ASX healthcare shares have outperformed in the past 12 months. The broad index, represented by the S&P/ASX 200 Index (ASX: XJO), is up 10.5% in that time.
Meanwhile, the S&P/ASX 200 Health Care Index (ASX: XHJ), a proxy for the large-cap healthcare sector, has rallied by 15%.
With most of the market concentrated on the US interest rate decision overnight, these two ASX healthcare shares have released positive updates worth analysing. Let's take a look.
ASX healthcare share expands portfolio
AVITA Medical Inc (ASX: AVH) announced a significant expansion to its portfolio in an update today.
The regenerative medicine company has entered into an exclusive development and distribution agreement with Regenity Biosciences.
AVITA's partnership gives it the rights to a unique collagen-based dermal matrix following 510(k) clearance by the US Federal Drug Administration (FDA).
A 510(k) clearance is the regulatory approval for medical device manufacturers to market their products in the USA.
Jim Corbett, CEO of AVITA, said the collaboration adds to the company's growth.
This strategic collaboration significantly strengthens our portfolio and advances our long-term growth objectives.
By integrating Regenity's innovative collagen-based solutions with our RECELL technology, we aim to establish a new standard of care with a one-stage closure, thereby improving patient outcomes.
Once cleared, the new product will be marketed and sold under the AVITA Medical brand in the US, EU, Australia, and Japan.
AVITA plans to initiate clinical studies in 2025 to establish the synergies between the new dermal matrix and its recently approved RECELL label.
Analysts at Morgans recently highlighted AVITA as a small cap to watch. It rates the stock a buy with a $5.60 price target on the ASX healthcare share.
Sonic Healthcare secures long-term debt funding
Sonic Healthcare Ltd (ASX: SHL) also updated the market today. Whilst the announcement wasn't market sensitive at all, the ASX healthcare share advised of its plans to raise 400 million Euros in long-term debt.
Funds will be raised in the US private placement market through a series of notes with maturities of 7, 10, and 15 years. The notes will have an average fixed coupon of approximately 4.1%.
The proceeds will initially repay bank loans and refinance 185 million Euros of debt set to mature in November this year.
Chris Wilks, Sonic's CFO said the firm was "delighted with the outcome", and that debt raise was "strongly supported by both existing and new investors to Sonic."
Despite the ASX 200's rise in 2024, Sonic Healthcare has struggled. It is down 14% this year.
According to my colleague Mitch's recent analysis, the COVID-19 pandemic had boosted Sonic's revenues significantly due to increased demand for testing. However, this demand has dwindled, impacting its revenue growth.
The ASX healthcare share is rated a hold by consensus, according to CommSec. The hold recommendation includes five buys, eight holds, and four sell ratings.
Foolish takeout
ASX healthcare shares continue to show strength in 2024. But the growth is uneven. Avita is down more than 30%, and Sonic shares have slipped 14% in the red.
Whilst today's updates are welcomed, long-term thinking is still essential. Always remember to conduct your own due diligence.
