Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>Disputable Phase III result of Akeso's (9926 HK) flagship pipeline Ivonescimab (AK112) caused Akeso's share price to drop 28% in three days, reaching the bottom of a year-long trading range;</li>
<li>The fundamental difference of opinions is around Ivonescimab's global prospects against (1) Merck's Keytruda, (2) J&amp;J's Rybrevant, (3) Kelun's SKB264 and domestic prospect against (4) Innovent's IBI305;</li>
<li>Some answers are clear while others are now. What can provide answers are (1) SKB264's Phase III data, and to a lesser degree (2) AK112's head-to-head trial against Keytruda.</li>
</ul>


Disputable Phase III result of Akeso's (9926 HK) flagship pipeline Ivonescimab (AK112) caused Akeso's share price to drop 28% in three days, reaching the bottom of a year-long trading range;
The fundamental difference of opinions is around Ivonescimab's global prospects against (1) Merck's Keytruda, (2) J&amp;J's Rybrevant, (3) Kelun's SKB264 and domestic prospect against (4) Innovent's IBI305;
Some answers are clear while others are now. What can provide answers are (1) SKB264's Phase III data, and to a lesser degree (2) AK112's head-to-head trial against Keytruda.


Is Akeso's Sell-Off a Long Waited Opportunity or a Long Overdue Correction?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>We saw the collapse of Akeso's share price after the Company released the clinical data of AK112 on ASCO. Judging from the market reaction, there are indeed“something unsatisfactory” about AK112.</li>
<li>Akeso’s high valuation mainly comes from the expectation that it would be a player that can compete on international stage. But investors' confidence in AK112’s future commercialization has been shaken.</li>
<li>We advise investors to remain patient and "let the bullets fly". It's not yet time for the final result.But, if you want to bet, you need to pay the price.</li>
</ul>


We saw the collapse of Akeso's share price after the Company released the clinical data of AK112 on ASCO. Judging from the market reaction, there are indeed“something unsatisfactory” about AK112.
Akeso’s high valuation mainly comes from the expectation that it would be a player that can compete on international stage. But investors' confidence in AK112’s future commercialization has been shaken.
We advise investors to remain patient and "let the bullets fly". It's not yet time for the final result.But, if you want to bet, you need to pay the price.


Akeso Biopharma (9926.HK) - It's Not Game over Yet

Event-Driven

<ul>
<li>There are many rumors about Henlius’s trading halt, but Fosun Pharma had applied for the resumption of trading in H Shares, which makes us confused whether this is really privatization.</li>
<li>Henlius is in “an awkward position” in capital market. Fosun is to blame for Henlius's low valuation. The high debt problem makes the profits generated from drug sales meaningless.</li>
<li>If Henlius cannot break away from the system controlled by Fosun, the complexity of corporate governance brought about by the relationship between Henlius and Fosun would inevitably affect investment judgment.</li>
</ul>


There are many rumors about Henlius’s trading halt, but Fosun Pharma had applied for the resumption of trading in H Shares, which makes us confused whether this is really privatization.
Henlius is in “an awkward position” in capital market. Fosun is to blame for Henlius's low valuation. The high debt problem makes the profits generated from drug sales meaningless.
If Henlius cannot break away from the system controlled by Fosun, the complexity of corporate governance brought about by the relationship between Henlius and Fosun would inevitably affect investment judgment.


Shanghai Henlius Biotech (2696.HK) - Behind the Trading Halt and Privatization Rumor

Equity Capital Markets

Akeso Biopharma Inc / Equity Capital Markets

<ul>
<li>Akeso’s product sales grew rapidly in 2023, mainly driven by off-label use of AK104. Since AK104's commercialization potential on other indications was "overdrawn" in advance, sales growth would slow afterwards. </li>
<li>The key investment logic of Akeso is whether/how much its BsAb pipelines would grab shares from PD-1. The high valuation has somewhat priced in AK112’s successful head-to-head trial with pembrolizumab.</li>
<li>If AK112 does beat Keytruda, valuation will reach a new level. If AK112 fails in critical clinical trials, it would cast a shadow on the entire BsAb pipeline of Akeso.</li>
</ul>


Akeso’s product sales grew rapidly in 2023, mainly driven by off-label use of AK104. Since AK104's commercialization potential on other indications was "overdrawn" in advance, sales growth would slow afterwards. 
The key investment logic of Akeso is whether/how much its BsAb pipelines would grab shares from PD-1. The high valuation has somewhat priced in AK112’s successful head-to-head trial with pembrolizumab.
If AK112 does beat Keytruda, valuation will reach a new level. If AK112 fails in critical clinical trials, it would cast a shadow on the entire BsAb pipeline of Akeso.


