Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Equity Capital Markets

Bio-Thera Solutions Ltd / Equity Capital Markets

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

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<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

<p>Last month, <a href="https://www.smartkarma.com/entities/shanghai-junshi-bioscience-a" target="_blank" data-smartkarma-citation="entities:31070:1" rel="noopener">Shanghai Junshi Bioscience (688180 CH)</a> released the performance announcement in 2020. Junshi is expected to achieve the revenue in 2020 of RMB1.595 billion, up 105.77% YoY. The Company's net loss attributed to shareholders could reach RMB1.672 billion, up 123.8% YoY. Meanwhile, the R&amp;D expenses are expected to reach RMB1.824 billion in 2020, up 92.79% YoY, which even exceeded the total revenue in 2020. It is also worth mentioning that the moment of glory of Junshi seems to be when it was listed on the SSE STAR Market in July 2020, with the market value of about RMB150 billion, and then its share price went all the way down to hit the bottom in December 2020 at RMB 64.8/share. On March 19, 2021, Junshi’s market value was RMB79 billion, down about 50% since July 2020. So could Junshi turn things around?</p>

Last month, Shanghai Junshi Bioscience (688180 CH) released the performance announcement in 2020. Junshi is expected to achieve the revenue in 2020 of RMB1.595 billion, up 105.77% YoY. The Company's net loss attributed to shareholders could reach RMB1.672 billion, up 123.8% YoY. Meanwhile, the R&amp;D expenses are expected to reach RMB1.824 billion in 2020, up 92.79% YoY, which even exceeded the total revenue in 2020. It is also worth mentioning that the moment of glory of Junshi seems to be when it was listed on the SSE STAR Market in July 2020, with the market value of about RMB150 billion, and then its share price went all the way down to hit the bottom in December 2020 at RMB 64.8/share. On March 19, 2021, Junshi’s market value was RMB79 billion, down about 50% since July 2020. So could Junshi turn things around?

Shanghai Junshi Bioscience - Here Are the Challenges

Bio-Thera Solutions Ltd / Equity Bottom-Up

<p>In the first quarter of 2021, following the failure of the BAT8001 phase III clinical trial, <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> announced the suspension of R&amp;D of two other projects in the pipeline, BAT8003 and BAT1306. It is estimated that Bio-Thera has invested about RMB340 million in these three projects. Currently, Bio-Thera has only one product (Qletli) on the market. In the financial reports of 2020, the revenue was RMB185 million and Qletli contributed about RMB183 million, almost the entire revenue of the Company. Meanwhile, the net loss in 2020 was RMB513 million, and the Company has been suffering from losses for five consecutive years. So, what's next for Bio-Thera after R&amp;D setbacks and years of losses?</p>

In the first quarter of 2021, following the failure of the BAT8001 phase III clinical trial, Bio-Thera Solutions Ltd (688177 CH) announced the suspension of R&amp;D of two other projects in the pipeline, BAT8003 and BAT1306. It is estimated that Bio-Thera has invested about RMB340 million in these three projects. Currently, Bio-Thera has only one product (Qletli) on the market. In the financial reports of 2020, the revenue was RMB185 million and Qletli contributed about RMB183 million, almost the entire revenue of the Company. Meanwhile, the net loss in 2020 was RMB513 million, and the Company has been suffering from losses for five consecutive years. So, what's next for Bio-Thera after R&amp;D setbacks and years of losses?

Bio-Thera Solutions (688177.CH) - What's Next for Bio-Thera After R&D Setbacks and Years of Losses?

<p>Last week, <a href="https://www.smartkarma.com/entities/remegen-co-ltd" target="_blank" data-smartkarma-citation="entities:29191:1" rel="noopener">Remegen Co Ltd (9995 HK)</a>'s core product RC18 has received conditional marketing approval in China for the treatment of SLE. RC18 is the first domestic innovative drug for the treatment of SLE approved for marketing in China in more than 60 years, with excellent therapeutic effect and is expected to fill the treatment gap. In addition, the Company officially launched its A-share IPO plan and is expected to list on the SSE STAR Market. The good news was also reflected in the stock price, in the last three trading days, the stock price of RemeGen increased by nearly 25%. </p>

Last week, Remegen Co Ltd (9995 HK)'s core product RC18 has received conditional marketing approval in China for the treatment of SLE. RC18 is the first domestic innovative drug for the treatment of SLE approved for marketing in China in more than 60 years, with excellent therapeutic effect and is expected to fill the treatment gap. In addition, the Company officially launched its A-share IPO plan and is expected to list on the SSE STAR Market. The good news was also reflected in the stock price, in the last three trading days, the stock price of RemeGen increased by nearly 25%. 

Remegen Co Ltd (9995.HK) - Commercialized RC18 + IPO On SSE STAR Market = New Chapter & Challenges

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)

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

Shanghai Junshi Bioscience - Here Are the Challenges

The article analyzed the concerns and challenges that Junshi has to face in terms of PD-1, COVID-19 antibody drug, other products in the pipeline...

Xinyao (Criss) Wang

Bio-Thera Solutions (688177.CH) - What's Next for Bio-Thera After R&D Setbacks and Years of Losses?

The article analyzed the concerns after the suspension of R&D of its three core products, the challenges of its listed product Qletli,and also the...

Xinyao (Criss) Wang

Remegen Co Ltd (9995.HK) - Commercialized RC18 + IPO On SSE STAR Market = New Chapter & Challenges

The article analyzed RemeGen's first commericalized product RC18, the challenges in R&D failure, fierce competition, commercialization and...

Xinyao (Criss) Wang

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