Over the past year, ASX healthcare shares have demonstrated strong performance. The broad market index, represented by the S&P/ASX 200 Index (ASX: XJO), has increased by 10.5%, while the S&P/ASX 200 Health Care Index (ASX: XHJ), a gauge for large-cap healthcare stocks, has risen by 15%.
As the market focuses on the US interest rate decision, two notable ASX healthcare companies have released positive updates that warrant attention.
AVITA Medical Inc (ASX: AVH) AVITA Medical has announced a significant development with an exclusive agreement to collaborate with Regenity Biosciences. This partnership grants AVITA rights to a unique collagen-based dermal matrix, following 510(k) clearance from the US Food and Drug Administration (FDA).
The 510(k) clearance allows medical device manufacturers to market their products in the United States. According to AVITA's CEO, Jim Corbett, this collaboration enhances the company’s growth prospects. Integrating Regenity's collagen-based solutions with AVITA's RECELL technology aims to establish a new standard of care with a one-stage closure, improving patient outcomes. The new product will be marketed under the AVITA Medical brand in the US, EU, Australia, and Japan. Clinical studies are planned for 2025 to explore synergies between the new dermal matrix and RECELL.
Sonic Healthcare Ltd (ASX: SHL) Sonic Healthcare has announced plans to raise 400 million Euros in long-term debt through the US private placement market. The funds will be acquired through a series of notes with maturities of 7, 10, and 15 years, featuring an average fixed coupon of approximately 4.1%. The proceeds will be used to repay existing bank loans and refinance 185 million Euros of debt maturing in November this year.
Sonic’s CFO, Chris Wilks, expressed satisfaction with the outcome of the debt raise, highlighting strong support from both existing and new investors. Despite the broader market’s gains in 2024, Sonic Healthcare has faced challenges, with its share price down 14% this year. This decline follows a period of elevated revenue due to increased demand for COVID-19 testing, which has since diminished.
ASX healthcare shares have shown resilience in 2024, though growth has been uneven. AVITA Medical has expanded its portfolio with a promising new product, while Sonic Healthcare has secured long-term funding amid a challenging year. Investors should consider these updates within a broader context and continue to conduct thorough due diligence.