Tag: Motley Fool

The Mayne Pharma Group Ltd (ASX: MYX) share price is leaping higher today, up 7.58% in late afternoon trading.

This will come as welcome news to shareholders who saw Maybe Pharma’s share price fall 11% in the 4 days following the release of its full year 2020 financial results on 21 August. Investors sold off shares after the company reported a 13% fall in revenue and a net loss after tax of $93 million.

Mayne Pharma’s share price, like most shares on the ASX, was savaged during the COVID-19 panic selling earlier this year, falling 59% from 20 January through to the low on 19 March. Since that low, the Mayne Pharma share price has rebounded to gain 74%. Year-to-date it’s down 23%.

By contrast the All Ordinaries Index (ASX: XAO) is down 11% in 2020.

At the current price of 36 cents per share, Mayne Pharma has a market cap of $596 million.

What does Mayne Pharma do?

Mayne Pharma Group is a technology driven pharmaceutical company. It applies its drug delivery expertise to commercialise branded and generic pharmaceuticals with expertise in formulating complex oral and topical dose forms. The company also provides contract development and manufacturing services to more than 100 clients worldwide.

Mayne Pharma has product development and manufacturing facilities in Salisbury, Australia and Greenville, North Carolina in the United States. The company has a global reach through its distribution partners in Australia, North America, Europe and Asia.

Mayne Pharma shares first traded on the ASX in 2007.

Why is the Mayne Pharma share price up today?

The Mayne Pharma share price is surging today on no major breaking news.

Large daily share price swings aren’t all that unusual for Mayne Pharma. Today’s surge is likely due to several factors.

Following the recent selloff, investors are seeing value at the company’s current share price. While its revenues were down over FY19, its international sales grew 4% year-on-year.

Investors may also be buying shares ahead of any news on Mayne Pharma’s Nextstellis contraceptive product. The company has already received US FDA filing acceptance and is in the process of completing the licensing procedures in the US and here in Australia.

With other projects in the pipeline also progressing, today’s share price rise could indicate good news to come. Or, at least, expectations thereof.

More reading

• Auscann (ASX:AC8) share price up 6% on phase I study results
• How the China rift could spur these ASX tech share prices to new records
• ASX 200 Weekly Wrap: ASX 200 hits 4 straight weeks of losses
• Why the Retail Food Group (ASX:RFG) share price is up 4%
• Myer (ASX:MYR) share price dives 15% as FY20 results fail to impress

Motley Fool contributor Bernd Struben 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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I think there are a few ASX shares that would definitely be worth buying if there’s another crash.

The COVID-19 crash during March was a great opportunity to buy businesses at much cheaper prices. Just look at how much shares like Afterpay Ltd (ASX: APT), Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW) have risen since March.

There are some ASX shares that I’ve got my eye on in-case there’s another crash:

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical is one of the most promising listed fund managers in my opinion. It’s one of the few managers consistently growing funds under management (FUM). Magellan Financial Group Ltd (ASX: MFG) is a great manager, but its market cap is around 20 times bigger than Australian Ethical. I think the ethically-focused manager has more growth potential.

FY20 was a solid year with Australian Ethical’s funds under management (FUM) rising by 19% to $4.05 billion with net inflows of $660 million (doubling compared to FY19). Excluding performance fees, revenue and underlying profit after tax (UPAT) both rose by 15%. Reported net profit grew by 46% to $9.5 million.

What I find particularly attractive about the ASX share is that it is a superannuation provider. Superannuation FUM has a lot of growth potential due to the mandatory contributions and the tax advantages.

Fund managers are very scalable businesses. Once the foundations are set up, most of the new FUM just adds to profit. Occasionally Australian Ethical may need to add a few more employees, but more FUM should allow it to grow profit and occasionally cut fees which will help grow FUM even faster.

Australian Ethical’s balance sheet is in a strong position. It has no debt and it had $21.4 million of cash at the end of FY20.

I like that the company is steadily growing its dividend. In FY20 it grew its dividend by 20% to 6 cents per share, including a special performance fee dividend of 1 cent per share.

Altium Limited (ASX: ALU)

Altium is one of the highest-quality ASX shares in my opinion. It has long-term focused management with an aim of being the clear number one electronic PCB software business in the world.

The ASX share has already won over many of the world’s best businesses as clients like Space X, Apple, Microsoft, Google, Disney, Tesla, John Deere and so on.

Altium has a strong balance sheet with no debt. Its cash balance grew by 16% to US$93 million, which is the best way to keep the business strong during this difficult period.

