AirXpanders Inc

Positive outcome from XPAND II access trial: AirXpanders Inc (ASX: AXP) recently released the new data from their XPAND II access trial which showed the results of 50 women who received AeroForm. The group presented the findings at the 86^th Plastic Surgery annual scientific meeting in Orlando. Through the findings, the group highlighted that the primary endpoint was met with 100% of patients making successful expansion and exchange to breast implant (precluding non-device related failures). XPAND II, is the group’s fifth prospective trial, which reaffirms the consistent, outstanding performance and patient benefits of the AeroForm System across all the clinical trials and in commercial use. The group is making efforts for a full launch in the US. They finished manufacturing transfer to Costa Rica which would enhance their production capacity of up to 20,000 units per year. The shares of AXP rose over 7.7% in the last four weeks (as at October 11, 2017), however, we believe it might be prudent to wait for further positive results through development programs before investing based on the 33% drop in returns this year to date. We maintain our “Expensive” recommendation on the stock at the current price of $ 0.76

Fisher & Paykel Healthcare Corp Ltd

Patent litigation weighing on the stock: Fisher & Paykel Healthcare Corp Ltd.’s (ASX: FPH) stock plunged 3.3% on October 12, 2017 at the back of weakening sentiments given the latest patent dispute update. The group recently reported that the German court finalized the decision that the group’s Simplus, Eson and Eson 2 masks infringed two of the ResMed European patents. ResMed will be defending those patents before the European Patent Office. The group is paying ResMed court costs in Australian patent suit and has withdrawn the validity challenge to the ResMed mask patent. FPH stock had surged over 43.2% in this year to date (as of October 11, 2017) placing the stock at higher levels. Given the trading scenario and unfavorable updates on patent disputes, we give an “Expensive” recommendation on the stock at the current price of $ 11.54

Nanosonics Ltd

Solid FY17 performance: Nanosonics Ltd (ASX: NAN) delivered an outstanding revenue rise of 58% to $67.5 million for FY17. Their North America installed base surged 42% to 12,400 while Global installed base reached 14,100. The group is expanding their market into Japan while making investments in R&D to generate results. They are targeting two new products over the next two years. NAN also intends to establish Trophon product (disinfection technology) as standard of care across all hospitals in North America while adoption is building up in UK. NAN has a decent cash reserve of $63.0 million. The stock rallied 13.3% in the last three months (as of October 11, 2017) and we believe this momentum to continue. We give a “Speculative Buy” recommendation on the stock at the current price of $ 2.70

 

FY17 performance (Source: Company reports)

ImpediMed Ltd

Positive L-Dex results: ImpediMed Ltd.’s (ASX: IPD) stock surged up over 7% on October 12, 2017 post falling about 10% in last five days (as at October 11, 2017), at the back of volatility. The group had recently reported new results from an independent clinical study using L-Dex® for early detection of subclinical lymphoedema. New data supports the positive clinical outcomes of prospective surveillance using L-Dex in limiting the extremely debilitating and lifelong morbidity. The group had recently received US FDA 510(k) clearance for SOZO with L-Dex. These steps are said to help the group accelerate its regulatory strategy and market launch of products ahead of schedule. We maintain our “Buy” recommendation on the stock at the current price of $ 0.80

SomnoMed Ltd

Positive outlook: SomnoMed Ltd (ASX: SOM) recently reported that they entered into the financial year 2017/18 on a positive note. The group’s combined revenues of their SOM and RSS businesses are expected to grow by 50% to 60% in the coming twelve months and earnings are expected to double. Their Europe showed a better growth over last financial year. Moreover, France as well as Belgium followed Holland, Sweden and Norway in terms of changes in favor of COAT™ while keeping clear reimbursement directions in place. The group forecasts that many countries would follow suit in the coming few years, which would enable their European business to grow for years to come. Their US business navigated successfully through the adverse reactions to the RSS initiative from some of their US customers and returned to solid growth in the last quarter of the year. The group forecasts their North America segment to show solid growth benefitting from the combination of a growing COAT™ business and supplying their RSS centres with SomnoDent® devices in 2017/2018. Their new entity, Renew Sleep Solutions, began to develop a business offering directly to patient sleep apnea treatment services this year. SOM stock rallied over 19% in the last three months (as of October 11, 2017). We give a “Hold” recommendation on the stock at the current price of $ 3.75
 

Decent FY17 performance (Source: Company reports)

Cochlear Ltd

Continuous investment in research and development: Cochlear Ltd (ASX: COH) is a major player in implantable hearing devices with over 450,000 recipients and around 70% of the global implant recipient base. The group is targeting a long-term market growth wherein addressable clinical need for implantable hearing solutions has less than 5% market penetration. They are investing more than A$150 million each year in research and development and made 100 collaborative research programs worldwide. COH delivered strong performance across all geographies, and product lines, and there was a strong increase in sales revenue from the Americas for FY17. COH stock generated over 33.5% in this year to date (as of October 11, 2017) and is trading at a higher level given the price to earnings ratio. We give an “Expensive” recommendation on the stock at the current price of $ 165.51

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