The healthcare sector has been one of the top-performing ASX industry sectors during the coronavirus crisis. This is only likely to continue over the next 6 months due to a high and continuing demand for a range of healthcare products and services.
Here we look at three S&P/ASX 200 Index (ASX: XJO) healthcare shares that have seen strong share price rises today: Ramsay Health Care Limited (ASX: RHC), ResMed Inc (ASX: RMD) and Avita Medical Ltd (ASX: AVH).
Three other ASX healthcare shares that are likely to continue to be well placed during the coronavirus crisis due to strong demand for their products are CSL Limited (ASX: CSL), Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) and Ansell Limited (ASX: ANN).
Avita Medical
Avita Medical shares are up strongly by 8.51% today following the preliminary release of its third-quarter results and a coronavirus update.
Avita Medical revealed that total revenue for the third quarter had risen strongly by 21% over the previous quarter to $6 million. Meanwhile, US RECELL sales came in at US$3.9 million, an increase of 22%. Total cash on hand increased 4% on the previous quarter and is currently sitting at $129.9 million.
Avita Medical appears to be in a relatively strong position to ride out the crisis because although some US health institutions are currently facing restrictions, burn procedures are generally not seen as elective procedures and severe cases can't be deferred.
The healthcare company, however, did acknowledge in its announcement today that it has experienced a dramatic reduction in face-to-face interactions with existing, new and potential customers.
ResMed
ResMed shares have also performed strongly today, up by 8.46% at the time of writing. While the ResMed share price initially fell in the weeks following the start of the market crash in mid-February, it has rebounded back strongly, particularly since 23 March.
Although ResMed is a global leader in respiratory medical equipment for the treatment of sleep apnoea, the company is very cleverly modifying its manufacturing plant and sleep apnoea production lines in order to meet the rapidly growing demand for ventilators and face masks. This comes as the number of US cases of COVID-19 has sharply increased over the past week, especially in New York State.
As a result, ResMed aims to triple its production of regular ventilators, while increasing the production of face masks even more.
Ramsay Health Care
Like ResMed, while initially seeing a downward trend in its share price, Ramsay has been experiencing some share price uplift in the past week or two.
As a private hospital provider that does a lot of elective procedures, Ramsay shares were sold off as many elective procedures were cancelled. However, as the coronavirus crisis has further intensified, it has become apparent that private hospitals will play an increasingly important role in the crisis due to the critical shortage of public hospital beds.
Ramsay shares are up by 5% so far today to $59.90, taking total gains over the past two weeks to nearly 16%.
