HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>NRDL negotiation has completely changed the pricing method/valuation logic of innovative drugs. Even if price reduction could be milder this year, it’s hard to reverse the shrinking market size/slowing growth.</li>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> has successively acquired several factories/production facilities built by domestic biotech companies at low cost. However, we have several concerns.</li>
<li>The industry is in the process of understanding and adapting to various changes. The model capital envisioned for biotech to both develop and then commercialize drugs successfully doesn’t work anymore.</li>
</ul>


NRDL negotiation has completely changed the pricing method/valuation logic of innovative drugs. Even if price reduction could be milder this year, it’s hard to reverse the shrinking market size/slowing growth.

Wuxi Biologics (2269 HK) has successively acquired several factories/production facilities built by domestic biotech companies at low cost. However, we have several concerns.
The industry is in the process of understanding and adapting to various changes. The model capital envisioned for biotech to both develop and then commercialize drugs successfully doesn’t work anymore.


China Healthcare Weekly (Nov25)-Wuxi Biologics, Valuation Logic Changed by NRDL, Biotech Model Fails

Thematic (Sector/Industry)

<ul>
<li>The government issued a central infrastructure investment budget of RMB26.52 billion in healthcare sector for 2022. Related leading domestic manufacturers would maintain relatively stable growth in the next 2-3 years.</li>
<li>Behind the wave of import substitution of endoscopes, the demand for anesthetic drugs would also increase, which are not affected by VBP. We think this market deserves investors’ attention.</li>
<li>Considering the large number of insomniacs, the resulting demand for treatment makes the insomniacs market show a good growth prospect.</li>
</ul>


The government issued a central infrastructure investment budget of RMB26.52 billion in healthcare sector for 2022. Related leading domestic manufacturers would maintain relatively stable growth in the next 2-3 years.
Behind the wave of import substitution of endoscopes, the demand for anesthetic drugs would also increase, which are not affected by VBP. We think this market deserves investors’ attention.
Considering the large number of insomniacs, the resulting demand for treatment makes the insomniacs market show a good growth prospect.


China Healthcare Weekly (Nov.18) - Central Investment Budget, Anesthetic Drugs, Insomniacs Demand

<ul>
<li>The "Spring Coil Alliance Centralized Procurement" in 21 provinces led by Jilin is about to start. Such large-scale centralized procurement has certain reference significance for future nationwide centralized procurement expansion.</li>
<li>The rules and varieties of 8th national VBP could change, and biological drugs may be included in VBP together with chemical drugs.</li>
<li>The US FDA has recently tightened the policy of accelerated approval, which is correct, because at present, pharmaceutical enterprises are trying to “exploit loopholes”.</li>
</ul>


The "Spring Coil Alliance Centralized Procurement" in 21 provinces led by Jilin is about to start. Such large-scale centralized procurement has certain reference significance for future nationwide centralized procurement expansion.
The rules and varieties of 8th national VBP could change, and biological drugs may be included in VBP together with chemical drugs.
The US FDA has recently tightened the policy of accelerated approval, which is correct, because at present, pharmaceutical enterprises are trying to “exploit loopholes”.


China Healthcare Weekly (Nov.11)-Largest Spring Coil VBP; Biological Drug VBP; FDA Changes Game Rule

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Strong sales growth continued. BeiGene continued strong sales momentum in 3Q22, similar to 2Q22, with the product revenue in 3Q22 reaching US$349.5mn (+15% QoQ in 3Q22 vs +16% QoQ in 2Q22).</li><li>Sales of zanubrutinib (BTK) in 3Q22 increased to US$155.5mn with a QoQ growth rate of 21% (vs +23% QoQ in 2Q22), mainly driven by the strong sales in the overseas markets.</li><li>Tislelizumab (PD-1) also maintained strong growth in 3Q22, with sales increased by 22% QoQ, reaching US$128.2mn (vs +20% QoQ growth rate in 2Q22).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Strong sales growth continued. BeiGene continued strong sales momentum in 3Q22, similar to 2Q22, with the product revenue in 3Q22 reaching US$349.5mn (+15% QoQ in 3Q22 vs +16% QoQ in 2Q22).Sales of zanubrutinib (BTK) in 3Q22 increased to US$155.5mn with a QoQ growth rate of 21% (vs +23% QoQ in 2Q22), mainly driven by the strong sales in the overseas markets.Tislelizumab (PD-1) also maintained strong growth in 3Q22, with sales increased by 22% QoQ, reaching US$128.2mn (vs +20% QoQ growth rate in 2Q22).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BeiGene (BGNE US) – Strong Sales Momentum Maintained in 3Q22

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>Power / Cover Story: The dilemma of China’s power market restructuring</li><li>Policy / Xi Jinping repeats China’s commitment to opening-up policy</li><li>Covid-19 / Beijing shames local authorities for ‘one-size-fits-all’ Covid policies</li></ul>

Power / Cover Story: The dilemma of China’s power market restructuringPolicy / Xi Jinping repeats China’s commitment to opening-up policyCovid-19 / Beijing shames local authorities for ‘one-size-fits-all’ Covid policies

CX Daily: The Dilemma of China’s Power Market Restructuring

China

BeiGene, Ltd. operates as a commercial stage biopharmaceutical company. The Company focuses on discovery, development, and commercialization of molecularly targeted and immuno-oncology drugs for the treatment of cancer. BeiGene serves patients worldwide.

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BeOne (ONC US)

China Healthcare Weekly (Nov25)-Wuxi Biologics, Valuation Logic Changed by NRDL, Biotech Model Fails

NRDL negotiation completely changes the valuation logic of innovative drug. We've some concerns about WuXi Bio's new business updates. The model...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.18) - Central Investment Budget, Anesthetic Drugs, Insomniacs Demand

New central infrastructure investment budget means stable growth of medical devices; Anesthetic drugs are not affected by VBP, which deserves...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.11)-Largest Spring Coil VBP; Biological Drug VBP; FDA Changes Game Rule

The largest spring coil VBP led by Jilin has certain reference significance. Biological drugs may be included in 8th national VBP.After FDA changes...

Xinyao (Criss) Wang

BeiGene (BGNE US) – Strong Sales Momentum Maintained in 3Q22

BeiGene continued strong sales momentum in 3Q22, similar to 2Q22, with the product revenue in 3Q22 reaching US$349.5mn (+15% QoQ in 3Q22 vs +16%...

CMB International

CX Daily: The Dilemma of China’s Power Market Restructuring

Cover Story: The dilemma of China’s power market restructuring. Xi Jinping repeats China’s commitment to opening-up policy

Caixin Global

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