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Leading broker names the ASX healthcare shares to buy in 2021

increase in asx medical software share price represented by doctor making excited hands up gesture
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Analysts at Bell Potter have been busy finding ASX shares from several industries that they believe are best placed to have a strong 2021.

On this occasion, I’m going to look at the healthcare sector. Here are a couple of shares they rate highly:

AVITA Medical Inc (ASX: AVH)

The first healthcare share that Bell Potter rates highly is AVITA Medical. It notes that the medical device company’s shares have fallen heavily after sales of its Recell spray on skin technology suffered during the pandemic. However, it feels this is a buying opportunity, especially with its sales starting to recover now. Bell Potter has a speculative buy rating and $15.00 price target on its shares.

It commented: “As the US economy returns to normal levels of activity as is anticipated over the course of 2021, revenues are expected to continue to increase rapidly. There are no competing innovative therapies to the Recell technology in the treatment of burns.”

It also notes that management is looking to expand Recell’s use into other lucrative markets.

“The company is proceeding with its program to expand into adjacent markets for the treatment of vitiligo, soft tissue injury (trauma wounds) and paediatric burns. Clinical trials are under way in all three indications with the highest levels of interest in the vitiligo indication. We expect an approval in this indication in later calendar year 2022 or early 2023.”

Starpharma Holdings Limited (ASX: SPL)

Another healthcare share the broker likes is dendrimer product developer, Starpharma. Bell Potter has a speculative buy rating and $2.20 price target on its shares.

Its analysts commented: “It’s already generating revenue through its VivaGel franchise and is also working on improved formulations of leading cancer drugs both internally and with external partners including AstraZeneca.”

The broker also notes that Starpharma has a COVID-19 product which has a lot of potential.

It explained: “COVID-19 has taken centre stage for the company, with the rapid development and reformulation of the active used in its VivaGel products into an anti-viral nasal spray called Viraleze for COVID-19 and other viral infections. The company is leveraging its huge dataset on safety/toxicology on the active to fast track the path to market, with the product expected to be on market in Europe in 1QCY21, less than 12 months since the company first started working on it.”

“Market research indicates the product has wide appeal with its broad anti-viral capabilities, one of the key driving factors of enthusiasm around the product and we expect it will be complementary to other prevention strategies like vaccines & PPE (such as masks) in the fight against COVID-19,” the broker added.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited and Starpharma Holdings Limited. The Motley Fool Australia has recommended Avita Medical Limited and Starpharma Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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