HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<p>Recently, according to the official website, <a href="https://www.smartkarma.com/entities/everest-medicines-ltd" target="_blank" data-smartkarma-citation="entities:29224:1" rel="noopener">Everest Medicines (1952 HK)</a> announced that its sacituzumab govitecan-hziy (SG, Trodelvy) was granted Priority Review by the Center for Drug Evaluation (CDE) of the China National Medical Products Administration (NMPA). This marks another progress following the Company's announcement that the NMPA accepted its Biologics License Application (BLA) for SG for the treatment of adult patients with unresectable locally advanced or metastatic triple-negative breast cancer (TNBC) who have received two or more prior systemic therapies, at least one of them for metastatic disease. The BLA submission of Trodelvy, the core product candidate of Everest Medicines, was substantially earlier than the Company's previous guidance and our expectations, so it is expected that Trodelvy would contribute sales revenue much earlier, and the Company’s commercialization prospect has reshaped.</p>

Recently, according to the official website, Everest Medicines (1952 HK) announced that its sacituzumab govitecan-hziy (SG, Trodelvy) was granted Priority Review by the Center for Drug Evaluation (CDE) of the China National Medical Products Administration (NMPA). This marks another progress following the Company's announcement that the NMPA accepted its Biologics License Application (BLA) for SG for the treatment of adult patients with unresectable locally advanced or metastatic triple-negative breast cancer (TNBC) who have received two or more prior systemic therapies, at least one of them for metastatic disease. The BLA submission of Trodelvy, the core product candidate of Everest Medicines, was substantially earlier than the Company's previous guidance and our expectations, so it is expected that Trodelvy would contribute sales revenue much earlier, and the Company’s commercialization prospect has reshaped.

Everest Medicines (1952.HK) - The Commercialization Prospect Has Reshaped

Equity Capital Markets

<p>On April 28, <a href="https://www.smartkarma.com/entities/lepu-biopharma-co-ltd" target="_blank" data-smartkarma-citation="entities:33231:1" rel="noopener">Lepu Biopharma (LBP HK)</a>, a subsidiary of <a href="https://www.smartkarma.com/entities/lepu-medical-technology-a" target="_blank" data-smartkarma-citation="entities:16654:1" rel="noopener">Lepu Medical Technology A (300003 CH)</a>, submitted its application to the main board of the Hong Kong Stock Exchange for listing. Actually, many companies in the medical device industry are good at capital operation, such as M&amp;A or spin-off and listing, which has been reflected in the leading medical device companies such as <a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical Electronics (300760 CH)</a> and <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a>. However, Lepu Medical is the only one that enters the fields of both drugs and preparations, and according to the pipeline, the focus is not only on generic drugs, but also on biological drugs of higher competitive dimension (e.g. Lepu Biopharma is in this field.). It is also worth mentioning that this is the second company of Lepu factions to be listed in Hong Kong. The first one was <a href="https://www.smartkarma.com/entities/pw-medtech-group-ltd" target="_blank" data-smartkarma-citation="entities:9891:1" rel="noopener">Pw Medtech (1358 HK)</a> (Zhang yue’e is Pu Zhongjie’s wife) and the share price has been very weak since its listing. So can Lepu Biopharma have a better performance?</p>

On April 28, Lepu Biopharma (LBP HK), a subsidiary of Lepu Medical Technology A (300003 CH), submitted its application to the main board of the Hong Kong Stock Exchange for listing. Actually, many companies in the medical device industry are good at capital operation, such as M&amp;A or spin-off and listing, which has been reflected in the leading medical device companies such as Shenzhen Mindray Bio-Medical Electronics (300760 CH) and Microport Scientific (853 HK). However, Lepu Medical is the only one that enters the fields of both drugs and preparations, and according to the pipeline, the focus is not only on generic drugs, but also on biological drugs of higher competitive dimension (e.g. Lepu Biopharma is in this field.). It is also worth mentioning that this is the second company of Lepu factions to be listed in Hong Kong. The first one was Pw Medtech (1358 HK) (Zhang yue’e is Pu Zhongjie’s wife) and the share price has been very weak since its listing. So can Lepu Biopharma have a better performance?

