Scott Power: ASX health stocks dip but it was a good news week for EMVision
EMVision appoints Ramsay Health Care CEO to board and expands sites of pivotal trial
First Japan site opens for Dimerix's phase III clinical trial of DMX-200 in rare kidney disease
Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 27 years, gives his take on the ASX healthcare sector for the week and his 'Powerplay' stock pick.
Power said that, while healthcare markets were down this week, broader markets remained elevated with things starting to look more positive at the halfway mark of a thus-far volatile 2025.
US President Donald Trump's trade and health policies have been impacting the sector throughout the year.
At about lunchtime on Friday the S&P/ASX 200 Health Care index was down 0.82% for the past five days, while the benchmark ASX 200 rose 1.26% for the same period.
"The broader market is up this week and May was a reasonably good month," he said.
"We are coming up to June 30 and the end of financial year so there will be some tax-loss selling coming through across various portfolios.
"June tends to be a weaker month as investors look to clean up their portfolio, while July seasonally tends to be a stronger month and there is potentially some good value out there across the smaller names which really haven't done too much for the last couple of years."
Ramsay CEO joins EMVision board, trial expands
EMVision Medical Devices (ASX:EMV) has had two major announcements this week including the appointment of Ramsay Health Care (ASX:RHC) CEO Carmel Monaghan as non-executive director and broadening of a pivotal trial for its emu bedside brain scanner, which is designed to rapidly diagnose stroke.
Monaghan has worked across hospital, corporate and global positions at Ramsay for almost three decades.
"She is highly regarded and will bring a lot of credibility and contacts into the business," Power said.
He said EMvision was also making good progress with the activation of its third US site, Mount Sinai Hospital in New York, scheduled for this month.
Activation of its second Australian site, Liverpool Hospital in Sydney, has also been in progress this week.
Five world-leading hospitals in stroke care are now taking part in EMVision's pivotal trial with a sixth set to be activated shortly.
The pivotal (validation) trial is designed to support US Food and Drug Administration (FDA) de novo (new device) clearance of the emu point-of-care brain scanner device.
"The expectation is that they will get approval sometime in 2026," Power said.
Power's Powerplay: Big year for Dimerix
Dimerix (ASX:DXB) is Power's stock of the week after announcing it had opened the first trial site in Japan for its ACTION3 phase III drug candidate DMX-200 to treat focal segmental glomerulosclerosis (FSGS) kidney disease.
Opening of Japan's first clinical trial site for ACTION3 triggers the first development milestone payment of ¥400 million (~A$4.3m) to Dimerix from FUSO Pharmaceutical Industries Ltd, its exclusive licensee of DMX-200 for FSGS in Japan.
FUSO is one of four regional licensing deals executed for DMX-200, which collectively provide up to ~$1.4bn in total upfront payments and potential milestone payments, plus royalties on net sales.
FSGS is a serious kidney disease that causes progressive scarring, leading to permanent damage and, ultimately, end-stage kidney failure – often requiring dialysis or a transplant.
It affects adults and children and no treatments are currently approved specifically for the condition anywhere in the world, affecting overall prognosis.
As a result, DMX-200 has received orphan drug designation in both the US and Europe, along with the UK's equivalent designation under the Innovative Licensing and Access Pathway (ILAP).
Dimerix last year reported positive interim results from the ACTION3 trial, showing DMX-200 was performing better than placebo in reducing proteinuria with no safety concerns to date. Full enrolment in the ACTION3 study is expected by the end of 2025 with a further blinded interim analysis planned.
"It's going to be a big year for Dimerix," Power said.
Mayne Pharma takeover deal far from over
Adelaide-headquartered pharmaceutical company Mayne Pharma (ASX:MYX) is continuing to do battle with its US-based suitor Cosette Pharmaceuticals after announcing on Wednesday it had received a notice "purporting to terminate" the $7.40 per share offer worth more than $600 million.
The withdrawal comes after Cossette asserted that a "material adverse change" had occurred, and consequently freeing Cosette from its obligations under the scheme implementation deed (SID).
The announcement sent the stock lower and came hours after Mayne put out another one telling the market it had not received a notice of termination, which sent its shares higher.
On Thursday Mayne put out another announcement saying the scheme meeting would go ahead on June 18, as scheduled with the stock rising more than 7%.
"Mayne Pharma directors continue to unanimously recommend that vote in favour of the scheme resolution at the scheme meeting, in the absence of a superior proposal," said chairman Frank Condella.
However, the company needs a court decision to affirm its view that the "material adverse change" were not, in fact, material.
"There is a fair bit more water to flow under the bridge with this one and it just looks very messy at the moment," Power said.
ReNerve enters partnership to expand product range
Biotech company ReNerve (ASX:RNV) this week announced it had entered a strategic partnership with US-based Berkeley Biologics LLC to develop and commercialise two new complementary tissue-based product ranges.
The first range addresses the need for human dermal tissued, deeper layers of the skin often sourced from donors.
The second product range will provide amniotic tissue products, which are known for their regenerative and healing properties.
The products are set to be produced at Berkeley Biologics' California facility and launch before the end of CY25.
ReNerve said the new products represent a natural extension of its existing sales activities, leveraging the same sales network and continuing to target the same surgeon and hospital customer base.
The company said surgeons could incorporate additional tissue grafts when treating nerve injuries, enabling them to address both the damaged nerve and any associated trauma.
"It is a strong indication that they're trying to build their sales momentum by expanding the product offering to the surgeons," Power said.
"Sales are expected to grow over subsequent quarters."
The views, information, or opinions expressed in the interview in th is article are solely those of the interviewee and do not represent the views of Stockhead.
Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
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His message is to get checked early to avoid the worst side effects of serious treatment. "If you really think something is wrong, go get a second opinion."
