Health Check: Despite a sickly Dr AI diagnosis, Healius flags higher earnings

• Pathology chain Healius flags a 31% earnings boost for the year, despite patients preferring robo docs over real docs 
• Recce signs up local diabetic foot ulcer partner
• Orthocell’s US Remplir rollout gains traction

Pathology chain Healius (ASX:HLS) has affirmed its current-year earnings expectations, despite the unhelpful tendency of folk to consult Dr AI rather than their real-life GP.

“Many Australians now rely on AI-generated summaries without consistently checking sources or clinical context,” Healius CEO Paul Anderson told the company’s AGM today.

“This [increases] the potential for misunderstanding, misdiagnosis or delayed care.”

During the year Healius commissioned and released research on online and AI-generated health information.

“Despite the rise of AI, the research found that 98% of Australians trust pathology results, healthcare professionals and pharmacists for health advice and information.”

Still, we’ll do a quick online consult to determine whether our headache results from glioblastoma or the body simply needing a coffee.

Howling headwinds

Dodgy online diagnoses aren’t the only headwind afflicting Healius and its peers.

“The Australian healthcare environment remains challenging,” Anderson said.

“The sector continues to face significant pressure from lack of meaningful indexation, rising labour costs, changes to Medicare criteria for vitamin B12 and urine testing and lower face-to-face GP attendances.

“The Fair Work Commission determination on gender-based undervaluation is already having a significant impact on labour costs for the entire sector and will put further pressure on pathology services across Australia.”

Anderson adds the company’s get-fit program has borne fruit. Measures include digital processing of collections and a pending patient app to track their visits from referral to result.

Oh, and the company has embraced the enemy.

AI “coworkers” handle high-volume transactions and workforce planning with “strong results and rapid payback”.

And they didn’t go all Bolshie and demand a pay rise.

Healius reported a 1.6% increase in September (first) quarter pathology revenues. This defied a 4.9% volume decrease after the loss of two major hospital contracts.

Adjusted for this, like-for-like “episode volumes” increased by 1.1%.

“We have seen strong revenue growth in our hospitals and higher value segments of genomics, ‘vetnostics’ and commercial contracts which have led to a 6% increase in our average fee.”

As outlined at the company’s August full-year results, Healius expects underlying earnings of just under $40 million for the year to June 2027, around 31% higher.

Finally, CSL gets its (wo)man

Healthcare watchers have endorsed the appointment of 30-year GSK veteran exec Deborah Waterhouse as CSL’s (ASX:CSL) new CEO.

At least, no one is saying anything nasty.

Not only will Waterhouse become the plasma giant’s first female CEO, but she will also be only the fourth chieftain since the company listed in 1994.

She will also be CSL’s first UK-based CEO, the previous two having been US-domiciled (or mainly so).

While CSL derives the bulk of its revenue from the US, its Seqirus business is based in the Old Dart.

Anyways, increasingly it doesn’t matter where one is based.

The CSL board settled on Waterhouse after a six-month-plus executive search.

At the UK-based GSK, Waterhouse held roles in the US, the UK, Europe and – yes – Australia.

(She was Melbourne-based general manager for Australia and NZ between 2008 and 2012).

Most notably, she led GSK’s HIV joint venture ViiV for nearly a decade.

ViiV had sales of £7.7 billion ($11bn) in calendar 2025.

She has also led GSK’s US vaccines business. This should confer valuable experience in grappling – er, dealing – with the White House.

“Thorough and consistent”

“We view her time at ViiV as tenure that demonstrates success running a global business in a tightly competitive HIV market,” broker Citi says.

The firm opines that Waterhouse has been “thorough and consistent, and demonstrated sound commercial acumen as ViiV readies itself for the expiry of key patents … and transitions its portfolio towards long-acting drugs.”

Waterhouse is thought to have narrowly missed out on the GSK top job.

Waterhouse replaces Paul McKenzie, who exited in February amid a horror stretch for the company.

Local Gordon Naylor has been interim CEO since then.