Pre-IPO Lepu Biopharma - There Are Still Many Uncertainties

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<div><p>The <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR 50 (STAR50 INDEX)</a> is a free float market cap weighted and is made up of the 50 largest stocks based on full market cap that are listed on the STAR Market.</p></div><div><p>The review period for the June rebalance ends on 30 April, the results of the rebalance will be announced towards the end of May and will be implemented at the close of trading on 11 June.</p></div><div>
<p>A maximum of 5 changes are permitted in a single review.</p>
<p><a href="https://www.smartkarma.com/entities/suntar-environmental-techn-a" target="_blank" data-smartkarma-citation="entities:30342:1" rel="noopener">Suntar Environmental Techn-A (688101 CH)</a>, <a href="https://www.smartkarma.com/entities/shenzhen-qingyi-photomask-ltd" target="_blank" data-smartkarma-citation="entities:30351:1" rel="noopener">Shenzhen Qingyi Photomask Ltd (688138 CH)</a>, <a href="https://www.smartkarma.com/entities/traffic-control-technology-co" target="_blank" data-smartkarma-citation="entities:30309:1" rel="noopener">Traffic Control Technology Co (688015 CH)</a>, <a href="https://www.smartkarma.com/entities/hillstone-networks-co-ltd" target="_blank" data-smartkarma-citation="entities:30321:1" rel="noopener">Hillstone Networks Co Ltd (688030 CH)</a> and <a href="https://www.smartkarma.com/entities/ningbo-solartron-technolog-a" target="_blank" data-smartkarma-citation="entities:30380:1" rel="noopener">Ningbo Solartron Technolog-A (688299 CH)</a> are high probability deletions from the index at the June review.</p>
<p>There is a high probability of <a href="https://www.smartkarma.com/entities/ninebot-ltd" target="_blank" data-smartkarma-citation="entities:32180:1" rel="noopener">Ninebot Ltd (689009 CH)</a>, <a href="https://www.smartkarma.com/entities/sansure-biotech-inc" target="_blank" data-smartkarma-citation="entities:32182:1" rel="noopener">Sansure Biotech Inc (688289 CH)</a>, <a href="https://www.smartkarma.com/entities/cansino-biologics-inc-cc0c90b7-e854-4ba3-929b-914be1bd0d89" target="_blank" data-smartkarma-citation="entities:32181:1" rel="noopener">CanSino Biologics Inc (688185 CH)</a>, <a href="https://www.smartkarma.com/entities/verisilicon-microelectronics" target="_blank" data-smartkarma-citation="entities:32183:1" rel="noopener">VeriSilicon Microelectronics (688521 CH)</a> and <a href="https://www.smartkarma.com/entities/cathay-biotech-inc" target="_blank" data-smartkarma-citation="entities:32184:1" rel="noopener">Cathay Biotech Inc (688065 CH)</a> being included in the index.</p>
<p>An alternate list of possible inclusions (with a lower probability) are <a href="https://www.smartkarma.com/entities/beijing-huafeng-test-con-a" target="_blank" data-smartkarma-citation="entities:30367:1" rel="noopener">Beijing Huafeng Test &amp; Con-A (688200 CH)</a>, <a href="https://www.smartkarma.com/entities/zhejiang-orient-gene-biotech-a" target="_blank" data-smartkarma-citation="entities:30379:1" rel="noopener">Zhejiang Orient Gene Biotech-A (688298 CH)</a>, <a href="https://www.smartkarma.com/entities/bio-thera-solutions-ltd" target="_blank" data-smartkarma-citation="entities:29127:1" rel="noopener">Bio-Thera Solutions Ltd (688177 CH)</a>, <a href="https://www.smartkarma.com/entities/hangzhou-raycloud-technolo-a" target="_blank" data-smartkarma-citation="entities:30391:1" rel="noopener">Hangzhou Raycloud Technolo-A (688365 CH)</a> and <a href="https://www.smartkarma.com/entities/hitgen-inc" target="_blank" data-smartkarma-citation="entities:30371:1" rel="noopener">HitGen Inc (688222 CH)</a>.</p>
<p>The expected inclusions and exclusions have been performing poorly over the last couple of months. The price falls have been accompanied by shrinking volume and the passive flow could have a larger impact on the stocks than what we had estimated earlier.</p>
<p>We recommend buying the expected inclusions and selling a highly correlated hedge basket to take advantage of the expected passive flows into the stocks.</p>
<p></p>
</div>

The SSE STAR 50 (STAR50 INDEX) is a free float market cap weighted and is made up of the 50 largest stocks based on full market cap that are listed on the STAR Market.The review period for the June rebalance ends on 30 April, the results of the rebalance will be announced towards the end of May and will be implemented at the close of trading on 11 June.
A maximum of 5 changes are permitted in a single review.
Suntar Environmental Techn-A (688101 CH), Shenzhen Qingyi Photomask Ltd (688138 CH), Traffic Control Technology Co (688015 CH), Hillstone Networks Co Ltd (688030 CH) and Ningbo Solartron Technolog-A (688299 CH) are high probability deletions from the index at the June review.
There is a high probability of Ninebot Ltd (689009 CH), Sansure Biotech Inc (688289 CH), CanSino Biologics Inc (688185 CH), VeriSilicon Microelectronics (688521 CH) and Cathay Biotech Inc (688065 CH) being included in the index.
An alternate list of possible inclusions (with a lower probability) are Beijing Huafeng Test &amp; Con-A (688200 CH), Zhejiang Orient Gene Biotech-A (688298 CH), Bio-Thera Solutions Ltd (688177 CH), Hangzhou Raycloud Technolo-A (688365 CH) and HitGen Inc (688222 CH).
The expected inclusions and exclusions have been performing poorly over the last couple of months. The price falls have been accompanied by shrinking volume and the passive flow could have a larger impact on the stocks than what we had estimated earlier.
We recommend buying the expected inclusions and selling a highly correlated hedge basket to take advantage of the expected passive flows into the stocks.



