HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The 2022 NRDL negotiation results were released. We analyzed some points worth investor's attention.</li>
<li>The "safety pad" brought by medical insurance is difficult to ensure products future sales.Even after entering NRDL, how to improve patient/doctor coverage is an important problem for enterprises to consider.</li>
<li>Here are some companies that investors are interested in. We mainly analyzed some key points of them, including <a href="https://www.smartkarma.com/entities/sirnaomics-inc" target="_blank" data-smartkarma-citation="entities:33804:1" rel="noopener">Sirnaomics (2257 HK)</a>, <a href="https://www.smartkarma.com/entities/jw-therapeutics" target="_blank" data-smartkarma-citation="entities:29679:1" rel="noopener">JW Therapeutics (2126 HK)</a>, <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a>. </li>
</ul>


The 2022 NRDL negotiation results were released. We analyzed some points worth investor's attention.
The "safety pad" brought by medical insurance is difficult to ensure products future sales.Even after entering NRDL, how to improve patient/doctor coverage is an important problem for enterprises to consider.
Here are some companies that investors are interested in. We mainly analyzed some key points of them, including Sirnaomics (2257 HK), JW Therapeutics (2126 HK), Antengene (6996 HK). 


China Healthcare Weekly (Jan.20) - NRDL Negotiation Results, JW Therapeutics, Sirnaomics, Antengene

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Brilliance China Automotive / Index Rebalance

<ul>
<li>We see 44 potential adds (including plenty of new listings) and 19 potential deletes (on market cap, liquidity and suspension) for the Hang Seng Composite Index in March.</li>
<li>We expect 37 stocks to be added to Southbound Stock Connect following the rebalance while 37 stocks could be deleted from the trading link and become Sell-only. </li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 44 potential adds (including plenty of new listings) and 19 potential deletes (on market cap, liquidity and suspension) for the Hang Seng Composite Index in March.
We expect 37 stocks to be added to Southbound Stock Connect following the rebalance while 37 stocks could be deleted from the trading link and become Sell-only. 
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: A Lot of Change

<ul>
<li>We see 3 potential adds for the HSCI in December. We also see 26 potential adds and 16 potential deletes for the index in March.</li>
<li>Following the March rebalance, we see 22 potential inclusions to Stock Connect while we expect 37 stocks to be removed from the link.</li>
<li>Some of the potential deletions/ Stock Connect drops have large Southbound holdings and some of these positions could be pared back over the next few months.</li>
</ul>


We see 3 potential adds for the HSCI in December. We also see 26 potential adds and 16 potential deletes for the index in March.
Following the March rebalance, we see 22 potential inclusions to Stock Connect while we expect 37 stocks to be removed from the link.
Some of the potential deletions/ Stock Connect drops have large Southbound holdings and some of these positions could be pared back over the next few months.


HSCI Index Rebalance and Stock Connect: Changes at the Margins

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>On May 13, <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a> launched first drug, Xpovio in China as fourth-line treatment of relapsed/refractory multiple myeloma. Xpovio has also been launched in South Korea, Australia, and Singapore.</li>
<li>Xpovio reported revenue of RMB54 million in H1 2022. Antengene has guided for 2022 revenue of RMB180–200 million from Xpovio.</li>
<li>Late-Line MM therapy market is small and dominated by blockbuster drugs and low-cost generic versions of erstwhile blockbuster drugs, indicating muted growth potential for Xpovio in its current approval status.</li>
</ul>


On May 13, Antengene (6996 HK) launched first drug, Xpovio in China as fourth-line treatment of relapsed/refractory multiple myeloma. Xpovio has also been launched in South Korea, Australia, and Singapore.
Xpovio reported revenue of RMB54 million in H1 2022. Antengene has guided for 2022 revenue of RMB180–200 million from Xpovio.
Late-Line MM therapy market is small and dominated by blockbuster drugs and low-cost generic versions of erstwhile blockbuster drugs, indicating muted growth potential for Xpovio in its current approval status.


Antengene (6996 HK): First Drug Launched in Crowded Market of China Fails to Allure Investors

<ul>
<li>There’s an “insurmountable obstacle” to license-in business model. <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a> has to go all the way to the end. Otherwise, Antengene won't end up well.</li>
<li>Considering the pipeline quality/speed of clinical advancement/high cost of license-in/fierce competition/just APAC rights/limited cash balance, the biggest problem Antengene has to face is how to “survive this winter” .</li>
<li>Theoretically, Antengene is undervalued, so if willing to, investors could do short-term trade. However, due to the concerns, we are still bearish on Antengene’s outlook overall. </li>
</ul>


There’s an “insurmountable obstacle” to license-in business model. Antengene (6996 HK) has to go all the way to the end. Otherwise, Antengene won't end up well.
Considering the pipeline quality/speed of clinical advancement/high cost of license-in/fierce competition/just APAC rights/limited cash balance, the biggest problem Antengene has to face is how to “survive this winter” .
Theoretically, Antengene is undervalued, so if willing to, investors could do short-term trade. However, due to the concerns, we are still bearish on Antengene’s outlook overall. 


Antengene (6996.HK) 22H1-Defective Business Model and Uncompetitive Pipeline; Bearish on the Outlook

China

Antengene is a global, R&D-driven, commercial-stage biotech company focused on discovering, developing, manufacturing, and commercializing first-in-class/best-in-class therapeutics for hematologic malignancies and solid tumors. Its pipeline includes in-house discovered programs like ATG-022 and ATG-101, and its lead commercial asset is XPOVIO® (selinexor). The company also developed the AnTenGager® T cell engager platform. Antengene is headquartered in Shanghai, China, and was founded in 2017.

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Antengene (6996 HK)

China Healthcare Weekly (Jan.20) - NRDL Negotiation Results, JW Therapeutics, Sirnaomics, Antengene

We analyzed 2022 NRDL negotiation result - There're positive sides.The "safety pad" brought by medical insurance coverage may not be high.We...

Xinyao (Criss) Wang

HSCI Index Rebalance Preview and Stock Connect: A Lot of Change

We forecast 44 adds/19 deletes for the HSCI in March leading to 37 adds/deletes for Southbound Stock Connect. There could be more Connect changes...

Brian Freitas

HSCI Index Rebalance and Stock Connect: Changes at the Margins

We see 3 inclusions for the index in Dec, and then 26 adds/16 deletions in March. Following the March rebal, we see 22 adds/37 deletions for Stock...

Brian Freitas