I thought it was a good sign for future profit growth that Altium grew its subscription base by 17% to 51,006 in FY20 with a 15% increase in new Altium Designer seats sold to 9,251.

The ASX share is committed to regularly updating its software for users, which is an attractive proposition if it’s constantly improving. Subscribers are more likely to upgrade to Altium 365 – the cloud offering – if people think it’s the best and will keep getting better.

Altium expenses all of its research and development. This is good and means Altium’s valuation isn’t as crazy compared to other businesses which have high levels of depreciation and amortisation that spread out the expense over multiple years.

The ASX share is steadily growing its dividend for investors. Long-term investors are now getting a solid yield on their original cost. However, at the current Altium share price it only offers a starting dividend yield of 1.2%.

It’s currently trading at 52x FY22’s estimated earnings.

Foolish takeaway

I think both of these ASX shares are very high-quality and worth being in a portfolio. However, despite falling in recent weeks, both are still quite pricey. I’d be more happy to buy both Altium and Australian Ethical shares if they fell another 10%.

More reading

• 4 of the best ASX 200 shares to buy in September
• Is the Altium (ASX:ALU) share price a strong buy?
• Could these exciting small cap tech shares be the next Afterpay (ASX:APT) and Altium (ASX:ALU)?
• Should you buy these beaten down ASX 200 shares?
• 3 outstanding ASX shares to buy and hold for decades

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd., Kogan.com ltd, and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Australian Ethical Investment Ltd., Kogan.com ltd, and Temple & Webster Group Ltd. 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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The Sezzle Inc (ASX: SZL) share price has fallen 45.28% in the last 2 weeks. It closed today at $5.86 after trading at $10.27 only 2 weeks ago. This comes as the buy now, pay later (BNPL) sector sees investor enthusiasm moderating.

Why is the Sezzle share price falling

The Sezzle share price has fallen in line with the rest of the BNPL sector which boomed to new highs before dropping recently as investors exited the ‘overvalued’ sector.

While the company’s share price has now fallen significantly from its high of $11.83 last month, it is still up 238.55% since the beginning of the year when investors crowded to buy into BNPL companies. This trend appears to be turning around as investors start to see that the sector could be overinflated relative to future earnings of companies that offer BNPL services.

Investors are also concerned about competition, with payments giant PayPal recently announcing it was entering the sector. It may be hard for Sezzle and other buy now pay later providers to compete with PayPal’s existing size and customer reach and this may concern investors.

In August, Sezzle released record results for the half year to 30 June 2020. Underlying merchant sales rose 338% year on year to $445.20 and total income rose 384% year on year to $30.1 million. Merchant fees increased 390% year on year in the half year to 30 June 2020. Sezzle had 1.5 million active consumers on its platform at 30 June 2020 and 16,112 active merchants.

In August, Sezzle announced that it had raised $7.2 million through a securities purchase plan at a price of $5.30 per share. This followed an institutional placement in July through which Sezzle raised $79.1 million at $5.30 per share. 

In July, Sezzle announced a partnership with Plaid to allow US customers to link their bank accounts to the Sezzle platform. 

About the Sezzle share price

The Sezzle share price is up 1505.71% since its 52-week low of 35 cents and up 238.55% since the beginning of the year. The Sezzle share price is up 178.85% since this time last year.

More reading

• Are higher P/E ratios really here to stay?
• 3 exotic ASX tech ETFs you might want to add to your portfolio today
• Why the Afterpay (ASX:APT) and Sezzle (ASX:SZL) share prices are falling again today
• Tech shares lead ASX rebound but Afterpay (ASX:APT) faces mounting competition
• Why the Laybuy (ASX:LBY) share price is tanking today

Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia has recommended Sezzle Inc. 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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I love ASX shares that offer investors both growth and income prospects. Both are equally important when it comes to total shareholder returns. Yet some investors prefer growth over income or vice versa. I’m not so picky, and as such if a company is offering good growth prospects with a growing income stream on the side, I’ll be interested. So here are 2 ASX shares that I believe offer just that this week.

MFF Capital Investments Ltd (ASX: MFF)

MFF is a Listed Investment Company (LIC) and one of my favourite companies on the ASX. As a LIC, MFF invests in a portfolio of other shares on behalf of its owners. In MFF’s case, these shares are usually located in the United States. It currently holds a portfolio of growth-orientated companies, the largest of which are US payments giants Visa Inc (NYSE: V) and Mastercard Inc (NYSE: MA). Other holdings (as of 31 August) include Home Depot Inc (NYSE: HD), Berkshire Hathaway Inc (NYSE: BRK.B) and Microsoft Corporation (NASDAQ: MSFT).

