Member Info for Jatw

Pretty decent figures, sales NBP and margin all reported ahead of H1 and well ahead of Q3 2024.

Fully justifies the run up this year - with the Trump / Xi meeting coming there is reason to be hopeful the upward direction of the SP will continue.

Ping A reported earlier today. 9m NBV was ahead 40%.

Pru Wednesday at 10pm

AIA on Friday.

Expect all to be well ahead on 2024 New Business metrics……HK has been particularly strong this year which is a key market for Pru.

In a UK when money is short, the rational policy is to continue to spend on young people (education and early years support) and those that can contribute to build a better skilled workforce/ society and to reduce the amount spent on unproductive elements of the population who are no longer capable of contributing (pensioners, long term sick)…..but people just wont vote for it outside a crisis.

The triple lock should include a maximum increase (and this should also be in govt DB schemes like the private sector) max increase 2.5%. Large future cost increases largely dealt with.

Looking forward to the pipeline presentation next week…..hopefully focused on patient benefit and not too deep in the science.

Not sure they have much left in the locker to spring a late surprise.

RNS setting out the ATTC platform and A251.

Only when they get NDAs or out licensing will it drive the SP

Tenorbas - we dont know how much profit this increase in AUM will result in, but more AUM will result in higher revenue from charges. There is pressure on fees which is slowly reducing the annual fee %s, but the increase in AUM this year is well ahead of fee pressure…so the profit effect is now about how effective they are at managing costs.

I have said it before……the government is driving people to financial advisors, Quilter has one of the largest advisor businesses and should be a beneficiary…..hence I see strong growth for QLT over the next couple of years. The best time to have bought QLT has passed, but this is still a decent entry point given immediate prospects.

Takeda to partner on two Innovent drugs for oncology (one for CRC and nSCLC and an ADC for Gastric/Pancreatic)

IPSEN (owner of Tazverik) buys a small early stage company with an AML candidate.

There are deals being done in spaces that could affect HCMs portfolio..

At the HCM HY results (Takeda Q1), the run rate for Takeda sales was about $320m.

Maintaining this level for Takeda H1 would result in reported sales of approx JPY 24B.

It appeared their US sales were moderating and stabilising after an initial rush of 3L+ cases they are likely moving on to a flow of 3L/4L cases. But the global expansion should be tapping into the global backlog of 4L+ cases….with increasing access to state backed healthcare systems, hence I expect we may see a further uplift in the global run rate.

The Q1 run rate was about USD80m or JPY12bn

If Q2 sales are 13bn, that gives a current run rate of approx USD345m

I think a HY results of JPY25bn will represent significant growth ex-China, a result of JPY24.5bn still shows incremental growth a flat JPY 24bn result would be something of a disappointment.

JPY 26.25bn is a more realistic US$175m and a run rate of $350m (this is a 9% increase but an 18% uplift on Q1)

SCMP reports that a new futures contract will start trading on 28 November covering the HKSE Biotech index.

Said to be of interest to international investors as a risk management tool….so in theory it should boost demand.

It seems the tide is on the turn.

The RCC trial data does look compelling and I am sure China will approve the therapy quite soon (possibly this year). The only questions being whether this is a L1 or L2 approval and how much revenue will they be able to generate from it. It also looks like a strong candidate for overseas expansion for Takeda to consider.

BTW the next Takeda quarterly report is due on 30 October - will they show increasing revenue? The last run rate was about $320m pa

AZ seems to be announcing new partnerships almost weekly……their latest was a virtual predictive assessment of ADCs by an AI tool……HCM will need to explain whether they do something similar on ATTC candidates…..Still not sure what makes ATTC unique.

Glad you clarified, I thought it was a typo/predictive text to avoid.

Re the conversion of debt to equity - the fund will only be converting if they think they can raise more money by owning equity. There have been several conversions in the past.

My view is that if sales improve beating forecasts, then the SP will rise significantly from here. There remains a signficant risk of corporate failure (although receding) and of more dilution through further debt conversions and equity issuance. This is a v high risk investment, a gamble if you like. It will be a safer investment buying at 2 or 3 x current price (if it can get there).

Good thoughts LongOdds

On the M&A side I have two recent deals to comment on:

CK Life Sciences has inserted its cancer vaccine business into a v small US listed business (Transcode). It will initially own 9% of the combined business but has convertible prefs that if converted would give it 90% ownership. That is a potential $100m deal for HCM with a group company should they also want to use a vaccination platform.

Innocare has out licenced its lead drug to Zenos again a small US listed entity. This gives Zenos a future, their shares were up 25%, Innocare fell 11% - there must be some disappointment they could not land a bigger partner and a large up front fee.

I dont see in-licensing as particularly attractive for chinese entities, now that China is a major source of innovation. The products available will be from smaller developers that lack China presence for sales and they may then be taken over by larger outfits. Better to pursue mainland consolidation and get full operational synergies.

Just a public rumour…….it was NatWest last time…..all FTSE companies will have a list of potential targets for M&A, it does not mean they can or will choose to act……the time to get QLT cheaply has passed.

Well that is a positive start to the day. Hard to tell what will move the market these days.

What will the market think?

Dividend increase shows confidence in the future……but the CMA rolls on and on…

Unhooked - they need the cash to achieve their stated strategy to buy and grow brands.

Their products are generally small and are niche products, the hormone products under the H&H brands are the closest they have to a high growth set of products. At the results call they talked about having significant firepower, I suspect they will find it tricky to land a deal in the value enhancing category and move the dial. To move the dial, they probably need to spend £50m which would mean the new business is bigger than the existing one. A couple of £5m deals are not going to change perceptions much.

I wonder if they will produce a significant upside surprise (eg a really good PDAC read out) or major news about their first drug on the new platform (likely).

Otherwise, it could be a rehash of the recent conference announcements.

StevieWonder - The FY trading update moved the FY results to 7 October (tomorrow), I cant find a reference to 5 November (unless you were suggesting it would be a bonfire set of results).

The further CMA delay means we need these results.