HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Hansoh Pharmaceutical Group  / Equity Bottom-Up

<ul>
<li>Hansoh’s performance in 2023 beat expectations, which was mainly driven by collaboration revenue. Revenue proportion of innovative drug business made breakthrough and has become the major performance driver.</li>
<li>Ameile’s future revenue growth is critical to Hansoh, but it faces increasing competition. EGFR/c-MET BsAb represents the future trend. If HS-20117 is successful, then the story of EGFR would continue.</li>
<li>In 2024, Hansoh is expected to receive an upfront payment of US$185 million from GSK. According to the management, revenue is expected to have double digit growth this year.</li>
</ul>


Hansoh’s performance in 2023 beat expectations, which was mainly driven by collaboration revenue. Revenue proportion of innovative drug business made breakthrough and has become the major performance driver.
Ameile’s future revenue growth is critical to Hansoh, but it faces increasing competition. EGFR/c-MET BsAb represents the future trend. If HS-20117 is successful, then the story of EGFR would continue.
In 2024, Hansoh is expected to receive an upfront payment of US$185 million from GSK. According to the management, revenue is expected to have double digit growth this year.


Hansoh Pharmaceutical (3692.HK) - Growth Would Remain Strong in 2024, but Ameile Is Facing Headwinds

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group-co" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical Group (3692 HK)</a> reported a whopping 55% YoY net profit growth to RMB3 billion on just 13% YoY revenue growth to RMB6 billion in 2H23.</li>
<li>Revenue from innovative drugs zoomed 52% YoY to RMB4 billion and its proportion to total revenue increased to 73% in 2H23 from 54% in 2H22 and 62% in 1H23.</li>
<li>Although Hansoh is not expected to receive marketing approval for any in-house innovative product in 2024, existing portfolio of innovative drugs will continue to drive the growth of the company.</li>
</ul>



Hansoh Pharmaceutical Group (3692 HK) reported a whopping 55% YoY net profit growth to RMB3 billion on just 13% YoY revenue growth to RMB6 billion in 2H23.
Revenue from innovative drugs zoomed 52% YoY to RMB4 billion and its proportion to total revenue increased to 73% in 2H23 from 54% in 2H22 and 62% in 1H23.
Although Hansoh is not expected to receive marketing approval for any in-house innovative product in 2024, existing portfolio of innovative drugs will continue to drive the growth of the company.


Hansoh Pharmaceutical (3692 HK): Performance Improves in 2H23; Innovative Drugs to Continue to Roar

<ul>
<li>The early-stage clinical data of Hansoh’s B7-H4 ADC showed good potential, thus attracting GSK's attention. This would allow GSK to re-enhance the layout of ADC pipelines after its previous setbacks.</li>
<li>However, if future clinical data fail to meet expectation, GSK could return the product to Hansoh. After all, US$85 million upfront is more likely to test the waters for GSK.</li>
<li>Hansoh is already one step ahead of Hengrui in terms of internationalization. This short-term catalyst would no doubt help lift share prices, but the logic behind the rebound is shaky.</li>
</ul>


The early-stage clinical data of Hansoh’s B7-H4 ADC showed good potential, thus attracting GSK's attention. This would allow GSK to re-enhance the layout of ADC pipelines after its previous setbacks.
However, if future clinical data fail to meet expectation, GSK could return the product to Hansoh. After all, US$85 million upfront is more likely to test the waters for GSK.
Hansoh is already one step ahead of Hengrui in terms of internationalization. This short-term catalyst would no doubt help lift share prices, but the logic behind the rebound is shaky.


GSK Inks Eye-Popping $2B-Plus Pact for Hansoh’s ADC - Is The "New Story" About to Begin?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group-co" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical Group (3692 HK)</a> entered into a license agreement with <a href="https://www.smartkarma.com/entities/glaxosmithkline-plc" target="_blank" data-smartkarma-citation="entities:21960:1" rel="noopener">GlaxoSmithKline PLC (GSK LN)</a> for a B7-H4 targeted antibody-drug conjugate candidate, HS-20089, targeted toward gynecological cancers.  </li>
<li>Hansoh will receive an upfront payment of $85M and be eligible to receive milestone payments of up to $1.485B subject to achievement of relevant milestone events with respect to HS-20089.</li>
<li>Currently, HS-20089 is in phase 1 clinical trial in China. GSK plans to begin phase 1 trial of HS-20089 outside of China in 2024.</li>
</ul>



Hansoh Pharmaceutical Group (3692 HK) entered into a license agreement with GlaxoSmithKline PLC (GSK LN) for a B7-H4 targeted antibody-drug conjugate candidate, HS-20089, targeted toward gynecological cancers.  
Hansoh will receive an upfront payment of $85M and be eligible to receive milestone payments of up to $1.485B subject to achievement of relevant milestone events with respect to HS-20089.
Currently, HS-20089 is in phase 1 clinical trial in China. GSK plans to begin phase 1 trial of HS-20089 outside of China in 2024.