Akeso Biopharma Placement (9926.HK) - Would Investors Be Willing to Take a Gamble?

Yichang HEC Changjiang Pharma / Event-Driven

<ul>
<li>Sunshine Lake Pharma plans to privatize HEC CJ Pharma in the form of merger by absorption with conditions. After privatization, CJ Pharma will be delisted from the Stock Exchange.</li>
<li>Sunshine Lake Pharma's pipeline has been “disconnected” from the level of domestic biotech in recent years, and is completely lagging behind the average speed of innovative drug development in China.</li>
<li>Due to “outdated” pipeline and lack of prospects, even if CJ Pharma is merged into Sunshine Lake Pharma, valuation performance of the new entity would be disappointing in the future.</li>
</ul>


Sunshine Lake Pharma plans to privatize HEC CJ Pharma in the form of merger by absorption with conditions. After privatization, CJ Pharma will be delisted from the Stock Exchange.
Sunshine Lake Pharma's pipeline has been “disconnected” from the level of domestic biotech in recent years, and is completely lagging behind the average speed of innovative drug development in China.
Due to “outdated” pipeline and lack of prospects, even if CJ Pharma is merged into Sunshine Lake Pharma, valuation performance of the new entity would be disappointing in the future.


HEC CJ Pharma (1558.HK)'s Merger Deal with Sunshine Lake Pharma - Almost No Investment Value

China

Akeso Inc. operates operatesa s a biotech company. The compnay develops treatments and therapies for various types of diseases. Akeso serves cutomers worldwide

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Akeso Biopharma Inc (9926 HK)

Is Akeso's Sell-Off a Long Waited Opportunity or a Long Overdue Correction?

Akeso's share price drops 28% due to disputable Phase III results of Ivonescimab, but what is expected and how does it fall short? What are the...

Blue Lotus Research Institute

Akeso Biopharma (9926.HK) - It's Not Game over Yet

Akeso's share price plunged after unsatisfactory clinical data release for AK112 at ASCO, raising doubts about international...

Xinyao (Criss) Wang

Shanghai Henlius Biotech (2696.HK) - Behind the Trading Halt and Privatization Rumor

Rumors swirl around Henlius's trading halt, raising questions about privatization.Henlius faces challenge in the market due to high debt, with...

Xinyao (Criss) Wang

Akeso Biopharma Placement (9926.HK) - Would Investors Be Willing to Take a Gamble?

Stock price plunged today because the clinical data of AK112 (EGFRm NSCLC progressed after EGFR-TKI treatment) missed expectations. As we analyzed...

Xinyao (Criss) Wang

HEC CJ Pharma (1558.HK)'s Merger Deal with Sunshine Lake Pharma - Almost No Investment Value

Sunshine Lake Pharma plans to privatize and merge with CJ Pharma.However, with an outdated pipeline, the new entity's valuation performance will...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Is Akeso's Sell-Off a Long Waited Opportunity or a Long Overdue Correction?

​Akeso's share price drops 28% due to disputable Phase III results of Ivonescimab, but what is expected and how does it fall short? What are the...

Blue Lotus Research Institute

Akeso Biopharma (9926.HK) - It's Not Game over Yet

​Akeso's share price plunged after unsatisfactory clinical data release for AK112 at ASCO, raising doubts about international...

Xinyao (Criss) Wang

Shanghai Henlius Biotech (2696.HK) - Behind the Trading Halt and Privatization Rumor

​Rumors swirl around Henlius's trading halt, raising questions about privatization.Henlius faces challenge in the market due to high debt, with...

Xinyao (Criss) Wang

Akeso Biopharma Placement (9926.HK) - Would Investors Be Willing to Take a Gamble?

Stock price plunged today because the clinical data of AK112 (EGFRm NSCLC progressed after EGFR-TKI treatment) missed expectations. As we analyzed...

Xinyao (Criss) Wang

HEC CJ Pharma (1558.HK)'s Merger Deal with Sunshine Lake Pharma - Almost No Investment Value

​Sunshine Lake Pharma plans to privatize and merge with CJ Pharma.However, with an outdated pipeline, the new entity's valuation performance will...

Xinyao (Criss) Wang

Akeso's share price drops 28% due to disputable Phase III results of Ivonescimab, but what is expected and how does it fall short? What are the...

Akeso's share price plunged after unsatisfactory clinical data release for AK112 at ASCO, raising doubts about international...

Rumors swirl around Henlius's trading halt, raising questions about privatization.Henlius faces challenge in the market due to high debt, with...

Sunshine Lake Pharma plans to privatize and merge with CJ Pharma.However, with an outdated pipeline, the new entity's valuation performance will...