STAR Board - STAR50 Index Rebalance June Preview: Falling Volumes Increasing Impact

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Bio-Thera Solutions Ltd / Equity Capital Markets

<div>
<p>Bio-Thera is a China-based biopharmaceutical company. The company plans to raise at least USD 500m to list in Hong Kong. </p>
</div>
<div>
<p>In our past note, we discussed that although the company has already commercialized one product and has two under NDA reviews by the NMPA, we think its product line-up is not impressive with a lack of truly innovative products. We were of the view that the company's HER2-ADC drug BAT8001 is interesting given it's likely one of the first two domestically HER2-ADC to hit the market. </p>
<p>In this note, we would like to bring to investors' attention that the company has recently terminated three drug candidates, of which two were related to the ADC technology. As such we re-iterate that the quality of management and its R&amp;D is not the top tier among Chinese biotech companies.</p>
</div>


Bio-Thera is a China-based biopharmaceutical company. The company plans to raise at least USD 500m to list in Hong Kong. 


In our past note, we discussed that although the company has already commercialized one product and has two under NDA reviews by the NMPA, we think its product line-up is not impressive with a lack of truly innovative products. We were of the view that the company's HER2-ADC drug BAT8001 is interesting given it's likely one of the first two domestically HER2-ADC to hit the market. 
In this note, we would like to bring to investors' attention that the company has recently terminated three drug candidates, of which two were related to the ADC technology. As such we re-iterate that the quality of management and its R&amp;D is not the top tier among Chinese biotech companies.


Bio-Thera Solutions (百奥泰) A+H: Recent Termination of Drug Candidates

<p>Recently, <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> released the 2020 financial results. The net income attributed to shareholders in 2020 was RMB1.689 billion, up 66.59% YoY. The revenue of the Company was RMB5.612 billion, up 40.88% YoY. Meanwhile, in March, WuXi Biologics entered into an equity agreement with Pfizer to acquire its state-of-the-art biologics manufacturing facilities as well as its labor force in Hangzhou. Besides, the Company also entered into a purchase agreement with CBC Group and other companies including Ming Bioventures under which WuXi Biologics will acquire over 90% interest of CMAB Biopharma Group. These two transactions are expected to close in 2021. The Company's performance continues to grow at a high speed, and its capacity expansion exceeds expectations. </p>

Recently, Wuxi Biologics (2269 HK) released the 2020 financial results. The net income attributed to shareholders in 2020 was RMB1.689 billion, up 66.59% YoY. The revenue of the Company was RMB5.612 billion, up 40.88% YoY. Meanwhile, in March, WuXi Biologics entered into an equity agreement with Pfizer to acquire its state-of-the-art biologics manufacturing facilities as well as its labor force in Hangzhou. Besides, the Company also entered into a purchase agreement with CBC Group and other companies including Ming Bioventures under which WuXi Biologics will acquire over 90% interest of CMAB Biopharma Group. These two transactions are expected to close in 2021. The Company's performance continues to grow at a high speed, and its capacity expansion exceeds expectations. 

WuXi Biologics (2269 HK) - The Strength and the Potential Risk

China

Bio-Thera Solutions, Ltd. researches and develops innovative and biosimilar therapeutics. The Company produces innovative monoclonal antibodies, adalimumab biosimilars, innovative drugs, and other related products. Bio-Thera Solutions markets its products throughout China.

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Bio-Thera Solutions Ltd (688177 CH)

Everest Medicines (1952.HK) - The Commercialization Prospect Has Reshaped

After the BLA submission of Trodelvy, the commercialization prospect of Everest Medicines has reshaped. This article mainly analyzed the business...

Xinyao (Criss) Wang

Pre-IPO Lepu Biopharma - There Are Still Many Uncertainties

This article analyzed Lepu Biopharma in terms of its core product candidates in the pipeline, the challenges, concerns and future outlook for this...

Xinyao (Criss) Wang

STAR Board - STAR50 Index Rebalance June Preview: Falling Volumes Increasing Impact

We see 5 changes to the STAR50 Index at the June review. The deletions are high probability, but there is uncertainty on the inclusions due to a...

Brian Freitas

Bio-Thera Solutions (百奥泰) A+H: Recent Termination of Drug Candidates

We would like to bring to investors' attention that the company has recently terminated three drug candidates, of which two were related to the ADC...

Ke Yan, CFA, FRM

WuXi Biologics (2269 HK) - The Strength and the Potential Risk

This article analyzed WuXi Biologics in terms of its performance in 2020, the projects, production capacity, competition pattern, key catalyst and...

Xinyao (Criss) Wang

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