My top ASX healthcare share picks for 2019

The healthcare sector is always viewed with high scepticism as it’s difficult to invest without being a subject matter expert. But with this high barrier to entry comes a huge opportunity to capture alpha.

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Health technology shares

The healthcare sector can be viewed with high scepticism as it’s difficult to invest without being a subject matter expert. But with this high barrier to entry comes a huge opportunity to capture alpha.

To make it easier for you, I’ve put together top 3 healthtech recommendations that have performed extraordinarily this year.

PolyNovo

PolyNovo Limited (ASX: PNV) commercialises skin-supplement products to treat dermal ailments. Though its share price has slid 15% to $2.19 in the last 2 weeks, this is still a 265% increase in the year-to-date.

Its success is widely attributed to the sales of its flagship product, the NovoSorb BTM. This is a wound dressing, treating dermal structures which require a split-thickness skin graft. In this year alone, PolyNovo has expanded its operations beyond Australia. It now sells within New Zealand, USA and the UK, which has driven its sales 435% higher in 2019.

Accelerating NovoSorb BTM sales drove the company’s net loss after tax 46% lower, to just $3.19 million. This is despite the company’s research and development costs for a new product in the pipeline that supports hernia repair.

While it is certainly a risky bet, I’m expecting PolyNovo to continue growing its share price as it expands aggressively across the globe.

Nanosonics

Nanosonics Ltd (ASX: NAN) creates and distributes the trophon EPR, an ultrasound probe disinfector which eliminates ultrasound-related cross-infections.

The company’s share price has softened slightly this week, though its year-to-date return on investment still paints a lucrative picture. Up 134% to $6.63, Nanosonics has had a phenomenal 2019, acutely outperforming the ASX.

This outperformance was driven by its glowing FY19 results. The company reported that operating profits rose 201% to $18.8 million, with revenue 39% higher, hitting $84.3 million. While the trophon EPR makes up a large portion of Nanosonics’ sales, the company also sells associated consumables and services. This increases customer share of wallet, further contributing to growing revenue numbers as another 18% of global installed users are now on board.

Nanosonics also launched trophon2 this year in the US and received strong feedback. The company will also be distributing in Japan in the next few months, which is a strong indicator of future growth.

Opthea

Opthea Ltd (ASX: OPT) develops biological therapeutics for eye diseases, particularly those associated with blood and lymphatic vessel growth and vascular leakage.

Opthea’s share price has slid 9.35% in the last week to be trading for $3.39 at time of writing. However, this is still more than a 500% increase in share price in the year-to-date.

In light of its success in its Phase 2b trials of the product OPT-302, investors have been quick to snap up the company’s shares. OPT-302 is a combination therapy for treatment-naïve patients with wet age-related macular degeneration, and the company has reported that trial results reflected statistically superior primary efficacy outcomes.

While this is still early days, its rocketing stock price is a reflection of investor confidence in the commercialisation of OPT-302.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

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*Returns as of August 16th 2021

Audrey Thehamihardja has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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