FPH - Fisher Paykel Healthcare.

[Relaxed]

Weight loss drug is showing signs of reduced OSA.
If this plays out then it could affect FPH core business

https://www.cnbc.com/2024/04/17/eli-...-in-trial.html

[alokdhir]

Weight loss drug is showing signs of reduced OSA.
If this plays out then it could affect FPH core business

https://www.cnbc.com/2024/04/17/eli-...-in-trial.html

FPH core business is not OSA masks but Hospital humidification . Though it may affect investor sentiment till actuals come out showing nothing changed with these drugs ...though its well known that first advise a OSA patient gets is to reduce weight !!

[Relaxed]

FPH core business is not OSA masks but Hospital humidification . Though it may affect investor sentiment till actuals come out showing nothing changed with these drugs ...though its well known that first advise a OSA patient gets is to reduce weight !!

FPH is a great innovator and it will be interesting to see how it plays out

[thedrunkfish]

What caused the big jump after close yesterday?

[Greekwatchdog]

For Bars report yesterday

We upgrade our rating on F&P Healthcare (FPH) to NEUTRAL from UNDERPERFORM. Our analysis suggests a large long-term opportunity in the anaesthesia market. This reflects: (1) strong industry feedback, (2) large market size, and (3) current use case/body of clinical research, underpinning a solid market penetration ability (which we expect to grow through time). Anaesthesia products represent only ~4% of our FY24 revenue forecast but are at a critical point for investors to take notice, with potential for the anaesthesia opportunity to be a key driver for the investment case over the next decade. While relative valuation to peers is ahead of history, it looks fair accounting for FPH's superior near-term earnings growth. We take comfort in the longer-term anaesthesia opportunity which underpins robust valuation support.

What's changed?
Earnings: Negligible near-term changes, more material longer-term upgrades given higher anaesthesia revenue.
Target price: Increased to NZ$25.90 (from NZ$23.45) given peers change and higher medium/long-term earnings expectations.
Rating: Upgraded to NEUTRAL (from UNDERPERFORM).
Large total addressable market (TAM) but current evidence suggests relatively low penetration
Our analysis suggests up to ~270m global procedures using general anaesthesia/procedural sedation (up to ~120m in developed markets). Based off current clinical evidence, using Australia as a guide, and clinician feedback, the primary use case today is for high-risk patients, but we expect the patient pool to grow over time as more population specific evidence is published. Today FPH's penetration is ~0.5% (~1.0% developed markets), our FY38 forecasts assume penetration of ~3-4% (developed markets of ~5-7%).


Industry feedback is constructive
Feedback from 12 users of the anaesthesia products is very consistent: (1) physicians ‘generally speaking’ love the product; (2) usage is primarily on high-risk patients/difficult airways (use is ~5% of total patients today, albeit there is a range); (3) there is no real perceived benefit in other standard procedures; thus, only clinicians need it for a small portion of patients at this stage (particularly given the current clinical evidence); and (4) there is little/no competition.


Anaesthesia underpins solid DCF valuation support
We now assume FY38 anaesthesia patient volumes of ~8.5m (from ~5m), which drives ~+5-7% EPS upgrades. This underpins robust ‘cash flow’ valuation support, helps allay our concerns on the new apps consumables growth factored into the share price, and provides greater confidence in consensus' consumables revenue growth long-term. We expect the share price to remain constrained given absolute valuation and relative valuation to peers is slightly elevated, and thus refrain from a more positive recommendation.