MFF is a growth-focused LIC at its core. But it has also recently beefed up its income chops. MFF has been paying a small but growing dividend over the past few years. It will be paying a 3 cents per share dividend in November, up from the 2.5 cents per share that was paid out in MFF’s 2020 interim dividend. If MFF pays out 6 cents per share in dividends in FY21, it gives MFF shares a forward dividend yield of 2.32% on current pricing. But it gets better. In its 2020 earnings report, MFF’ management declared that they intend to increase MFF’s annual dividend to 10 cents per share over the next few years. That would equate to a forward yield of 3.86%. As such, I think this is a top share for both growth and income today.

iShares Global 100 ETF (ASX: IOO)

Our second ASX share for growth and income is this exchange-traded fund (ETF) from BlackRock’s iShares. IOO holds 100 of the largest companies across the advanced economies of the world. You’ll find all of the big American companies here like Apple Inc. (NASDAQ: AAPL), Facebook, Inc. (NASDAQ: FB) and Amazon.com, Inc. (NASDAQ: AMZN), as well as some other names like Nestle and Toyota that you might be familiar with.

IOO has been a solid performer over the past decade, delivering an average return of 13.1% per annum. But IOO is also a solid income share. It currently offers a trailing yield of 1.56%, which should rise next year when the worst of the pandemic is behind us, in my opinion. As a rock-solid investment that offers growth, income and stability, I think IOO is a great option to consider.

More reading

• Here’s how to make a $1 million portfolio by investing $1,000 a month
• 2 ASX shares perfect for beginners in 2020
• 3 top ASX shares I would love to buy this September
• 2 ASX dividend growth shares I would buy right now
• 2 ASX shares I’d invest $1,000 into EVERY month

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Facebook, Magellan Flagship Fund Ltd, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Berkshire Hathaway (B shares), Facebook, Mastercard, Microsoft, and Visa and recommends the following options: long January 2022 $1920 calls on Amazon, short January 2021 $200 puts on Berkshire Hathaway (B shares), short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, short September 2020 $200 calls on Berkshire Hathaway (B shares), long January 2021 $200 calls on Berkshire Hathaway (B shares), and long January 2021 $85 calls on Microsoft. The Motley Fool Australia has recommended Amazon, Apple, Berkshire Hathaway (B shares), Facebook, and Mastercard. 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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Althea Group Holdings Ltd (ASX: AGH) shares have today surged on a new license announcement. At the time of writing, the Althea share price is up 11.2% to 64.5 cents after reaching as high as 67 cents during intraday trading. This morning, Althea announced its wholly-owned subsidiary, Peak Processing Solutions, will commence operations following its cannabis licence approval in Canada.

What’s moving the Althea share price?

The Althea share price rocketed higher after Althea advised Peak Processing Solutions has reached a major milestone in receiving a successful grant from Health Canada. The Standard Processing Licence will allow the company to begin commercial operations for its Cannabis 2.0 products.

The 3,716 sqm facility in Tecumseh, Ontario will be one of the first large-scale independent processing facilities to manufacture and distribute cannabis products.

The processing house will specialise in cannabis-infused beverages, concentrates and topicals. These products will be produced by Peak on behalf of third parties and also supplied to parent company Althea. It is anticipated that this will greatly reduce Althea’s cost of goods sold.

Peak aims to achieve C$25 million in revenue within the first 18 months.

Manufacturing and distribution agreement

In addition to the obtaining the licence, Peak signed an agreement with Blum Beverage Company Inc.

Under the agreement, the Canadian non-alcoholic beverage company will be able to place orders for Peak to manufacture and distribute. The beverages will contain 5 mg of tetrahydrocannabinol (THC) on behalf of Blum.

Althea advised that the exact commercial terms of the partnership were not disclosed and remain confidential.

The new agreement with Blum co-exists with Peak’s previous binding production agreement with Collective Project Limited.

The company hopes that the new licence and inclusion on Health Canada’s list of licensed producers will help accelerate negotiations with various customers.

What did the CEO say?

Althea CEO, Josh Fegan, was pleased about the Canada licencing news, commenting:

This is a major milestone and will allow Peak to immediately commence production of cannabis-infused canned beverages for Collective Project and Blum, sign further customers who were waiting for the licence to be granted, and start supplying our own pharmaceutical operations with finished (Althea) products at a drastically lower cost than we currently pay to third party suppliers.

