Health Check: Do we hear more bad news about Cochlear? | Stockhead
Broker UBS says investors shouldn't be deaf to Cochlear's competitive threats in the fully-implantable sector. Pic: Getty ImagesCochlear rival Envoy Medical could take the lead in the emerging totally. . .
Broker UBS says investors shouldn't be deaf to Cochlear's competitive threats in the fully-implantable sector. Pic: Getty ImagesCochlear rival Envoy Medical could take the lead in the emerging totally implantable marketArgenica posts knockout preclinical concussion study resultsBell Potter initiates coverage of Lumos Diagnostics with a bullish price targetIt’s complicated, but UBS believes hearing device giantCochlear (ASX:COH)may face stiffer competition as it moves into the Totally Implantable Cochlear Implant (TICI) sector. Instead of having microphones sitting on the ear, TICIs have subcutaneous (under the skin) microphones. These pick up speech and environmental sounds and send them through the skin to the internal device. These implants translate them into electrical signals to stimulate the auditory nerve. The Minnesota-based, Nasdaq-listed Envoy Medical’s trial of its own TICI device suggests comparable hearing improvements to Cochlear’s, as reported in the latter’s feasibility study. “If confirmed in the full data set, we believe Envoy’s device will be viewed as competitive with other totally implantable offerings, providing a first-mover advantage and potential pricing leadership,” UBS says in a note. The firm cites “several important caveats” including a small sample size, varying baselines and different trial geographies (the US for Envoy, Australia for Cochlear). No Con-TICI holidayKnown as Elevate, Cochlear’s trial tests TICI in adults with severe to profound hearing loss. In the meantime, the Innsbruck-headquartered MED-El has completed a pivotal trial of its TICI device. MED-El should seek European – but not US – marketing clearance. In April Cochlear shares tanked after the company revised net profit expectations for the year to June 2026, to $290-330 million. This compares to the previously guided $435-460 million (later honed to the lower end of this range). The company cited a mélange of adversities, including weak US consumer conditions and Middle East-driven “uncertainties”. The TICI tussle shouldn’t have immediate earnings implications, but could affect Cochlear’s longer-term growth. At February half-year results, CEO Dig Howitt said the company was “very confident” of its TICI performance. He also acknowledged the presence of competitors and said development timelines were “unpredictable” and commercialisation was “still at least a few years away. ”UBS is neutral on Cochlear stock with a $106 valuation, adrift of last night’s closing price of $123. Cochlear lifts its full-year kimono on August 18. In this broker’s eyes, Lumos shinesBroker Bell Potter has kick-started coverage of point-of-care diagnostics houseLumos Diagnostics (ASX:LDX)with a buy recommendation and 25 cents a share price target. This implies upside of a meaty 180%. Lumos has commercialised Febridx, a lateral flow test to distinguish bacterial from non-bacterial illnesses after ten minutes, via a single fingerstick blood sample. In March the US Food and Drug Administration (FDA) granted a so-called CLIA waiver. This means the test can be delivered by non-GP medical staff, rather than the docs themselves. Lumos tackles an enduring problem: clinicians prescribe antibiotics in 85-95% of outpatient acute respiratory infections (ARI) cases. But the miracle mould is only needed 28% of the time because the diseases are largely viral. “While most common ARIs are viral, the symptomatic overlap in clinical presentation can make it difficult to discern from bacterial infections, leading to over prescribing,” Bell Potter says. “This is reflected in an alarming 752 prescriptions per 1000 people in outpatient settings. ”The firm says early evidence suggests that Febridx can change prescribing behaviour by up to 50%. CLIA-ly positiveIn the US, CLIA waiver expands the addressable market more than eightfold, to 277,000 clinical sites covering 80 million annual patient visits. Put another way, that makes for a circa US$1 billion a year addressable market. Lumos last year struck a US distribution agreement with PHASE Scientific, which entails minimum orders of US$308 million over six years. Bell Potter expects annual revenue to reach around US$130 million by 2031-32 – the end of the PHASE contract – with a 70-80% gross margin. The firm plugs in current year sales of US$19. 5 million and an underlying loss of $6. 4m. Turnover in 2027-28 rises to US$26. 5 million, with a US$4m deficit. “Lumos is now largely de-risked, and the share price should respond to positive news on the commercial rollout over the short-to-medium term. ”TrivarX furthers radiation-free imaging studyThe developer of diagnostic tools across mental health and neuro-oncology,TrivarX (ASX:TRI)plans to launch a phase I feasibility study for its radiation-free Stabl-Im imaging platform. This comes after the company secured product supply. Based on magnetic resonance imaging (MRI), Stabl-Im provides information on tumour activity, cell proliferation and treatment response without the use of radioactive tracers. Instead, the company avails of stable isotopes. “Clinical development activities continue to advance, including protocol finalisation, preparation of supporting documentation and vendor and clinical site engagement,” TrivarX said. “Stabl-Im has the potential to complement existing standard-of-care imaging and support improved assessment of tumour biology and response to treatment. ”The company plans to kick off the phase I effort this calendar year. Otherwise, TrivarX is road testing AI-driven algos to detect mental health conditions using “physiological signals”. In April, Dr Danielle Meyrick joined as TrivarX CEO. Meyrick held prominent roles, including global head of clinical science atTelix Pharmaceuticals (ASX:TLX). Argenica eyes further TBI trial, details TBANeurological diseases houseArgenica Therapeutics (ASX:AGN)reports that its lead agent ARG-007 (xaranetide) looks effective for repeated traumatic brain injuries (TBIs) such as concussions. The claim stems from early animal (rodent) work, in collab with Curtin University and the Perron Institute for Neurological and Translational Science. Argenica’s lead drug candidate, ARG-007 strives to prevent brain cell damage after an “ischaemic event”. “These findings suggest the therapy may not simply alleviate symptoms, but may modify the underlying biological response to concussion,” the company said. The results aligned with “previously reported efficacy in multiple moderate and severe TBI models, demonstrating biological activity across the spectrum of severity. ”CEO Dr Liz Dallimore said: “based on these results, Argenica is now considering next steps to advance xaranetide’s development in this indication. ”In a different knock-out blow, Argenica shares last September tumbled after the company’s ARG-007 stroke treatment trial missed primary efficacy endpoints. Argenica later said the drug might work on a subset of severe ischaemic stroke patients. The company angles for a more focused phase 2b trial. Meanwhile, Argenica plans to launch a phase Ia TBI study with outside funding. The company cites a “large and currently underserved” TBI population of contact-sport athletes, military personnel and domestic violence survivors. At Stockhead, we tell it as it is. While Lumos Diagnostics and TrivarX are Stockhead advertisers, the companies did not sponsor this article.