services the aged care sectors.<\/p>\n Resmed paid US$750 million for the asset in 2018.<\/p>\n Analysts generally view the move as sensible, given Resmed can focus on its core sleep health franchise.<\/p>\n In a note, Macquarie Equities opines the sale ties up some loose ends and comes amid lower patient volumes and staff shortages post Covid.<\/p>\n Morgans says MatrixCare was a \u201csomewhat peripheral vertical\u201d for Resmed but dubs the sale price as \u201cdisappointing\u201d.<\/p>\n The firm notes the company intends to use the funds for further share buybacks, thus offsetting the dilution from the company\u2019s US$340 million purchase of Noctrix in early June.<\/p>\n Noctrix has a device to treat the common restless leg syndrome during sleep \u2013 a.k.a. driving your partner crazy.<\/p>\n RBC Capital Markets says given the division\u2019s underperformance post pandemic, the sale did not surprise.<\/p>\n But the realised price \u2013 a ~1\/3rd haircut on what Resmed paid for the asset \u2013 was \u201cwell below our expectations\u201d.<\/p>\n RBC adds: \u201cwe wonder if Resmed\u2019s decision to sell at this multiple partly reflects possible risks of future AI disruption to its software business\u201d<\/p>\n \u00a0<\/p>\n Other concerns weigh on investors<\/p>\n Other factors may be contributing to the 7% decline in Resmed\u2019s share price since the July 7 MatrixCare announcement.<\/p>\n One is a problem with some of its Astral sleep apnoea ventilators made before October 2024.<\/p>\n In a Field Safety Notice, the company warns an internal supercapacitor may leak electrolytes over time, potentially causing the therapy to stop.<\/p>\n \u201cThe part required is scarce so making new machines will be deprioritised for now,\u201d Citi says.<\/p>\n The company says it is prioritising \u201ccorrective actions to ensure continuity of care for patients currently using affected Astral ventilators\u201d.<\/p>\n Citi estimates lost sales of US$200 million and a US$100m underlying earnings hit in the 2026-27-year.<\/p>\n Meanwhile, key rival Respironics is poised to re-enter the US market, after a devastating recall of millions of its ventilators in June 2021.<\/p>\n The units contained sound-dampening foam that could degrade into particles and release harmful gases.<\/p>\n That\u2019s enough for Citi to pare its \u2018buy\u2019 call to a hold.<\/p>\n \u201cWe think we see [many] investors staying on the sidelines for now\u201d.<\/p>\n To be fair, Resmed still wins the Resilience Award, with its shares declining only 28% over the last year.<\/p>\n CSL (ASX:CSL)<\/a> and Cochlear (ASX:COH)<\/a> have swooned 51% and 59% respectively, while ProMedicus (ASX:PME)<\/a> stock is down 40% despite a heroic comeback over the last month.<\/p>\n \u00a0<\/p>\n DEP stars in oncology play\u2019s $32m raising<\/p>\n Cancer drug developer Starpharma (ASX:SPL)<\/a> is testing the strength of improving biotech funding conditions by launching a rights offer to raise around $32 million.<\/p>\n The company offers one right for every 7.5 shares held, exercisable at 57 cents apiece.<\/p>\n That\u2019s a 25% discount to yesterday\u2019s \u2018frozen\u2019 price of 76 cents.<\/p>\n Broker Canaccord is fully underwriting the renounceable raising (the rights can be traded on market).<\/p>\n The raising takes Starpharma\u2019s cash balance to $44 million, thus extending the company\u2019s cash runway \u201cinto 2027-28\u201d.<\/p>\n \u201cThe offer follows Starpharma\u2019s recent announcements regarding the application of its dendritic technology in radioligand therapy across a range of oncology targets,\u201d the company says.<\/p>\n Radioligand couples a radioactive isotope with a therapeutic molecule to target the cancer site directly.<\/p>\n \u00a0<\/p>\n It\u2019s all about dendrimers<\/p>\n Starpharma\u2019s reason for being is its dendrimer enhanced product platform, DEP.<\/p>\n Before you ask, dendrimers are nanoscale polymers aimed at improving drug efficacy and reducing side effects.<\/p>\n The funds will support the company\u2019s phase I program, DEP HER2-Lu (as in lutetium isotope).<\/p>\n This one targets patients with advanced HER2-positive tumours, including gastric cancers.<\/p>\n Starpharma is shares have soared 678% over the last year on the back of the company\u2019s radiotherapy pivot.<\/p>\n (Originally, the company developed a DEP-based Vivagel, a treatment for bacterial vaginosis and a protective condom coating).<\/p>\n In effect, Starpharma is a less evolved version of \u00a0Telix Pharmaceuticals (ASX:TLX)<\/a> or Clarity Pharmaceuticals (ASX:CU6)<\/a>.<\/p>\n Starpharma also has a collab with Radiopharm Theranostics (ASX:RAD)<\/a>.<\/p>\n In September last year the company entered a partnership with Genentech \u2013 an arm of the giant Roche Group \u2013 to further its \u2018next generation\u2019 therapies.<\/p>\n Starpharma pocketed US$5.5 million upfront and is in line for up to US$564 million in potential development and commercialisation milestones.<\/p>\n Also today, Starpharma issued its June quarterly report, showing $1.4 million of customer receipts and cash burn of $3.2m.<\/p>\n Starpharma shares this morning traded around its pre-raising price \u2013 not a bad effort.<\/p>\n \u00a0<\/p>\n Emvision makes strides with Emu<\/p>\n