Healthcare equity analyst - emerging & dev mkts, daaimon

Avien Pillay

Healthcare equity analyst - emerging & dev mkts

daaimon

daaimon is an independent research company focusing on healthcare and consumer sectors across developed and emerging markets. We produce insightful research which challenges conventional thinking. In particular, we look for new ideas by testing consensus forecasts and markets expectations.

Equity Bottom-Up

Innovent Biologics Inc / Equity Bottom-Up

<ul>
<li>Innovent is most well-known as the developer of mazdutide in China, however this is overshadowing a strong portfolio of oncology drugs in a very high growth market.</li>
<li>China’s approach to healthcare is being defined by having the biggest diabetic population, over 4 million new cancer cases per year, and over 100 million living with obesity.</li>
<li>We expect the valuation gap between the two first-to-market GLP-1 drugs, and competition to close. Oncology drug sales and valuations will continue its growth trajectory.</li>
</ul>


Innovent is most well-known as the developer of mazdutide in China, however this is overshadowing a strong portfolio of oncology drugs in a very high growth market.
China’s approach to healthcare is being defined by having the biggest diabetic population, over 4 million new cancer cases per year, and over 100 million living with obesity.
We expect the valuation gap between the two first-to-market GLP-1 drugs, and competition to close. Oncology drug sales and valuations will continue its growth trajectory.


Innovent Biologics(1801 HK)– More than Just a GLP-1 Play

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>23H2 net loss significantly widened as cost control was not as tight as in 23H1. Expenses would remain high in 2024, since Innovent would continue expanding team in CVM field.</li>
<li>Innovent may think that not many players will join the competition of weight loss drug in short-term, but the actual commercialization of mazdutide after launch could be full of uncertainties.</li>
<li>It’s already good for Innovent to be breakeven in 2025. If Innovent breaks even in 2024, it will exceed expectations.Considering major policy shift, Innovent could experience a leap in valuation.</li>
</ul>


23H2 net loss significantly widened as cost control was not as tight as in 23H1. Expenses would remain high in 2024, since Innovent would continue expanding team in CVM field.
Innovent may think that not many players will join the competition of weight loss drug in short-term, but the actual commercialization of mazdutide after launch could be full of uncertainties.
It’s already good for Innovent to be breakeven in 2025. If Innovent breaks even in 2024, it will exceed expectations.Considering major policy shift, Innovent could experience a leap in valuation.


2024 High Conviction Update: Innovent (1801.HK) - Breakeven Is Still on Track Despite Soaring Costs

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 product sales in FY23. In FY23, Innovent recorded total revenue of RMB6.21bn, including RMB5.73bn product sales revenue (+38.4% YoY), in line with our expectation.</li><li>Innovent had a strong 2H23, with product sales +33.1% HoH vs the first half. As per Eli Lilly, total sales of sintilimab in FY23 reached US$393.3mn (RMB2.75bn), +34.0% YoY, thanks to the extension of NRDL coverage with stable pricing.</li><li>We forecast sales of sintilimab to reach RMB3.29bn in 2024E (+19% YoY) and expect the drug to maintain its leading position in China’s PD-(L)1 market</li></ul><p><em>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.</em></p>

Strong product sales in FY23. In FY23, Innovent recorded total revenue of RMB6.21bn, including RMB5.73bn product sales revenue (+38.4% YoY), in line with our expectation.Innovent had a strong 2H23, with product sales +33.1% HoH vs the first half. As per Eli Lilly, total sales of sintilimab in FY23 reached US$393.3mn (RMB2.75bn), +34.0% YoY, thanks to the extension of NRDL coverage with stable pricing.We forecast sales of sintilimab to reach RMB3.29bn in 2024E (+19% YoY) and expect the drug to maintain its leading position in China’s PD-(L)1 marketContent 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.