Addressable market opportunity

Peak believes that the market for its Cannabis 2.0 products is underserved. Retailers have suffered stock shortages since it was regulated for sale in January 2020.

Recent research by Deloitte estimates that the Cannabis 2.0 market is worth nearly C$2.7 billion annually. This is broken down by cannabis extract-based products, and beverage products accounting for C$1.6 billion and C$1.07 billion, respectively.

Furthermore, it is also estimated that one in four Canadians are either consuming or likely to consume Cannabis 2.0 products. This is due to the discrete and accessible offering which enables consumers to enjoy the product without the social stigma. This 25% market opportunity represents a strong growth from the current 11% that Canadians already consume.

About the Althea share price

The Althea share price has been on the mends of late, rising 84% in the past month. The Althea share price is down 25% since reaching its 52-week high of 85.5 cents.

More reading

• Why Althea, BrainChip, Rio Tinto, & Starpharma shares are pushing higher
• Why Althea (ASX:AGH) and these ASX cannabis shares are smoking the market today

Motley Fool contributor Aaron Teboneras 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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Investing in China is something of a controversial topic. Over the past couple of years, China’s relationships with both Australia and the United States have unquestionably deteriorated. Both China’s political and economic models of governance remain controversial and as such, many Australians might be feeling uneasy about investing in China directly. Even so, China remains a fertile hunting ground for many investors. It’s one of the fastest-growing economies among the emerging markets of the world, and its unique commercial landscape affords many interesting opportunities. So how does one easily invest in China and Chinese businesses from the comfort of Australia?

Well, I think the best way to do so is through exchange-traded funds (ETFs). Here are 2 ASX China EFTS that investors can choose from today for exposure to the Chinese market.

iShares China Large-Cap ETF (ASX: IZZ)

This ETF from iShares is our first ASX option. It holds 50 of the largest companies listed in mainland China with a simple weighting method based on pure market capitalisation. IZZ’s 5 largest holdings include Meituan Dianping, Tencent Holdings, China Construction Bank, Xiaomi Corp and Ping An Insurance Group.

IZZ charges a management fee of 0.74% per annum, offers a trailing dividend distribution yield of 2.44% and has returned an average of 5.68% over the past 5 years.

VanEck Vectors China New Economy ETF (ASX: CNEW)

This ETF from VanEck is slightly different. It holds 120 companies and focuses on ‘sound companies’ with the ‘best growth prospects’ in the tech, healthcare, consumer staples and consumer discretionary sectors.

CNW’s 5 largest holdings are as follows: Zhejiang Meida, UE Furniture Co, Guandong Biolight, Xiamen Jihong Technology and Shenzhen Kingkey Smart.

This ETF charges a management fee of 0.95% per annum, offers a trailing dividend distribution of 1.15% and has returned an average of 45.98% since its inception in November 2018. While that might look like a ridiculous return, it’s worth noting that the index CNEW tracks has returned a tamer average of 12.76% per annum over the past 5 years.

Foolish takeaway

If I had to choose one of these ASX China EFTS, I would have to go with the latter option – the China New Economy ETF. Although it has a higher management fee at 0.95%, its performance and tilting toward the higher-growth side of the market offset this nicely in my view. While I wouldn’t expect 45%+ returns every year going forward, I think this is a great ETF that would serve investors well in a portfolio today.

More reading

• These ASX ETFs will give you exposure to China’s growing middle class
• 3 high quality international ETFs for ASX investors to buy right now

Motley Fool contributor Sebastian Bowen 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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Investors may need a change in investment strategy if they want to make the best returns from ASX stocks in the post COVID-19 world.

The resumption of clinical trials testing the University of Oxford/AstraZeneca vaccine is fuelling hope that treatment can be available in early 2021.

Global bull markets will likely find a second wind as this turns into a reality but it won’t be the COVID-19 ASX outperformers that will lead the next charge.

Best ASX stocks to buy are the biggest COVID losers

The stocks that have so far outperformed the S&P/ASX 200 Index (Index:^AXJO) are those that profited from the socially distance environment.

These include the likes of the Afterpay Ltd (ASX: APT) share price and Kogan.com Ltd (ASX: KGN) share price – just to name a few.

If an effective vaccine is found, it’s the biggest coronavirus losers that will come roaring back. Macquarie Group Ltd (ASX: MQG) asked its analysts which of the ugly ducklings are most likely to blossom into a swan, and they hatched four ideas.

