ScoPo’s Powerplays: Morgans expert Iain Wilkie fills in to talk health stocks as CSL leads a 5pc rally

ASX health stocks have rallied 5pc over the past five days as the sector’s largest company CSL lifts 6.3pc.

ASX healthcare gets a dose of good medicine this week. Pic: Getty Images

• ASX health stocks rally 5% over past five days as sector's largest company CSL rises 6.3%

• Recruitment completed for a phase II investigator-led study of Clarity's prostate cancer imaging agent

• EBR receives preliminary Transitional Pass-Through reimbursement in US for its WiSE CRT system 

Morgans healthcare and life sciences expert Iain Wilkie explains what the movers and shakers have been doing in health and gives you his ASX Powerplay.

The ASX healthcare sector has had a welcome dose of good medicine this week, climbing on the back of strong gains from heavyweight CSL (ASX:CSL), which is up 6.53% in the past five days on no new announcements.

At 2.30pm on Friday the  S&P/ASX 200 Health Care index (ASX:XHJ) was up ~5% for the week, while the benchmark S&P/ASX 200 (ASX:XJO) rose 2.21%.

In a note to client last week Morgans’ analyst Dr Derek Jellinek wrote that the broker "views CSL as materially undervalued" ahead of its FY25 results, which are due to be reported on August 19.

"It's not like the results are going to blow anyone's socks off but his point was that it's just too cheap where it is and if the results are in line it should be positive for the stock," Wilkie said.

"It is good to see CSL getting back into favour."

Morgans maintains a buy rating on CSL, reducing its 12-month target price to $303.70 from $329.26.

New Chinese obesity drug fuels competition

In the broader global healthcare market there has been plenty of news this week, with further talk on tariffs on US pharmaceutical imports and the emergence of another potential competitor to weight-loss drug giants Eli Lilly and Novo Nordisk.

Chinese biotech Hengrui Pharma and biotechnology startup partner Kailera Therapeutics have shown promising results in a phase III trial of once-weekly subcutaneous injection of their weight loss drug candidate, HRS9531, in obese or overweight individuals living in China.

In the 567-person trial involving adults with obesity or who are overweight and have at least one weight-related medical condition, HRS9531 (2mg, 4mg, or 6mg) treated  individuals lost an average 18% of their body weight after 48 weeks, or roughly 16% more than those given a placebo.

In addition, nearly 90% of trial participants given HRS9531 lost at least 5% of their body weight and over 44% achieved at least 20% weight loss.

Management claim HRS9531 has "best-in-class potential", pointing out how one pre-specified analysis showed patients on the highest tested dose lost up to 19.2% of their body weight after 48 weeks, with the drug’s effect not yet having plateaued, suggesting it could improve with time.

While specific safety data was not disclosed, management noted that most treatment-emergent adverse events were “mild to moderate” and "gastrointestinal-related".

Hengrui plans to file an application in China for approval, while Kailera will initiate global studies that involve higher doses and a longer treatment duration outside of China under the name KAI-9531.

Wilkie's Powerplay: Clarity completes recruitment for phase II trial

Radiopharmaceutical developer Clarity Pharmaceuticals (ASX:CU6) has announced completed recruitment for a 50 patient, phase II investigator-led study of its prostate cancer imaging agent.

The study compares Clarity’s copper-isotope based agent 64Cu-SAR-bisPSMA with standard of care gallium based alternative 68Ga-PSMA-11 for detecting prostate cancer recurrence in patients with low PSA levels.

The Co-PSMA trial is being held at Sydney's St Vincent's Hospital and aims to compare lesion detection rates between the two imaging agents.

"No word or guidance on when these results will be published but we note given it is investigator led, it’s generally out of the company’s hands as to how long the data analysis will take," Wilkie said.

"Likewise, the release of the information may be kept on ice or embargoed until publication in one of the scientific journals."

Either way, Wilkie said it would be an interesting, closely watched result with the critical factor beyond detection rate comparisons is whether Clarity's diagnostic imaging leads to a change in treatment decisions compared to the standard of care.

Novo Nordisk places order with Clever Culture Systems

Clever Culture Systems (ASX:CC5) is up more than 42% this week after announcing Novo Nordisk had placed an order for an APAS Independence system to be placed at its center of excellence site in Denmark.

The placement is intended for a comprehensive evaluation to determine the system's appropriateness for implementation throughout Novo's global manufacturing network for pharmaceutical environmental monitoring.

Novo Nordisk will compare Clever Culture's automated plate reading technology against its existing manual microbiology workflows.

The sale represents Clever Culture's fifth engagement with a leading pharma manufacturer, including AstraZeneca, Bristol Myers Squibb and Thermo Fisher.

The company is due to report its Q4 FY25 cashflow report in late July 2025.

In a note to clients Morgans' senior healthcare analyst Scott Power said evaluation aligns closely with Clever Culture's targeted sales approach, which focuses on engaging multinational pharmaceutical companies through their Centres of Excellence.

"These centres are responsible for vetting new technologies and driving innovation across global operations," he wrote.

