Sirtex Medical Ltd

 
SRX Details

Addressing issues relating to Infringement Notice: Sirtex Medical Ltd (ASX: SRX) had recently received an Infringement Notice regarding their Trading Update of December 2016, and the stock was seen to lost over 11.6% in the last three months (as of October 16, 2017). While the group has denied the allegations, SRX still paid the Infringement Notice penalty of $100,000 for an early closure of the matter.Meanwhile, SRX is on track with regards to its further FDA submissions for the first half of 2018. They are also expanding in higher growth markets, like France.
 
 
FY17 performance (Source: Company reports)

The group is leveraging clinical findings at the level of treatment guidelines (NCCN, ESMO, Other) and government payers. SORAMIC clinical study results are expected in the second half of 2018 and the company now aims to focus on a more efficient core business with regards to targeting new and existing clinicians and patients. SRK is also positioning itself to enhance the reach within their under-penetrated salvage market. SRX stock has however fallen about 4.9% on October 17, 2017 with changes in substantial holding by stakeholders and volatile environment. We give a “Hold” recommendation on the stock at the current price of $ 13.76

 
SRX Daily Chart (Source: Thomson Reuters)

Sigma Healthcare Ltd

 
SIG Details

Reached settlement with My Chemist/Chemist Warehouse Group: Sigma Healthcare Ltd (ASX: SIG) has announced about a settlement with regards to an ongoing operation of the current Supply Agreement with MC/CW. With this deal, MC/CW would not be pursuing the procurement of products from another

CSO wholesaler for the rest of the agreement. SIG’s stock surged over 4% on October 17, 2017, at the back of this settlement news. Meanwhile, SIG’s 1H FY18 revenue was noted to slip by 6.1% year on year (yoy) to $2.02 billion while their reported NPAT jumped up 16.7% yoy to $27.9 million.
 
Sigma Healthcare half year highlights (Source: Company reports)
 
The weak top line is mainly on the back of a combination of the pull back in sales of the low margin Hepatitis C medicines, coupled with the exit of a non-compliant branded customer group, and general softness in consumer sentiment. The group expects its underlying EBIT reaching $90 million for FY18 with some bit of positive momentum going forward. However, we believe it would be prudent to wait for more signs of the bounce back from a challenging period, and give an “Expensive” recommendation on the stock at the current price of $ 0.86

 
SIG Daily Chart (Source: Thomson Reuters)

Mayne Pharma Group Ltd

 
MYX Details

Expanding Australian portfolio: Mayne Pharma Group Ltd (ASX: MYX) has received Therapeutic Goods Administration Approval (TGA) for Monurol (fosfomycin trometamol) (3g) granules and launched Urorec (silodosin) (8mg) capsules in Australia. The group would promote both the products aiming urologists and other related healthcare practitioners. Monurol has captured 25-40% share of the UTI prescription market in certain mature markets while Urorec has penetrated 10-30% of the BPH alpha blocker market by volume. Urorec was launched in August while Monurol would be launched in December 2017.
 
 
MYX business segments’ performance (Source: Company reports)

The group forecasts that these products would drive their Australian business over the coming years. On the other hand, MYX stock lost over 47.8% in this year to date (as of October 16, 2017) impacted by the price deflation of generic drugs in the U.S. As the group derives a large part of their revenues from the US, the risks of legislative changes weigh over the stock. Moreover, rising competition coupled with pricing activities have been seen to impact the overall generic market. We give an “Expensive” recommendation on the stock at the current price of $ 0.72

 
MYX Daily Chart (Source: Thomson Reuters)

Mesoblast Ltd

 
MSB Details

Aims to benefit from strategic partnerships: Mesoblast Ltd.’s (ASX: MSB) stock plunged 3.8% on October 17, 2017 while the group released their annual report recently. MSB forecasts the contribution of the topline results from their Phase 3 trial in acute graft versus host disease in children in the coming months as well as the end-stage chronic heart failure trial in patients requiring a left ventricular assist device (LVAD), which is being funded by the United States National Institutes of Health and the Canadian Health Research Institute. The group expects to finish recruitment of their Phase 3 trial in chronic low back pain due to disc degeneration. Accordingly, they intend to make strategic partnerships which would reflect the late-stage value of their product candidates. Moreover, the group intends to leverage the potential benefits that might be available under the United States 21^st Century Cures Act, for those who can afford avenues to expedite development of regenerative medicines. We give a “Hold” recommendation on the stock at the current price of $ 1.75

 
MSB Daily Chart (Source: Thomson Reuters)

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