• The S&P/ASX 200 Health Care Index fell 7.66% in February with the S&P/ASX 200 down 3.79%
• Morgans healthcare analyst Iain Wilkie said several factors caused investor jitters in February including job cuts to US FDA 
• Pacific Edge was up 121% in February as its bladder cancer assay won support from the American Urological Association

The S&P/ASX 200 Health Care (ASX:XHJ) Index fell 7.66% in February to be the second-worst performing sector for the month as the local bourse felt the pressure of global geopolitical and economic uncertainty.

The S&P/ASX 200 rose by 5% to reach a new record high in January, with the XHJ up 3.20% for the first month of 2025. However, momentum was short lived with the benchmark falling by 3.79% in February and the ASX healthcare index also tumbling.

February was also reporting season with many smaller names reporting quarterly and half-yearly results and larger companies reporting half-yearly results.

Morgans healthcare analyst Iain Wilkie told Stockhead the large-cap healthcare stocks “got pretty beaten up” in February, while his colleague Scott Power described the recent reporting season as “one of the worst for a long time”.

“The wound care players also got a bit beaten up in reporting season with PolyNovo (ASX:PNV) falling around 32%,” he added.

“They recorded good results but they’ve got some capex rolling through so there’s concerns about potential additional cash requirements.”

The healthcare sector globally is also facing pressure with concerns job cuts to the Food and Drug Administration under President Donald Trump’s newly established Department of Government Efficiency (DOGE), headed by billionaire Tesla CEO Elon Musk, could add lengthy delays to approvals.

Alos read > Health Check: You’re rehired! The Trump administration’s FDA staffing ‘fiasco’ puts sector in choppy, unchartered waters  

Wilkie said concerns about inflation in the US, proposed tariffs on the US’s main trading partners Canada, Mexico and China, plus conflict in Ukraine and the Middle East was adding to investor jitters.

“There’s a little bit of that risk-off scenario and whether or not companies actually get impacted or not –  probably not, but investors aren’t willing to be brave at this point,” he said.

“Looking into March, I can’t really see a lot changing.”

Upcoming catalysts may boost sentiment

However, Wilkie did note there were several ASX stocks with upcoming catalysts in the next few months which could build some momentum.

He said EBR Systems (ASX:EBR) was expecting its WiSE CRT (cardiac resynchronisation therapy) system to gain approval on or before April 13, 2025, with commercial launch in H2 CY25.

Its WiSE CRT (cardiac resynchronisation therapy) system uses proprietary wireless technology to deliver pacing stimulation directly inside the left ventricle of the heart.

Retinal-diseases-focused biotech Opthea (ASX:OPT) is awaiting two phase III trial results in CY25 with topline data from its Coast phase III trial investigating OPT-302, in combination with aflibercept for the treatment of wet-AMD, due early in Q2 CY25.

How ASX biotechs performed in February

Pacific Edge (ASX:PEB) was the top-performing stock in the ASX healthcare sector in February, up 121% after announcing the American Urological Association (AUA) had included the company’s Cxbladder Triage as the standard of care in an amendment to its clinical guideline for the management of patients presenting with microhematuria (blood in the urine) and at risk of bladder cancer.

Pacific Edge said in a major amendment to the 2020 AUA microhematuria guideline, Cxbladder Triage was mentioned as the only urine-based biomarker test that has ‘Grade A’ evidence from a randomised controlled trial (the STRATA Study) in support of this recommendation.

As a consequence of the new guideline, Pacific Edge anticipates an uplift in demand for its bladder cancer assay.

Mayne Pharma (ASX:MYX) was up 58% in February after inking a deal to be sold to US pharmaceutical company Cosette for an equity value of $672m.

The Adelaide-based drugmaker agreed to a scheme of arrangement at $7.40 per share, a 37% premium on its Thursday closing prices.

Cosette has a portfolio of products in women’s health and dermatology, with corporate and manufacturing facilities in New Jersey and North Carolina in the US.

“We are pleased that Cosette has recognised significant value in Mayne Pharma, particularly in our women’s health and dermatology businesses, and the offer provides shareholders with the opportunity to receive cash value at a significant premium,” chairman Frank Condella, said in an ASX announcement.

The scheme is fully funded and subject to regulatory approvals, including that of Mayne Pharma shareholders and an independent expert’s report.

Infection prevention company Nanosonics (ASX:NAN) rose 36% in February after releasing what Wilkie described as a “decent” H1 FY25 results.

Nanosonics reported half-year total revenue of $93.6 million, an increase of 18% on prior corresponding period (pcp) and half year capital revenue of $24.4m, up 11% on pcp with consumables/service revenue up 20% to $69.2m.

The company specialises in automated decontamination of reusable medical instruments such as ultrasound and endoscopes, with its  Trophon technology for ultrasound decontamination becoming standard of care in several countries, including the US, Australia and UK.

Nanosonics added 1,050 new Trophon units in H2 FY25 with Wilkie said suggested hospital budget pressures were stabilising.

Meanwhile, the company’s Coris endoscope cleaning technology remains on track for a Q1 FY26 launch, pending FDA de novo review.

“The outlook for Nanosonics is looking clearer,” Wilkie said.

At Stockhead, we tell it like it is. While EBR Systems is a  Stockhead advertiser, the company did not sponsor this article.

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