ASX healthcare stocks went on a roll in August and continued their premiership performance into September. But perhaps steer clear of any maritime-themed AV gimmicks? Pic: Getty Images<\/p>\n
Fundies back the come-from-behind healthcare sector
\nHealius divestment makes sense, but headwinds remain
\nMayne settles decade-old US civil case<\/p>\n
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Forget the weekend heroics of the Brisbane Lions, Newcastle Knights and the Wallabies: ASX healthcare stocks are the real winners as institutional investors flock to the once-maligned cohort.<\/p>\n
Morgan Stanley\u2019s analysis of domestic fund manager positioning in August shows that these investors increased their overweight position in healthcare stocks.<\/p>\n
CSL (ASX:CSL)<\/a> led the way, becoming the top held \u2018active position\u2019 across the market.<\/p>\n Three months ago no-one wanted to know about the stock. In a similar vein, the Novocastrian rugby league team \u2018won\u2019 the wooden spoon last year.<\/p>\n \u201cHealthcare extended its lead as the most preferred sector and this was reflected at the stock level with a sharp increase in active CSL holdings,\u201d Morgan Stanley says.<\/p>\n Indeed, CSL is the biggest healthcare stock by some margin.<\/p>\n The fundies were also happy to be overweight in ResMed (ASX:RMD)<\/a>, the second-biggest ASX healthcare play.<\/p>\n In other sectors, fundies have been keen on communication services and discretionary stocks (albeit skewed towards gambling).<\/p>\n They remain overweight in insurers and materials (resources), but have trimmed their position in the banks.<\/p>\n Meanwhile, RBC Capital Markets this month moved to an \u2018overweight\u2019 call on a slew of healthcare stocks.<\/p>\n This followed a profit reporting season that was \u201cgenerally much better\u201d than the firm feared.<\/p>\n \u201cWe are now expecting positive earnings growth across the sector,\u201d RBC said.<\/p>\n Apart from CSL and Resmed, RBC also is keen on Ramsay Health Care (ASX:RHC)<\/a> , Fisher & Paykel Healthcare (ASX:FPH)<\/a> and Nanosonics (ASX:NAN)<\/a>.<\/p>\n The firm retains its overweight call on radiology chain Integral Diagnostics (ASX:IDX)<\/a>.<\/p>\n \u00a0<\/p>\n Healius sharpens focus with Agilex sale<\/p>\n Still on medical imaging, shares in Healius (ASX:HLS)<\/a> have halved over the last year.<\/p>\n But the pathology chain\u2019s sale of its Agilex Biolabs clinical trials division should bolster the company\u2019s balance sheet.<\/p>\n Having said that, Macquarie Equities contends the benefits of the sale don\u2019t exactly offset the sector\u2019s challenges. These include wage increases and sluggish demand.<\/p>\n Healius on Friday said it intended to sell Agilex to Novotech Health, for an enterprise value of $160 million and cash proceeds of $155m.<\/p>\n Private equity majority-owns Novotech, a global clinical research organisation.<\/p>\n Hmmm.<\/p>\n The market greybeards insist that one should never buy from private equity \u2013 but we guess there\u2019s no rule against selling to them.<\/p>\n \u201cThe sale strengthens the balance sheet and provides capital management optionality,\u201d Macquarie says.<\/p>\n \u201cBut pathology earnings remain challenged by ongoing wage pressures from the Fair Work Commission gender undervaluation case, subdued GP attendances and execution risk around margin recovery initiatives.\u201d<\/p>\n The sale culminates a strategy review that Healius kicked off in May, after several unsolicited approaches from \u201ccredible parties\u201d to buy Agilex.<\/p>\n Post-transaction Healius moves to a net cash position, having had net debt of $33 million at June end.<\/p>\n The company will elaborate on its use of funds closer to the deal closing.<\/p>\n The Foreign Investment Review Board and the Australian Competition and Consumer Commission need to green light the transaction.<\/p>\n If all goes to plan, Healius should complete the deal in the second half of calendar 2027.<\/p>\n \u00a0<\/p>\n Give us more time, says Paradigm<\/p>\n Having tentatively flagged that its shares would emerge from suspension today, Paradigm Biopharmaceuticals (ASX:PAR)<\/a> has pleaded for more time to sort through the aftermath of last week\u2019s failed pivotal knee osteoarthritis trial.<\/p>\n Now, the company on Wednesday expects to provide more information on its financial position, notably its arrangement with convertible note investors Obsidian Global.<\/p>\n This should enable Paradigm to lift the voluntary suspension, with a gruesome sell-down no doubt ensuing.<\/p>\n The shares entered trading halt last Monday, having last changed hands at 24.5 cents. This valued the company at $124 million.<\/p>\n \u00a0<\/p>\n Aft is turning Japanese <\/p>\n Auckland-based specialty drug maker AFT Corporation (ASX:AFT)<\/a> has signed a deal to license and commercialise its combination analgesic Maxigesic IV in Japan.<\/p>\n The compact, with Mikasa, gives AFT an entree into the world\u2019s third-largest pharma market.<\/p>\n Under the agreement, AFT grants Mikasa an exclusive licence to seek approval to sell the drug in Japan and commercialise it.<\/p>\n AFT develops and supplies the product. The company also receives upfront licence fees and development milestones linked to regulatory submission progress and reimbursement pricing.<\/p>\n Royalties should follow post-launch.<\/p>\n Sold as Combogesic in Japan, Maxigesic combines paracetamol and ibuprofen into a non-opioid injectable combination.<\/p>\n Melding the two doesn\u2019t sound like rocket science.<\/p>\n But obtaining approvals can be not so straightforward.<\/p>\n In any event, Maxigesic stands as the world\u2019s top-selling over-the-counter combo painkiller.<\/p>\n Over the years, AFT has zeroed in on medical needs which the big players have ignored.<\/p>\n \u201cThere are quite big holes because big pharma will focus on the really big markets,\u201d founder and CEO Dr Hartley Atkinson says.<\/p>\n \u00a0<\/p>\n Mayne settles US action for \u2026 not much<\/p>\n