HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Ascentage Pharma Group Corp / Equity Capital Markets

<ul>
<li>Our forecast is sales of olverembatinib in 2025 could reach RMB500mn. APG-2575 is better than Sonrotoclax in ORR/safety profile, but global commercialization success is not simply determined by clinical data.</li>
<li>Placing price of HK$68.6/share has priced in the successful licensing deal of APG-2575 to some extent, which however is not a done deal. US$1.5-2.375bn is a more reasonable valuation range.</li>
<li>The big rally in biotech sector is not based on fundamental inflection point. The driving mentality behind the valuation bubble this time has a more obvious nature of “short-term gambling”.  </li>
</ul>


Our forecast is sales of olverembatinib in 2025 could reach RMB500mn. APG-2575 is better than Sonrotoclax in ORR/safety profile, but global commercialization success is not simply determined by clinical data.
Placing price of HK$68.6/share has priced in the successful licensing deal of APG-2575 to some extent, which however is not a done deal. US$1.5-2.375bn is a more reasonable valuation range.
The big rally in biotech sector is not based on fundamental inflection point. The driving mentality behind the valuation bubble this time has a more obvious nature of “short-term gambling”.  


Ascentage Pharma (6855.HK) Placement - Thoughts on The Placing Price and the Outlook

China Medical System / Equity Capital Markets

<ul>
<li>CMS announced proposed secondary listing on the SGX-ST. The Company is undergoing pipeline adjustments and strategic transformation. Its growth logic is shifting from "dependence on generic drugs" to "innovation-driven drugs".</li>
<li>However, the valuation logic has changed. The capital market will give high valuations to companies that achieve overseas licensing-out deals, rather than the attractive DCF model based on traditional business.</li>
<li>After 2023/2024 performance downturn, revenue growth is expected to return to positive in 2025. But in essence, CMS’s current business model is license-in, which will affect the future valuation performance. </li>
</ul>


CMS announced proposed secondary listing on the SGX-ST. The Company is undergoing pipeline adjustments and strategic transformation. Its growth logic is shifting from "dependence on generic drugs" to "innovation-driven drugs".
However, the valuation logic has changed. The capital market will give high valuations to companies that achieve overseas licensing-out deals, rather than the attractive DCF model based on traditional business.
After 2023/2024 performance downturn, revenue growth is expected to return to positive in 2025. But in essence, CMS’s current business model is license-in, which will affect the future valuation performance. 


Pre-IPO China Medical System (867 HK) - About the IPO in Singapore and Concerns on Valuation Outlook

Innovent Biologics Inc / Equity Capital Markets

<ul>
<li>The valuation bubble of innovative drug companies is about to burst as some founders/shareholders have started to reduce their holdings and cash out. We recommend investors to be rational.</li>
<li>Domestic innovative drugs market size would be about RMB600 billion by 2035. It is estimated the whole innovative drug industry's CAGR would be about 15% for the next decade.</li>
<li>Innovent announced Placement with the Placing price of HK$78.36/share. However, valuation is clearly at a high level. A more suitable option is to take profits rather than buy.</li>
</ul>


The valuation bubble of innovative drug companies is about to burst as some founders/shareholders have started to reduce their holdings and cash out. We recommend investors to be rational.
Domestic innovative drugs market size would be about RMB600 billion by 2035. It is estimated the whole innovative drug industry's CAGR would be about 15% for the next decade.
Innovent announced Placement with the Placing price of HK$78.36/share. However, valuation is clearly at a high level. A more suitable option is to take profits rather than buy.


China Healthcare Weekly (Jun.29) - Biotech Valuation Bubble Is About to Burst, Innovent's Placement

Xuanzhu Biopharmaceutical / Equity Capital Markets

<ul>
<li>The main purpose for Sihuan to acquire Combio is to form a strong innovative drug business Xuanzhu and then make large capital gains from the subsequent spin-off and listing.</li>
<li>All the three Core Products need to face fierce competition, and their clinical data do not show obvious advantages to competing products, making them hard to stand out.</li>
<li>Based on the announcement on Nov.12, 2024, valuation of Xuanzhu was RMB8.5 billion. However, due to the lack of competitive pipelines and weak commercialization prospects, we think Xuanzhu is overvalued.</li>
</ul>


The main purpose for Sihuan to acquire Combio is to form a strong innovative drug business Xuanzhu and then make large capital gains from the subsequent spin-off and listing.
All the three Core Products need to face fierce competition, and their clinical data do not show obvious advantages to competing products, making them hard to stand out.
Based on the announcement on Nov.12, 2024, valuation of Xuanzhu was RMB8.5 billion. However, due to the lack of competitive pipelines and weak commercialization prospects, we think Xuanzhu is overvalued.


