Investment site MarketIndex regularly aggregates the ratings of analysts from different brokerages to provide a market consensus on ASX shares. This consensus can be used to uncover ASX shares that warrant further investigation.
Here are 2 ASX healthcare shares with ‘buy’ recommendations (and no ‘sell’ recommendations) that could be worth a closer look.
Clinuvel Pharmaceuticals Limited (ASX: CUV)
Clinuvel is rated as a ‘buy’ by 1 analyst. Clinuvel is a biopharmaceutical company focused on developing treatments for genetic and skin disorders. The company delivered a return on equity of 27.97% in FY17, 32.3% in FY18, and 31.57% in FY19.
In December, Clinuvel submitted an application to the TGA for its drug Scenesse to be registered in Australia. Scenesse can be used to treat a rare metabolic disorder, erythropoietic protoporphyria (EPP), which causes severe phototoxic reactions to sunlight. There are currently no other approved treatments for the disorder in Australia. Scenesse was approved in the European Union to treat EPP several years ago and was approved in the United States in October.
In FY19, Clinuvel revenues increased nearly 22% to $31.02 million, while expenses rose only 8% year on year. Net profit before tax increased 40% to $14.38 million, and basic earnings per share of 37.6 cents were recorded, up 35.7%. Clinuvel declared its maiden dividend in FY19 and paid total dividends of 4.5 cents a share in 2019, unfranked.
Avita Medical Limited (ASX: AVH)
Avita Medical is rated as a ‘buy’ by 3 analysts. Avita Medical is a regenerative medicine company specialising in spray-on skin therapy for dermal applications. Avita’s lead product, the RECELL System, is currently used to treat burn wounds but is also being assessed for use in treating vitiligo, traumatic wounds, scar reconstruction, and for aesthetic indications.
More than 50% of US burn surgeons and centres are now trained on the RECELL System and 56 of 132 US burns centres have placed orders for it. Total revenue in the September quarter was $7,900,000, an increase of 165% over September 2018 revenues of $2,972,000.
An announcement regarding a collaboration using the system for rejuvenation is expected in 1H20. Capturing just 5% of the skin rejuvenation market could represent a >$500 million opportunity for the company.
Each of these 2 ASX healthcare shares has a unique product that looks poised for further growth. It could definitely be worth watching these shares over the next couple of years to see their expansion.
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Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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