Hansoh Pharmaceutical (3692 HK): New Licensing Deal Boosts Conviction on Innovative Pipeline Prowess

<ul>
<li>VBP would continue to have an impact on Hansoh’s generic drug business in 2023.Such negative impact would gradually fade from 2024 as big varieties have all been included in VBP.</li>
<li>The core difference between Hansoh and Hengrui is that someone similar to Zhang Lianshan's role arrived late, resulting in a slower start and weaker overall framework for innovation drug business.</li>
<li>
<a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a> is still in the process of business transformation. Before the harvest time of innovative drug pipeline comes, Hansoh's valuation growth would still be a long-term story.</li>
</ul>


VBP would continue to have an impact on Hansoh’s generic drug business in 2023.Such negative impact would gradually fade from 2024 as big varieties have all been included in VBP.
The core difference between Hansoh and Hengrui is that someone similar to Zhang Lianshan's role arrived late, resulting in a slower start and weaker overall framework for innovation drug business.

Hansoh Pharmaceutical (3692 HK) is still in the process of business transformation. Before the harvest time of innovative drug pipeline comes, Hansoh's valuation growth would still be a long-term story.


Hansoh Pharmaceutical (3692.HK)- Positive Growth in 2023, but Valuation Turning Point Hasn't Arrived

China

Hansoh Pharmaceutical Group Company Limited operates as a pharmaceutical company. The Company manufactures and sells anti-infectives, anti-neoplastic agents, diabetes drugs, and other products. Hansoh Pharmaceutical Group markets its products throughout China.

Hansoh Pharmaceutical Group (3692 HK)

Hansoh Pharmaceutical (3692.HK) - Growth Would Remain Strong in 2024, but Ameile Is Facing Headwinds

Driven by collaboration revenue/breakthrough in innovative drug business, Hansoh's 2023 results beat expectations. But Ameile’s future growth...

Xinyao (Criss) Wang

Hansoh Pharmaceutical (3692 HK): Performance Improves in 2H23; Innovative Drugs to Continue to Roar

Hansoh Pharmaceutical reported an impressive 55% YoY net profit growth in 2H23, driven by revenue from innovative drugs, which grew 52% YoY and...

Tina Banerjee

GSK Inks Eye-Popping $2B-Plus Pact for Hansoh’s ADC - Is The "New Story" About to Begin?

GSK-Hansoh's ADC deal surprised many people.But if future clinical data fail to meet expectation,GSK could return the product to Hansoh.Current...

Xinyao (Criss) Wang

Hansoh Pharmaceutical (3692 HK): New Licensing Deal Boosts Conviction on Innovative Pipeline Prowess

Hansoh Pharma will receive an upfront payment of $85M and potential milestone payments of up to $1.485B. The licensed drug candidate is currently...

Tina Banerjee

Hansoh Pharmaceutical (3692.HK)- Positive Growth in 2023, but Valuation Turning Point Hasn't Arrived

Despite high growth in innovative drug business, Hansoh's business transformation is still uncertain due to low quality of innovative drug...

Xinyao (Criss) Wang

Hansoh Pharmaceutical (3692.HK) - Growth Would Remain Strong in 2024, but Ameile Is Facing Headwinds

​Driven by collaboration revenue/breakthrough in innovative drug business, Hansoh's 2023 results beat expectations. But Ameile’s future growth...

Xinyao (Criss) Wang

Hansoh Pharmaceutical (3692 HK): Performance Improves in 2H23; Innovative Drugs to Continue to Roar

​Hansoh Pharmaceutical reported an impressive 55% YoY net profit growth in 2H23, driven by revenue from innovative drugs, which grew 52% YoY and...

Tina Banerjee

GSK Inks Eye-Popping $2B-Plus Pact for Hansoh’s ADC - Is The "New Story" About to Begin?

GSK-Hansoh's ADC deal surprised many people.But if future clinical data fail to meet expectation,GSK could return the product to Hansoh.Current...

Xinyao (Criss) Wang

Hansoh Pharmaceutical (3692 HK): New Licensing Deal Boosts Conviction on Innovative Pipeline Prowess

​Hansoh Pharma will receive an upfront payment of $85M and potential milestone payments of up to $1.485B. The licensed drug candidate is currently...

Tina Banerjee

Hansoh Pharmaceutical (3692.HK)- Positive Growth in 2023, but Valuation Turning Point Hasn't Arrived

Despite high growth in innovative drug business, Hansoh's business transformation is still uncertain due to low quality of innovative drug...

Xinyao (Criss) Wang

Driven by collaboration revenue/breakthrough in innovative drug business, Hansoh's 2023 results beat expectations. But Ameile’s future growth...

Hansoh Pharmaceutical reported an impressive 55% YoY net profit growth in 2H23, driven by revenue from innovative drugs, which grew 52% YoY and...

Hansoh Pharma will receive an upfront payment of $85M and potential milestone payments of up to $1.485B. The licensed drug candidate is currently...