4 Healthcare and Pharma Stocks - ResMed, Sirtex, Sonic Healthcare and ImpediMed

ResMed Inc

RMD Details
 
Operating profit returned to double-digit growth in the First Quarter of FY18: ResMed Inc (ASX: RMD) stock rose 4.9% on October 27, 2017 at the back of a strong first quarter 2018 result. The stock found support from 13% growth in the revenue to $523.7 million. On a constant currency basis, the revenue grew 11% due to the masks, software-as-a-service solutions, and devices. Net income also grew 13% to $86.1 million and Non-GAAP net income grew 7% to $94.1 million. Moreover, in the first quarter of FY18, the cash flow from operations for the quarter was $94.0 million and the company repaid $60.0 million of the outstanding debt. Overall, in the first quarter the new masks have performed well around the world, device sales have been strong, and operating profit returned to double-digit growth in the quarter. However, the R&D expenses have risen 9% over same period of last year.
 
Recently, the tech-driven medical device company had announced about a favorable decision by Munich District Court deciding that RMD’s AirSense 10, AirCurve 10, Lumis and humidifiers do not infringe a Fisher & Paykel German utility model. Meanwhile, RMD stock has risen 7.9% in the last six months as at October 26, 2017 and is trading at high levels.We give an “Expensive” recommendation on the stock at the current price of $ 10.65

Sirtex Medical Limited

SRX Details
 
Launched a new Investigator Initiated Trial: Sirtex Medical Limited (ASX: SRX) saw a stock price plunge of 3.8% on October 27, 2017 while the group recently launched a new Investigator Initiated Trial (IIT) in non-resectable advanced hepatocellular carcinoma (HCC), which is the most common type of primary liver cancer. The study, known as NASIR-HCC, examines the combination of SIR-Spheres Y-90 Resin Microspheres with Opdivo in HCC. Moreover, the NASIR-HCC study is a part of the company’s clinical strategy that seeks to add value to the core product through small, targeted IITs using SRX therapy in combination with drug-based treatments like checkpoint inhibitors that are in clinical development for a range of different cancer types including HCC. This is the second IIT looking at this unique combination, as the similar study is ongoing in Singapore. While the group has been banking on large addressable market in salvage for future performance, the shares of the group have been on a see-saw in terms of volume given the volatile environment. We give a “Hold” recommendation on the stock at the current price of $ 14.07

Sonic Healthcare Limited

SHL Details
 
Refinancing of bank debt facilities: Sonic Healthcare Limited (ASX: SHL) has issued €160 million of notes in the United States private placement market as part of refinancing expiring bank debt facilities. In this, €75 million of the notes have a 7-year tenor, and €85 million have a 15-year tenor. The weighted average fixed coupon for the notes is approximately 2%. The group has refinanced the remainder of Sonic’s October 2017 expiring bank debt facilities through a new 5.5-year revolving bank facility.
 
On the other hand, US Centre for Medicare and Medicaid Services (CMS) had lately confirmed the planned cuts under the Protecting Access to Medicare Act (PAMA) that will come into effect in 2018, and this is expected to impact Sonic’s earnings going forward. Meanwhile, SHL stock has fallen 3.53% in three months as on October 26, 2017. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $ 21.68

 

Financial Performance (Source: Company Reports) 

ImpediMed Limited

IPD Details
 
Changes in shareholding: ImpediMed Limited’s (ASX: IPD) stock has surged about 9% on October 27, 2017 while Allan Gray Australia increased its shareholding in the group from 14.95% to 16.96% and FIL Ltd decreased the shareholding from 9.29% to 7.46%. The group lately announced for the initial shipments of SOZO systems with L-Dex technology to customers in the U.S. for setting a more effective and efficient patient care platform. While the group seems to be working on strategies to generate profit, the developments and efforts on commercialization are expected to give some boost. We maintain a “Buy” at the current price of $ 0.72

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