Health Check: More healthcare ‘reverse ferrets’ from Trump’s razor gang

The Trump administration has reversed a decision to close a key FDA quality control lab, while a judge has stymied a move to cut billions of research grants.

Trump's and DOGE's efforts to find healthcare cuts don't always ferret out the rabbit. Pic by Getty Images

• A key FDA quality control lab will remain open, while a judge halts DOGE’s plans to cull billions of research grants

• Cochlear and Resmed win an upgrade after their post-results share thumping

• Dissident holder sells out after Percheron CEO and chairman survive spill motion

When it comes to healthcare policy, uncertainty is the only certainty in Trumpland.

Having last week re-hired hundreds of freshly sacked US Food & Drug Administration (FDA) employees, Trump’s razor gang reportedly has done another reverse ferret.

According to Endpoints News, an FDA lab known as the Office of Testing and Research was slated for closure, but the St Louis facility now will remain open.

The lab was one of about 30 FDA facilities targeted by Elon Musk’s Department of Government Efficiency (DOGE).

The newsletter says the lab is one of the FDA’s most important facilities for ensuring drug quality.

In 2008, the lab probed contaminated supplies of the blood thinner heparin, which likely killed dozens of Americans and was eventually traced back to a supplier in China.

“More recently, it led a probe into common heartburn medications that were found to have unsafe levels of nitrosamine, a carcinogen.

"That investigation helped lead to popular products like Zantac and related over-the-counter drugs being pulled from shelves.”

DOGE also faces judicial pushback, with a federal judge deeming that a proposed cap on National Institutes of Health (NIH) grants was likely illegal.

Last year, the NIH doled out US$35 billion to organisations for medical research.

The issue was a proposed 15% cap on reimbursements for indirect costs, including for infrastructure and administrative support.

Granting a nationwide preliminary injunction, Judge Angel Kelley of the US District ruled that the changes were likely to save more than US$4 billion a year and cause “irreparable harm” to the plaintiffs.

The case was initiated by universities and organisations representing schools and hospitals.

Big Two have entered ‘buy’ territory, says broker

Broker Citi has turned bullish on the marked-down biotech big boys Cochlear (ASX:COH) and ResMed (ASX:RMD) , as well as Integral Diagnostics (ASX:IDX) (which recently merged with Capitol Health).

All three shares have had a torrid time since the release of earnings results which - while ostensibly sound - did not meet the market’s exacting standards.

In the case of Cochlear, Citi opines the current valuation is an attractive entry point, “albeit with uncertainty pending the launch of new devices in 2025”.

Cochlear on February 14 posted a 7% profit increase to $205 million, but was punished for slower-than-expected sales in its services (sound processor) arm.

The company believes customers are holding off pending the launch of a new processor, Kanso 3, in mid 2025.

After all, everyone loves the latest model with the new car smell.

The theory goes that the fat-busting drugs will reduce demand for Resmed’s sleep apnoea (snoring) products.

But the firm concurs with Resmed’s line that, if anything, the drugs will raise awareness of the snoring problem.

The firm believes Integral will record strong revenue growth, partly on the back of a federal lung cancer screening program that starts in June this year at a cost of $264 million over four years.

Integral hopes to get a 15-20% share of this screening work.

The firm cites Oceania’s uptick in apartment sales and its attempts to reduce debt.

The firm values the shares at NZ$1.03 (93 cents), compared with Wednesday’s close of NZ64 cents.

Percheron leaders survive the winds of change

Despite Cyclone Alfred’s brooding presence off the coast, the winds of change failed to blow at Percheron’s Brisbane’s showdown EGM on Tuesday.

In other words, shareholders knocked back a proposal to oust CEO James Garner and chairman Dr Charmaine Gittleson.

Investors defeated the motion to punt Mr Garner was by a margin of 43.45% for, to 56.55% against.

Dr Gittleson survived by a margin of 44.48% to 55.52%.

In electoral terms that would be called a safe seat, but in corporate terms it’s more of a close shave.

The meeting defeated the motion to install Gregory Peters and Gennadi Koutchin as directors by more definitive Bob Katter-style margin: 19% to 81%.

Now, Percheron can pursue the purchase of an alternative asset, after last December’s failure of its key Duchenne muscular dystrophy trial.

Peters today told the ASX he was no longer a substantial shareholder, and has raised the white flag.