Hearing implant business COH was the best-performing healthcare name on Wednesday, closing up +1.6%. However, we remain concerned that the share price isn’t factoring in the risks of Moderna’s potential phase III data for a vaccine against human cytomegalovirus, which causes infant deafness. Success for Modena could see COH fall 15-20% on sentiment alone. Also, Trump’s tariffs may impact COH as the company enjoyed ~50% of its revenue from the US in FY24, good with a weak $A but not when you manufacture in Australia, Malaysia and China.
- While early efficacy benchmarks have not been achieved, the Phase 3 trial of mRNA-1647 is progressing, with final data expected in 2025.
- Hence, we don’t like the risk/reward towards COH as it trades mildly below its average valuation in recent years despite the Moderna risks – it’s not cheap enough.
MM is neutral COH above $300
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