Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>Riding on multiple export contracts, <a href="https://www.smartkarma.com/entities/caregen-co-ltd" target="_blank" data-smartkarma-citation="entities:27337:1" rel="noopener">Caregen Co Ltd (214370 KS)</a> was confident of achieving KRW60–100B revenue from ProGsterol in 2023. However, during 9M23, ProGsterol clocked revenue of KRW8.5B.</li>
<li>ProGsterol should rebound in this year, with the resumption of registration process in each country. Direct entry in the U.S. should be the strong catalyst for ProGsterol revenue this year.</li>
<li>Caregen is developing an eye drop for wet macular degeneration. This is in phase 1 trial. The compay is preparing for phase 2 trial for COVID-19 nasal spray in Israel.</li>
</ul>


Riding on multiple export contracts, Caregen Co Ltd (214370 KS) was confident of achieving KRW60–100B revenue from ProGsterol in 2023. However, during 9M23, ProGsterol clocked revenue of KRW8.5B.
ProGsterol should rebound in this year, with the resumption of registration process in each country. Direct entry in the U.S. should be the strong catalyst for ProGsterol revenue this year.
Caregen is developing an eye drop for wet macular degeneration. This is in phase 1 trial. The compay is preparing for phase 2 trial for COVID-19 nasal spray in Israel.


Caregen (214370 KS): ProGsterol May Rebound in 2024; Ophthalmic and COVID-19 Pipeline To Watch

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/posco-dx-co-ltd" target="_blank" data-smartkarma-citation="entities:5198:1" rel="noopener">Posco DX (022100 KS)</a> continues to drop following its section transfer from the KOSDAQ market to the KOSPI market. Short interest in the stock nearly halved in December.</li>
<li>There were big net inflows to China ETFs with creations in <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300 Index</a> ETFs and redemptions in ETFs tracking the CSI 500 Index and CSI 1000 Index.</li>
<li>Creations continued in the <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex China (EMXC US)</a> ETF with units outstanding reaching a new high.</li>
</ul>



Posco DX (022100 KS) continues to drop following its section transfer from the KOSDAQ market to the KOSPI market. Short interest in the stock nearly halved in December.
There were big net inflows to China ETFs with creations in CSI 300 Index ETFs and redemptions in ETFs tracking the CSI 500 Index and CSI 1000 Index.
Creations continued in the iShares Emerging Markets ex China (EMXC US) ETF with units outstanding reaching a new high.


Index Rebalance & ETF Flow Recap: HSCEI, HSCI, KRX New Deal, NIFTY50, NEXT50, CNXBANK

Event-Driven

<ul>
<li>The Appraisal rights exercise period ends on 13 November. If the NPS and other large shareholders exercise their rights in <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, the merger could be in trouble.</li>
<li>Both stocks are trading close to their exercise price and could be supported due to the companies buying back their shares.</li>
<li>There will be passive flows from local and global trackers and there does not appear to be pre-positioning. That is likely due to the risk of potential merger cancellation.</li>
</ul>


The Appraisal rights exercise period ends on 13 November. If the NPS and other large shareholders exercise their rights in Celltrion Inc (068270 KS), the merger could be in trouble.
Both stocks are trading close to their exercise price and could be supported due to the companies buying back their shares.
There will be passive flows from local and global trackers and there does not appear to be pre-positioning. That is likely due to the risk of potential merger cancellation.


Celltrion Merger: Appraisal Rights & Passive Flows

<ul>
<li>
<a href="https://www.smartkarma.com/entities/caregen-co-ltd" target="_blank" data-smartkarma-citation="entities:27337:1" rel="noopener">Caregen Co Ltd (214370 KS)</a> is a niche biotech company, with focus on biomimetic peptide-based cosmeceuticals and medical devices targeting anti-aging industry. The company has a large addressable market opportunity.  </li>
<li>Despite the negative impact from the re-spread of COVID-19, Caregen reported 4% y/y growth in total revenue in H1 2022, with operating profit margin expanding 260bps.</li>
<li>Caregen’s COVID-19 nasal spray is in phase 1 trial. FDA has registered Caregen’s health functional food to control blood sugar as a new dietary ingredient (NDI).</li>
</ul>