Rich rewards on offer

Waterhouse will pocket a heady base salary of £1.5 million, or 2.14 million Pacific Pesos.

The real eye-opening aspect is a short-term incentive target of 120-240% of the base salary and a long-term incentive of 250-500%.

Under Naylor’s reign, CSL has shown strong but nascent signs of a turnaround.

If Waterhouse can perpetuate this improvement after she clocks on next February, she stands to make a stonking amount of dough.

The company announced Waterhouse’s appointment after market yesterday.

Today, CSL said it had been named as defendant in an investor class action, filed in the Victorian Supreme Court late on Wednesday.

The action was brought by parties who acquired CSL securities between February 11 2025 and May 11 2026.

The lawsuit alleges CSL breached continuous disclosure rules in terms of its (deteriorating) performance.

The company disagrees.

“CSL considers that it has at all times complied with its disclosure obligations, denies any liability and will vigorously defend the proceeding”.

Orthocell is at Remplir “inflexion point”

Orthocell (ASX:OCC) CEO Paul Anderson* says the wound care company has reached an “inflexion point” in the US rollout of its flagship nerve-sparing device, Remplir.

The company today reported September quarter revenue of $3.6 million, 19% higher year-on-year but 7% lower than the June quarter tally.

These numbers include sales of the older dental reconstruction tool Striate.

Remplir revenue now accounts for more than 40% of total quarterly turnover, with “growth expected in the coming quarters”.

Orthocell’s fortunes hinge on the US performance of Remplir, which the US Food & Drug Administration cleared 18 months ago.

The company gleaned $400,000 from US Remplir sales in the quarter, 21% higher than the June quarter.

In the September quarter of 2025, the company racked up $60,000 of Remplir sales, so that gives some idea of the trajectory to date.

The company reports that 79 hospitals and 93 surgeons have purchased or used Remplir. That’s up 13% and 22% during the quarter, respectively.

Orthocell values the US peripheral nerve repair market at US$2 billion a year, across 700,000 procedures annually.

The company targets 10% of these procedures.

Orthocell reported September quarter net cash outflows of $4.47 million, with “cash consumption in line with external expectations”.

The company expects to become break-even at 10,000 devices and 6000 procedures.

In Australia, meanwhile, Orthocell has been heartened by the number of surgeons using Remplir in prostate surgery to protect sensitive nerves around the organ.

The company says Remplir has now been used in more than 300 Australian prostatectomy procedures. Several surgeons have performed more than 20 procedures each.

Results to date suggest Remplir’s use has avoided common incontinence and erectile dysfunction problems.

*Not the aforementioned CEO of Healius.

Recce seals local diabetic foot ulcer deal

Recce Pharmaceuticals (ASX:RCE) has won early endorsement of its proposed synthetic anti-infective to treat diabetic foot infections (DFIs).

The company has signed an exclusive licensing and commercialisation agreement with the private Arrotex Pharmaceuticals, covering Australia and New Zealand.

Recce’s candidate, the topical gel Recce-327 has not yet been approved for sale and is currently subject to phase III trials locally and in Indonesia.

“This agreement brings together Recce’s anti-infective development platform and Arrotex’s established regulatory, market access and commercial capabilities in Australia and New Zealand,” Recce CEO James Graham said.

“Arrotex is a leading regional partner with the infrastructure and healthcare relationships needed to prepare [the drug] for the market”.

Naturally, this is subject to “successful clinical development and regulatory approval”.

Under the deal, Recce stands to pocket a “significant” share of gross margin on any sales.

Recce remains exclusive manufacturer and supplier of the drug.

In Australia, about 50,000 people live with a diabetes-related foot ulcer, with about 300,000 at risk.

The condition is notoriously hard to treat and antibiotic resistance has become a major problem.

 At Stockhead we tell it as it is. While Orthocell and Recce are Stockhead advertisers, the companies did not sponsor this article.

The post Health Check: Despite a sickly Dr AI diagnosis, Healius flags higher earnings appeared first on Stockhead.