Kunnen deze 3 ASX-gezondheidsaandelen de index overtreffen in 2020?

Kunnen deze 3 ASX-gezondheidsaandelen de index overtreffen in 2020?

januari 16, 2020 0 Door admin

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It was a great year for ASX healthcare shares in 2019, with the S&P/ASX Healthcare Index increasing by 41%.

These 3 ASX healthcare shares experienced even greater gains in 2019, but can they continue to outperform in 2020? 

It was a great year for ASX healthcare shares in 2019, with the S&P/ASX Healthcare Index increasing by 41%.

These 3 ASX healthcare shares experienced even greater gains in 2019, but can they continue to outperform in 2020? 

Avita Medical Ltd (ASX: AVH)

Avita Medical is a regenerative medicine company specialising in spray-on skin therapy for dermal applications. Avita Medical’s shares increased 700% over 2019, and are currently trading at 60 cents. 

Sales of Avita’s lead product, the RECELL System, increased 60% in the September 2019 quarter. The RECELL System is currently used to treat burn wounds but is also being assessed for use in treating vitiligo, traumatic wounds, scar reconstruction, and for aesthetic indications. In December, Avita reported the FDA had approved a study investigating the use of the RECELL System in the treatment of vitiligo. More than 1,000 patients have already been treated globally for vitiligo and reported re-pigmentation. 

More than 50% of US burn surgeons and centres are now trained on the RECELL System and 56 of 132 US burns centres have placed orders for it. The company reported total revenue in the September quarter of $7,900,000, an increase of 165% over September 2018 revenues of $2,972,000. 

In November, Avita raised $120 million in equity capital via a placement of 203,389,831 shares at 59 cents per share. Funds are earmarked for the pipeline development of new indications, including optimising support for clinical trials and development projects, as well as the company’s continued US growth. In FY20, Avita Medical plans to commence trials establishing the safety and efficacy of RECELL in paediatric treatment, and for soft tissue and traumatic wounds. Japanese regulatory approval for the use of the RECELL System is also expected in 2020. 

An announcement regarding a collaboration using the system for rejuvenation is expected in 1H20. Capturing just 5% of the skin rejuvenation market could represent a >$500 million opportunity. 

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

Paradigm is an Australian biopharmaceutical company focused on repurposing the drug pentosan polysulphate sodium (PPS) for the treatment of osteoarthritis. Paradigm shares increased 195% in 2019 and are currently trading at $3.02. 

PPS is an FDA approved drug with a long track record of treating inflammation over 60 years. Paradigm has developed an injectable form of PPS, called Zilosul, intended to treat osteoarthritis. Osteoarthritis is the most common joint disorder in the United States (US) and is likely to increase due to the ageing population and obesity epidemic. The company reports that there are currently more than 100 million osteoarthritis sufferers in the US, Europe, and Japan. 

The Phase 2b trial successfully met primary, secondary, and exploratory endpoints. After 53 days, nearly half of patients given Zilosul reported >50% reduction in pain compared to around 20% of patients given a placebo. Competing treatments have not demonstrated the same combination of safety, efficacy, and regression of disease. 

Paradigm met with the Australian Therapeutic Goods Administration in November to present its case for provisional approval of Zilosul as a treatment for knee osteoarthritis. If provisional approval is successful Paradigm could be generating revenue in Australia as early as the third quarter of 2020. With 3 million sufferers, the revenue potential in Australia at 20% market share is as much as $1.5 billion per annum. 

In the first quarter of 2020, the company will also be meeting with the US Food and Drug Administration (FDA) and the European Medicine Agency to determine the clinical trial design that will support regulatory approval in both jurisdictions. Paradigm expects the Phase 3 trial to begin in mid 2020. The revenue potential in the US at 10% market share is as much as $9 billion per annum. 

Zilosul has been granted FDA approval under the Expanded Access Program to treat 10 patients, all ex-NFL players suffering osteoarthritis. The players were treated at the end of 2019 and results from their treatment are expected in mid 2020. 

Polynovo Ltd (ASX: PNV)

Polynovo is a medical device company which manufactures an implantable dressing (Novosorb BTM) that can be integrated into the body as it heals. Polynovo shares increased more than 200% during 2019 and are currently trading at $1.91. 

PolyNovo recently announced that it has recorded its first month of $2 million in revenue from the Novosorb BTM product in December. The first $1 million month occurred in May. CEO Paul Brennan said, “We are pleased with the sales trend, however as a word of caution sales will continue to be lumpy as new sales staff are added and new territories opened up and because of natural disasters such as fires and volcanoes.”

The Novosorb BTM product had been granted a certificate of conformance (CE mark) approval in December for sale throughout the UK, Ireland, and the European Union. The company reports it already has strong brand recognition and awareness of its clinical success in these markets via international conferences, publications and peer interactions. A further announcement regarding prospects in this region is expected shortly. 

Following the White Island volcano tragedy the company announced it had supplied the Novosorb BTM product to 3 hospitals in New Zealand and 2 in Australia. The product, it said, mitigates some of the serious challenges involved in treating mass trauma and burns. 

Sales of Novosorb BTM increased from $1.7 million in FY18 to $9.3 million by FY19. Guidance for FY20 has been in the region of $12 million, however the company is seeing growth in all markets. Growth in the US business is very strong and the company reports that Novosorb BTM product is changing clinical practice in many areas. 

Foolish takeaway

These ASX healthcare shares outperformed the index in 2019. Whether they can do so again in 2020 remains to be seen. For Avita Medical and Paradigm much will depend on the results of their clinical trials and regulatory approvals. For Polynovo, results will largely depend on sales of Novosorb BTM, which appear promising so far. 

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