The big themes impacting ASX-listed healthcare companies

MedTech News: The COVID-19 pandemic has significantly impacted many ASX-listed healthcare companies, such as ResMed, Fisher and Paykel Healthcare, Sonic Healthcare and CSL.

Sonic Healthcare and Australian Clinical Labs have benefitted as COVID-19 testing has surged during the last couple of years.

That said, the past three years hasn’t been an unexpected gain for all. Supply chain challenges have impacted companies like ResMed, while lockdowns have prevented CSL from executing its flagship product.

In 2023, the Australian healthcare sector is facing two headwinds. The short-term headwind is the Chinese reopening. The long-term headwind is the impact inflation has on production, according to Citi’s Australian health analysts.

The top three ASX healthcare companies – CSL, ResMed and Fisher and Paykel Healthcare – have pricing power and resilient demand which should offset the negative impact of inflation and/or a potential recession, at least to some degree, according to the analysts.

CSL is focused on plasma collection, recovery in Vifor sales post-COVID, the Argenx CIDP P3 clinical trial data in Q2 2023, and the transition to the Terumo plasma collection devices.

In the case of ResMed, the company continues to benefit from the Philips CPAP medical device recall for sleep aponea. ResMed believes that it will have the capacity to supply the entire market once the availability of semiconductors improves, potentially reducing the likelihood of a quick return to market by Philips.

On the other hand, Ramsay Health Care and Integral Diagnostics continue to face the uncertainty around COVID-19, workforce challenges and the pace of recovery of their businesses. Cochlear could also be hit if the pace and severity of China’s COVID-19 reopening changes dramatically.

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