"CCS's model is designed to support these evaluations with tailored engagement and technical validation.

"Based on similar evaluations, CC5 have historically seen these evaluations completing between four to six months prior to the decision to roll out more broadly."

READ: Big pharma takes notice as Novo Nordisk puts Clever Culture’s APAS to the test

EBR gets a reimbursement lift for WiSE CRT System

The US Centers for Medicare & Medicaid Services (CMS) has granted preliminary Transitional Pass-Through (TPT) reimbursement for EBR Systems' (ASX:EBR) WiSE CRT system, the world’s first and only wireless solution for pacing the left side of the heart.

The TPT reimbursement is designed to facilitate hospital adoption of breakthrough medical technologies that demonstrate substantial clinical improvement for patients, but whose costs are not yet fully incorporated in standard Medicare payment rates.

TPT reimbursement for WiSE, which was granted US FDA approval in April, will provide hospitals with payment when treating Medicare patients in an outpatient setting for a period of three years.

EBR will continue to engage with CMS through the upcoming annual rulemaking and public comment process, with a final determination to follow.

"We view preliminary approval of TPT reimbursement as a significant commercial milestone, as it not only should support hospital uptake of WiSE for outpatients, but it also should improve the overall value proposition for broader adoption," Jellinek wrote in a note to clients.

Although implants are already underway, Jellinek wrote final TPT approval and a limited market release of WiSE remain on track for October 2025, unlocking access to an initial total addressable market (TAM) of US$3.6 billion.

"Now all eyes will turn towards the sales ramp. As this device is a novel treatment option requiring physician education, we view the LMR, targeting key heart failure centers in the US, as an appropriate strategic way to build familiarity and experience, prior to full market release," he  wrote.

"We see sales surpassing US$80m into CY29.

"While certainly not a ‘hockey stick’, we continue to believe it is a methodical, stage-gated rollout to build strong physician support and closely monitor clinical outcomes, helping to pique interest from any would-be suitor."

Morgans has a buy rating and 12-month target price of $2.86 on EBR.

Morgans sees upside in new listing Tetratherix

Morgans has initiated coverage on wound management house Tetratherix (ASX:TTX), which made its ASX debut on June 30 with a speculative buy rating and 12-month target price of $5.72.

Tetratherix has developed a special material TetramatrixTM, which a fluid-like material that can be injected into the body without triggering a foreign body response and can be used in regenerative medicine and surgery.

Once in the body, the increase in temperature transforms the liquid into a 3D gel-like matrix that adheres to tissues and can be used in various indications to help bridge injuries or support healing.

Initially, the company will develop products targeting three key indications including bone regeneration, tissue spacing, and tissue healing. Management estimates the potential addressable market at US$6.8 billion.

Tetratherix is trading around 19% above its $2.88 a share offer price with funds raised from the listing being used to expand the manufacturing facilities and enable short-term milestones to be achieved including collaborations with larger industry players, clinical trial results and regulatory approvals.

In a note to client Power said achievement of key milestones would drive investor interest with upcoming catalysts including a master agreement executed with an orthopaedic company, expected  in H1 FY 26 and a strategic global partnership with an ophthalmic company expected H1 FY26.

Barrenjoey Markets and Morgans Financial were joint lead managers and underwriters to the Tetratherix IPO.

ImpediMed doubles US sales in June quarter

Medical device company ImpediMed (ASX:IPD) is up ~37% in the past five days after announcing a doubling in US sales during the June quarter.  The maker of a lymphodema detection device called Sozo Impedimed sold 44 units in its target US market in the June quarter, compared with 22 in the March quarter.

Together with the quarterly renewals, total contract value (TCV) for Q4 FY25 was a record at $6.3m, up 29% compared with $4.9m in Q3 FY25.

ImpediMed said nine of the 44 unit sales were secured via a strategic contract with Legacy Health to implement its SOZO Digital Health Platform for lymphoedema prevention in cancer care.

As a result of hitting its prescribed sales target, IPD has unlocked and elected to draw down the second tranche (US$5m) of its US$15 million growth capital facility which was announced in February along with extending the interest only period from 24 to 36 months, providing further flexibility to support growth and commercialisation.

ImpediMed said it was working towards achieving a similar level of sales in Q1 FY26, with improvement in subsequent quarters as the pipeline matures and additional internal initiatives take effect.

"Our focus continues to remain on the installed base growth in the US, which has to date performed below expectation although the announcement was a solid step in the right direction," Wilkie said.

"Reimbursement coverage continues to grow and we expect over the next few quarters over 95% coverage will be achieved (currently 75%)."

Morgans make no changes to its forecasts for ImpediMed awaiting Q4 FY25 cashflow report expected on July 31 to get more detail around rest of world unit sales and operating expenses base.

It has a speculative buy rating on Morgans and 12-month target price of 15 cents.

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Disclosure: The author held shares in CSL at the time of writing. 

Originally published as ScoPo’s Powerplays: Morgans expert Iain Wilkie fills in to talk health stocks as CSL leads a 5pc rally