Caregen Co Ltd (214370 KS) is a niche biotech company, with focus on biomimetic peptide-based cosmeceuticals and medical devices targeting anti-aging industry. The company has a large addressable market opportunity.  
Despite the negative impact from the re-spread of COVID-19, Caregen reported 4% y/y growth in total revenue in H1 2022, with operating profit margin expanding 260bps.
Caregen’s COVID-19 nasal spray is in phase 1 trial. FDA has registered Caregen’s health functional food to control blood sugar as a new dietary ingredient (NDI).


Caregen (214370 KS): Business Recovery Backed by Strong Global Demand; New Products Brighten Outlook

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>KOSDAQ 150 will replace Osstem with Caregen at the close on March 16.</li>
<li>Even if we conservatively assume KOSPI 150's direct rebalancing trading funds at ₩1.5T, Caregen will likely face a passive inflow of 4.76x ADTV.</li>
<li>So, it seems appropriate to approach this event as a short-term momentum trading with a small volume on Caregen right before the inclusion effective date.</li>
</ul>


KOSDAQ 150 will replace Osstem with Caregen at the close on March 16.
Even if we conservatively assume KOSPI 150's direct rebalancing trading funds at ₩1.5T, Caregen will likely face a passive inflow of 4.76x ADTV.
So, it seems appropriate to approach this event as a short-term momentum trading with a small volume on Caregen right before the inclusion effective date.


KOSDAQ 150 Special Change: Momentum Trading on Caregen Right Before Inclusion

South Korea

Caregen Co., Ltd. manufactures medical equipment based on their research on Growth Factors and purified Biomimetic Peptides.  The Company's products include Dermaheal and Renokin.

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Caregen Co Ltd (214370 KS)

Caregen (214370 KS): ProGsterol May Rebound in 2024; Ophthalmic and COVID-19 Pipeline To Watch

ProGsterol is expected to rebound with registration resuming globally. Caregen is developing an eye drop for wet macular degeneration and...

Tina Banerjee

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, KRX New Deal, NIFTY50, NEXT50, CNXBANK

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Celltrion Merger: Appraisal Rights & Passive Flows

The appraisal rights exercise period ends 13 Nov. Both companies are buying back shares. The last traded price is close to the appraisal price....

Brian Freitas

Caregen (214370 KS): Business Recovery Backed by Strong Global Demand; New Products Brighten Outlook

Caregen is seeing stable revenue from existing cosmeceutical and professional therapy products, driven by strong global demand. The company is...

Tina Banerjee

KOSDAQ 150 Special Change: Momentum Trading on Caregen Right Before Inclusion

KOSDAQ 150 will implement the special change (Osstem Out and Caregen In) at the close on March 16, providing short-term momentum trading on Caregen...

Sanghyun Park

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Caregen (214370 KS): ProGsterol May Rebound in 2024; Ophthalmic and COVID-19 Pipeline To Watch

​ProGsterol is expected to rebound with registration resuming globally. Caregen is developing an eye drop for wet macular degeneration and...

Tina Banerjee

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, KRX New Deal, NIFTY50, NEXT50, CNXBANK

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Celltrion Merger: Appraisal Rights & Passive Flows

The appraisal rights exercise period ends 13 Nov. Both companies are buying back shares. The last traded price is close to the appraisal price....

Brian Freitas

Caregen (214370 KS): Business Recovery Backed by Strong Global Demand; New Products Brighten Outlook

Caregen is seeing stable revenue from existing cosmeceutical and professional therapy products, driven by strong global demand. The company is...

Tina Banerjee

KOSDAQ 150 Special Change: Momentum Trading on Caregen Right Before Inclusion

KOSDAQ 150 will implement the special change (Osstem Out and Caregen In) at the close on March 16, providing short-term momentum trading on Caregen...

Sanghyun Park

ProGsterol is expected to rebound with registration resuming globally. Caregen is developing an eye drop for wet macular degeneration and...