A healthy COVID-19 recovery stock

The first is the Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price. The hospital operator is the top pick in the health sector as there is a notable improvement in surgical activity outside of lockdown central Victoria.

The nationwide lockdown had forced many routine hospital procedures to be postponed but the resumption of surgeries is only one tailwind for Ramsay.

“Opportunities for increased interaction with the public system in order to reduce public waiting lists have been highlighted both in Australia and the UK,” said Macquarie analyst David Bailey.

“In addition, activity levels in France/Nordics were ahead of expectations in June (with a positive result for the month).”

A winning bet

Another stock that’s tipped for a re-rating is the Star Entertainment Group Ltd (ASX: SGR) share price.

Casino operators have been among the hardest hit from the pandemic and Star Entertainment is the best one to bet on in this sector, according to Macquarie analyst David Fabris.

The stock enjoyed a number of favourable outcomes recently, including a 20-year casino slot exclusivity for Star Sydney and securing Gold Coast exclusivity at no cost.

Tasting the recovery

Meanwhile, the top pick in the consumer space is the United Malt Group Ltd (ASX: UMG) share price. COVID restrictions had a big impact on on-premise alcoholic consumption but there has been month-on-month improvement in volumes since April.

“COVID-19 is having a short-term impact on beer volumes given the restrictions to on-premise. Sequential improvement in volumes at a modestly faster pace than expected is pleasing to us,” said the broker’s analyst David Pobucky.

“UMG also still looks attractive relative to global brewer peers, trading at a 4% discount, although the discount has narrowed recently.”

Defensive growth play

The Sealink Travel Group Ltd (ASX: SLK) share price is the fourth pick even though the stock performed better than most through the COVID-19 mayhem.

“SeaLink’s share price strength in recent months is reflective of its defensive earnings from public transport and commuter businesses,” said Macquarie analyst Marni Lysaght.

“While we continue to find such characteristics appealing and a key reason for exposure to SeaLink, we have high conviction of further upside being realised.”

This conviction is driven by contract wins, acquisition opportunities, bus contract renewals, further opportunities from social distancing and the reopening of domestic and international borders.

More reading

• The latest ASX 200 stocks that top brokers just upgraded to “buy”
• Why the Austal (ASX:ASB) share price is moving today
• ASX 200 up 0.4%: Macquarie guidance disappoints, Cleanaway sinks on CEO behaviour reports
• Why Cleanaway, De Grey, Macquarie, & Zip shares are dropping lower
• Macquarie (ASX:MQG) share price sinks lower on FY 2021 guidance update

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Ramsay Health Care 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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The benchmark S&P/ASX 200 Index (ASX: XJO) is home to a large number of quality options for investors to choose from.

Four that I think could be standout picks for investors right now are listed below. Here’s why I think they would be great options:

Altium Limited (ASX: ALU)

The first ASX 200 share to consider buying is Altium. Due to its key Altium Designer product and its exposure to the rapidly growing Internet of Things and artificial intelligence (AI) markets, I believe Altium can grow its revenue and earnings at a very strong rate over the next few years. Combined with its other growing businesses, I believe it is well-positioned to achieve its revenue target of US$500 million by FY 2025/2026.

Appen Ltd (ASX: APX)

Another top ASX 200 share to consider buying right now is Appen. It is a fast-growing developer of high-quality, human-annotated training data for machine learning and AI. Given how the markets it operates in are expected to grow materially over the next decade and beyond, I believe it can continue its impressive form for a long time to come.

Goodman Group (ASX: GMG)

I believe this commercial and industrial property company is an ASX 200 share to buy. Due to the strength of its portfolio and future property developments, I believe Goodman is well-placed for long term growth. Especially given its exposure to growth markets such as ecommerce. In this market Goodman counts Amazon, DHL, and Walmart as tenants.

SEEK Limited (ASX: SEK)

A final ASX 200 share which I think would buy is SEEK. I think the job listings company would be a great option due to its dominant position in the ANZ market and its growing China-based business. Combined, I believe SEEK is well-placed to achieve its aspirational revenue target of $5 billion later this decade. This will be a material increase on the revenue of $1,577.4 million it reported in FY 2020.

More reading

• Is another stock market crash coming?
• Is the Altium (ASX:ALU) share price a strong buy?
• 5 things to watch on the ASX 200 on Monday
• How to tell if this is the end of the ASX bull market
• Forget day trading and get rich with these top ASX shares

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended SEEK 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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The Avita Therapeutics Inc (ASX: AVH) share price has started the week in a positive fashion.