Innovent Biologics (1801 HK) - More than Obesity

<ul>
<li>Innovent’s 2023 product revenue was RMB5.7 billion. In 2024, product revenue growth would remain strong (e.g. 35% YoY).The main flashpoint for performance is after the approval of mazdutide in 2025.</li>
<li>Innovent has started paving the way for mazdutide more than a year in advance and building various channels.Normally speaking, mazdutide could get the approval in 25Q2. Its CDMO is Asymchem</li>
<li>Share price of Innovent was once dragged down by the CXO plunge due to the US Draft Bill, but unlike CXOs, innovative drugs do not involve supply chain security issues.</li>
</ul>


Innovent’s 2023 product revenue was RMB5.7 billion. In 2024, product revenue growth would remain strong (e.g. 35% YoY).The main flashpoint for performance is after the approval of mazdutide in 2025.
Innovent has started paving the way for mazdutide more than a year in advance and building various channels.Normally speaking, mazdutide could get the approval in 25Q2. Its CDMO is Asymchem
Share price of Innovent was once dragged down by the CXO plunge due to the US Draft Bill, but unlike CXOs, innovative drugs do not involve supply chain security issues.


2024 High Conviction Update: Innovent (1801.HK) - Recent Promising Business Updates and 2024 Outlook

<ul>
<li>Innovent has launched head-to-head phase III clinical trial of Mazdutide and Semaglutide. If the challenge is successful, it will have milestone significance. Domestic sales of Mazdutide will look very promising.</li>
<li>Innovent received negative news on CEACAM5 ADC/KRAS G12C.When independent R&amp;D cannot be relied upon, Innovent has to seek new sources of growth to make up for the remaining sales gap.</li>
<li>There’s nothing wrong with Innovent’s development strategy by balancing both success rate and efficiency, although Innovent is hard to become a leader in cutting-edge R&amp;D. We remain optimistic on Innovent.</li>
</ul>


Innovent has launched head-to-head phase III clinical trial of Mazdutide and Semaglutide. If the challenge is successful, it will have milestone significance. Domestic sales of Mazdutide will look very promising.
Innovent received negative news on CEACAM5 ADC/KRAS G12C.When independent R&amp;D cannot be relied upon, Innovent has to seek new sources of growth to make up for the remaining sales gap.
There’s nothing wrong with Innovent’s development strategy by balancing both success rate and efficiency, although Innovent is hard to become a leader in cutting-edge R&amp;D. We remain optimistic on Innovent.


2024 High Conviction Update: Innovent (1801.HK)- New Business Progress Reinforces Optimistic Outlook

China

Innovent Biologics, Inc. operates as a biopharmaceutical company. The Company develops, manufactures, and distributes monoclonal antibody drug candidates for the treatment of oncology, ophthalmology, autoimmune, cardiovascular, and other diseases. Innovent Biologics serves customers in China.

Innovent Biologics Inc (1801 HK)

Innovent Biologics(1801 HK)– More than Just a GLP-1 Play

Mazdutide's strong results will position it well against the competition, and the valuation gap will narrow. The oncology portfolio will continue...

Avien Pillay

2024 High Conviction Update: Innovent (1801.HK) - Breakeven Is Still on Track Despite Soaring Costs

Loose cost control led to an expansion of losses in 23H2, but the goal of breakeven in 2025 is still within the plan, which could be achieved...

Xinyao (Criss) Wang

Innovent Biologics (1801 HK) - More than Obesity

Strong product sales in FY23. In FY23, Innovent recorded total revenue of RMB6.21bn, including RMB5.73bn product sales revenue (+38.4% YoY), in...

CMB International

2024 High Conviction Update: Innovent (1801.HK) - Recent Promising Business Updates and 2024 Outlook

Innovent's product revenue growth will remain strong in 2024.The main flashpoint for performance is after the approval of mazdutide in...

Xinyao (Criss) Wang

2024 High Conviction Update: Innovent (1801.HK)- New Business Progress Reinforces Optimistic Outlook

Innovent has made a series of new business progress that deserves investors' attention. We have confidence that Innovent would ultimately achieve...

Xinyao (Criss) Wang