Pre-IPO Xuanzhu Biopharmaceutical- Outdated Pipelines Are Difficult to Bring Good Investment Returns

Duality Biotherapeutics / Equity Capital Markets

<ul>
<li>Since DB-1303 has no advantage in clinical data in front of competing products, the commercialization outlook is gloomy. The priority for DB-1311 is to verify the druggability of this target.</li>
<li>Considering that the current capital market has become more and more rational toward innovative drug/biotech companies, the absence of commercialized products of Duality will obviously affect valuation expectations.</li>
<li>The post-money valuation after Series B+ financing is about US$270 million (or about RMB2 billion), which is not expensive, and there is a chance to obtain valuation premium after IPO. </li>
</ul>


Since DB-1303 has no advantage in clinical data in front of competing products, the commercialization outlook is gloomy. The priority for DB-1311 is to verify the druggability of this target.
Considering that the current capital market has become more and more rational toward innovative drug/biotech companies, the absence of commercialized products of Duality will obviously affect valuation expectations.
The post-money valuation after Series B+ financing is about US$270 million (or about RMB2 billion), which is not expensive, and there is a chance to obtain valuation premium after IPO. 


Pre-IPO Duality Biotherapeutics (PHIP Updates) - Some Points Worth the Attention

China

Alphamab Oncology produces and sells drugs. The Company manufactures and sells tumor immunobiology macromolecular targeted drug and other products. Alphamab Oncology provides services worldwide.

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Alphamab Co Ltd (9966 HK)

Ascentage Pharma (6855.HK) Placement - Thoughts on The Placing Price and the Outlook

The Placing price of HK$68.6 has priced in successful licensing deal of APG-2575. US$1.5-2.375bn is a more reasonable valuation. Biotech sector...

Xinyao (Criss) Wang

Pre-IPO China Medical System (867 HK) - About the IPO in Singapore and Concerns on Valuation Outlook

Listing in SGX opens a new chapter and CMS is undergoing pipeline adjustments and strategic transformation. But as valuation logic changes, license...

Xinyao (Criss) Wang

China Healthcare Weekly (Jun.29) - Biotech Valuation Bubble Is About to Burst, Innovent's Placement

The valuation bubble of innovative drug companies may burst soon, with some founders/shareholders already cashing out. Innovent's Placing Price of...

Xinyao (Criss) Wang

Pre-IPO Xuanzhu Biopharmaceutical- Outdated Pipelines Are Difficult to Bring Good Investment Returns

Sihuan's acquisition of Combio aims to create a strong innovative drug business Xuanzhu, but concerns arise over its outdated pipeline,...

Xinyao (Criss) Wang

Pre-IPO Duality Biotherapeutics (PHIP Updates) - Some Points Worth the Attention

DB-1303 face challenges in commercialization.The priority for DB-1311 is to verify the druggability. Duality’s pre-IPO valuation isn't...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Ascentage Pharma (6855.HK) Placement - Thoughts on The Placing Price and the Outlook

The Placing price of HK$68.6 has priced in successful licensing deal of APG-2575. US$1.5-2.375bn is a more reasonable valuation. Biotech sector...

Xinyao (Criss) Wang

Pre-IPO China Medical System (867 HK) - About the IPO in Singapore and Concerns on Valuation Outlook

Listing in SGX opens a new chapter and CMS is undergoing pipeline adjustments and strategic transformation. But as valuation logic changes, license...

Xinyao (Criss) Wang

China Healthcare Weekly (Jun.29) - Biotech Valuation Bubble Is About to Burst, Innovent's Placement

The valuation bubble of innovative drug companies may burst soon, with some founders/shareholders already cashing out. Innovent's Placing Price of...

Xinyao (Criss) Wang

Pre-IPO Xuanzhu Biopharmaceutical- Outdated Pipelines Are Difficult to Bring Good Investment Returns

​Sihuan's acquisition of Combio aims to create a strong innovative drug business Xuanzhu, but concerns arise over its outdated pipeline,...

Xinyao (Criss) Wang

Pre-IPO Duality Biotherapeutics (PHIP Updates) - Some Points Worth the Attention

​DB-1303 face challenges in commercialization.The priority for DB-1311 is to verify the druggability. Duality’s pre-IPO valuation isn't...

Xinyao (Criss) Wang

Sihuan's acquisition of Combio aims to create a strong innovative drug business Xuanzhu, but concerns arise over its outdated pipeline,...

DB-1303 face challenges in commercialization.The priority for DB-1311 is to verify the druggability. Duality’s pre-IPO valuation isn't...