The regenerative medicine company’s shares are up over 3% to $7.43 in afternoon trade.

Why is the Avita share price charging higher?

The catalyst for today’s gain has been the release of an update on its pivotal study assessing the use of the RECELL System to treat stable vitiligo.

The RECELL System is currently used to prepare Spray-On Skin Cells using a small amount of a patient’s own skin. This provides a new way to treat severe burns, while significantly reducing the amount of donor skin required.

Avita is aiming to extend its use to treat other unmet medical needs and took a step forward to doing so today. This morning the company announced the initiation of the pivotal vitiligo study following the enrolment of the first patient at the Miami Dermatology and Laser Institute in Florida, United States.

This study will evaluate the safety and effectiveness of the RECELL System to repigment skin in patients who have vitiligo that has been stable for at least one year.

Vitiligo is an autoimmune disease that attacks the epidermis layer of skin. This results in loss of colour or pigmentation. This serious skin condition affects up to 2% of the global population, including an estimated 6.5 million Americans.

There is currently no cure for vitiligo, nor a universally accepted method for limiting the spread of the disease. And while many treatments are being used for its management, they are often temporary with a high rate of recurrence.

A milestone.

The company’s CEO, Dr Mike Perry, believes the initiation of the vitiligo clinical study is a milestone in advancing its pipeline to leverage the utility and full potential of the innovative RECELL technology platform to address unmet medical needs in dermatological applications.

Dr Perry commented: “Globally, there have been several published case series and pilot randomized clinical trials reporting positive results with the use of RECELL for treating patients with stable vitiligo and repigmenting depigmented skin lesions. We are pleased to initiate this pivotal study as a next step toward offering a treatment option for the millions of Americans who live with vitiligo.”

The Medical Director of Miami Dermatology and Laser Institute, Jill Waibel, MD, spoke positively about the RECELL System’s potential.

Waibel said: “While often considered a cosmetic issue, vitiligo can greatly impact the quality of life of those living with the disease, and treatment options are limited. We look forward to assessing the safety and efficacy of the RECELL System in restoring skin colour in stable vitiligo lesions and potentially offering those who live with vitiligo hope with a new, easy in-office treatment.”

More reading

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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. The Motley Fool Australia has recommended Avita Medical 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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The Dimerix Ltd (ASX: DXB) share price has plummeted 63.51% today to 27 cents. This came after the drug company reported the results of its phase 2 study of DMX-200 in patients with diabetic kidney disease.

Why has the Dimerex share price dropped?

Dimerix reported the results of its phase 2 study of DMX-200 versus placebo in patients displaying albuminuria, a sign of kidney disease. Albuminuria occurs when the kidneys fail to stop a blood protein, albumin, from entering the urine.

According to the company, the results of the phase 2 study were consistent with prior studies. Fifty-six percent of patients with a higher starting albuminuria level that received DMX-200 rather than a placebo achieved a clinically significant drop in albuminuria. This is considered as a 25% drop in albuminuria above that achieved by standard best therapy. However, across the full patient cohort, there was no significant difference between treatment with DMX-200 and treatment with a placebo.

The company said DMX-200 was found to be generally safe and well-tolerated in diabetic kidney disease patients.

Dimerix Medical Advisory Board chair Dr Hiddo Heerspink said:

While the study did not show a statistically significant difference in its primary endpoint, the effects in people with baseline albuminuria of over 500mg/g provides informative insight that certainly warrants further analysis.

About the company

Dimerix is a drug company that develops treatments for unmet medical needs. It has been listed on the ASX since 2014.

On 3 September 2020, Dimerix announced it had been awarded $1 million from the medical research futures fund to support a respiratory study in COVID-19 patients. The company said experts believed that its DMX-200 drug candidate may have applications in treating lung inflammation in patients suffering from COVID-19.

In the year to 30 June 2020, Dimerix saw a loss of  $4.49 million or 2.62 cents per share. The company had cash reserves of $7.8 million at 30 June 2020.

The Dimerix share price is up 225.84% since its 52-week low of 8.9 cents, and up 123% since the beginning of the year. The Dimerix share price is up 222.22% since this time last year.

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Motley Fool contributor Chris Chitty 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.

The post Why the Dimerix (ASX:DXB) share price has plunged 63% today appeared first on Motley Fool Australia.

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