Health Check: A ‘manageable headwind’ as Trump slugs Europe with 15pc pharma tariff

European pharma companies are breathing a sigh of relief after the Trump administration posed a 15pc tariff, rather than 200pc. 

'It could have been worse' as Trump drug tariff tornado is downgraded to a zephyr. Pic via Getty

• European drug makers have been spared a threatened 200% US tariff

• Mach 7’s new CEO wants to walk in customers’ shoes

• Highlights from the quarterly reporting fiesta

The European drug sector is exhaling a sigh of relief after the Trump administration’s decision to include drugs in a sweeping 15% tariff on European goods.

The Orange One had threatened drug imposts of up to 200%.

In a statement, European Commission President Ursula von der Leyen confirmed pharma products would be included.

The White House Fact Sheet – no, not alternative facts – describes a 15% tariff “including on autos and auto parts, pharmaceuticals and semiconductors”.

The process is subject to a so-called Section 232 investigation, which examines any national security implications. This is due to conclude on August 1.

Endpoints News reports that the European Union exported US$212 billion of pharma products in 2024. These drugs include Botox, Keytruda and Ozempic.

Ireland accounted for nearly a quarter of these shipments.

Analysts at US investment bank TD Cowen dub the 15% tariff a “manageable headwind”.

Makers of branded drugs will fare better than generic providers, because of higher prices.

Meanwhile Australian pharma companies are waiting to see how munificent the Prez is – or otherwise.

Federal Health Minister Mark Butler notes the US position on drug tariffs has "changed a lot over the last couple of weeks".

Our capitulation on US beef imports might help, but who can read the mind of Donald John Trump?

Mach 7 says major US job is on track

Radiology imager Mach7 Technologies' (ASX:M7T) new CEO Teri Thomas has reassured investors about the progress of a large, delayed contract with the US Veterans Health Administration.

The job is to support the sprawling organisation’s National Teleradiology Program.

Mach 7 is part of a five-member consortium, providing its picture archiving and communications systems.

Announcing the contract in July 2023, the company said the phase one rollout potentially was worth $11.7 million over three years, This rises to $47.9 million for the second five-year phase.

The system was meant to have cranked up by December last year and Thomas hopes this will happen later this year.

“It’s progressing,” Thomas says. “It’s big, it’s complicated and we are one of a number of vendors who need to come together for this solution to go live.”

Quarterly progress

Meanwhile, Mach 7 has chalked up its third successive quarter of positive cash flow, achieving $600,000 for the period and $700,000 for the year.

The US-focused Mach 7 reported June quarter receipts of $8.4 million, 20% lower owing to “timing differences” (March quarter receipts were 28% higher).

As of June 30, contracted annual recurring revenue stood at $30.2 million, up 1.6% with “growth from expansions and renewals offset by customer attrition”.

Mach 7 has $23.1 million cash and no debt.

Unusually for a biotech, Mach 7 has been undertaking a share buyback, having acquired $2.2 million of its own shares in the June half.

This reflects management’s belief that that Mach 7’s modest $100 million market cap undervalues the company.

Mach 7 shares have lost one-third of their value over the last year, including 8% this morning.

In her maiden investor outing, Thomas this morning spoke of “getting in the mind of customers and chucking on their shoes”.

If Thomas the Tank Engine builds a head of steam, things could turn around quickly.

Aroa affirms current-year guidance

After a barren couple of weeks, we’re being deluged with quarterlies – and far too many to scrutinise properly.

As with Mach 7, Kiwi wound repair house Aroa Biosurgery (ASX:ARX) reported its third successive quarter of positive cash flow, of NZ$1.7 million.

The company also managed receipts of NZ$22.5 million, driven by sales of its Myriad range for large complex wounds.

Aroa has guided to revenue of NZ$92-100 million for the year to March 2026, with normalised underlying earnings of NZ$5-8 million.

Cancer imaging house Imagion Biosystems (ASX:IBX) says it’s on track to file an Investigation New Drug (IND) application with the FDA in the current quarter.

If the agency grants the IND, Imagion can kick off a clinical trial of its Magsense tech, for breast imaging.

Magsense will be the first imaging tech to use targeted magnetic nanoparticles to tag and detect cancers.

Imagion had June quarter cash outflows of $818,000, taking cash on hand to $883,000.

The company expects outflows to reduce in the current quarter, as it reduces corporate costs.

Clever Culture Systems (ASX:CC5) chief Brent Barnes says 2024-25 has been a “turning point for the company, resulting in a major milestone towards becoming a sustainable operating business”.

The company now has signed up five big pharma companies for its automated agar plate system APAS Independence. These are for environmental monitoring of sterile drug making facilities.

The company cites a “sales opportunity” of $40 million, based on existing customers purchasing 60 to 80 units.

Clever Culture recorded receipts of $880,000 and net operating cash outflows of $248,000. Full year flows were positive to the tune of $1.16 million.

Prescient wants some more

On the fundraising front, cancer drug developer Prescient Therapeutics (ASX:PTX) has raised $6.8 million in a share purchase plan (SPP) and will now carry out a follow-on placement.

Usually, companies do the placement before the SPP, but there are no hard and fast rules.

The shares are on trading hold pending the unquantified placement, which will be done at 4 cents per share (an 11% discount).

Prescient’s mercifully slimmed-down program focuses on PTX-100, which is in phase II development.

The world’s only GGT-1 inhibitor in clinical development, PTX-100 has looked promising in early programs for blood and solid cancers.

Yesterday, PainChek (ASX:PCK) said it had raised $7.5 million in a placement, partly to support a US rollout into the $580 million US nursing market.

The company expects FDA clearance of its digital pain measurement app by early October.

New and existing institutional, high net worth and sophisticated investors supported the raising.

The company said net contracted licences increased to 110,000. Contracted annual recurring revenue came in at $5.4 million (up 10%).

The placement funds also will support the company’s rollout of an infant app locally.

FDA U-turns on key drug decision

In more news from our buzzing Washington desk, the FDA has allowed Sarepta Therapeutics to resume selling its Duchenne muscular dystrophy gene therapy to non-wheelchair bound patients.

In response, shares in the Nasdaq-listed Sarepta bounded almost 50% overnight.

The agency decided the death of a Brazilian boy was unrelated to the drug, Elevidys. But two older patients died earlier.

Sarepta still can’t supply the drug to non-ambulatory patients.

Despite the share bounce, Sarepta shares still have lost 90% of their value over the last year.