Covid-19 lifts holdings

The High Conviction Equities Fund rose 4.4% in the month of July with many healthcare holdings gaining.

Top Holdings (alphabetically)

Bavarian Nordic Denmark Health Care

Bio-Rad Laboratories Inc United States Health Care

Genetic Signatures Limited Australia Health Care

Photocure Norway Health Care

Telix Pharmaceuticals Ltd Australia Health Care

The High Conviction Equities Fund rose 4.4% in the month of July with many healthcare holdings gaining.

Australian molecular diagnostic producer Genetic Signatures rose on the back of strong quarterly results driven by Covid-19 test kits. We estimate the company has 20% market share of the domestic market. Going forward international sales should rise rapidly after the company received European approval in April with US approval expected this quarter. The company’s Covid test is part of a respiratory panel that can also test for influenza and cold viruses which give it an advantage over other tests, along with the ability to process large numbers of tests in a short time. We expect the Covid test market to last several years given vaccines seem unlikely to be 100% effective requiring governments to closely monitor populations for both influenza and Covid.

Danish vaccine producer Bavarian Nordic rose after announcing final details for its Covid-19 vaccine partnership, which is expected to go into human studies later this year. The company believes that its vaccine will only require one shot (not two), which may set it apart from competitors although it is looking somewhat late to market.

US Diagnostic equipment producer Bio-Rad, rose after reporting robust quarterly results buoyed by sales of equipment to run Covid-19 tests. The company also owns a 30% stake in German listed Sartorious, which is one of the leading producers of equipment used to produce vaccines and other biological drugs, along with fellow portfolio holding Merck KGA also of Germany.

US optical component company Lumentum rose after competitor IIVI Corp pre-announced strong quarterly results driven by demand for data centre optical components.

US listed gene editing company Sangamo rose after licencing its technology to pharmaceutical giant Novartis for neurological disorders including autism. This follows closely on the heels of a similar deal with Biogen earlier in the year for neurological conditions including Alzheimer’s disease. Sangamo has now signed several partnerships with major pharmaceutical companies highlighting the value of its technology platform.

On the negative side Swiss semiconductor producer AMS fell after reporting weaker than expected results.