HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Innovent Biologics Inc / Equity Bottom-Up

<ul>
<li>Innovent’s 24H1 product revenue exceeded RMB3.7 billion.Due to anti-corruption campaign, newly marketed PD-1s are unable to be admitted to the hospitals normally, which indirectly promotes the sales performance of sintilimab.</li>
<li>2024 full-year product revenue is estimated to reach RMB7.7 billion. IBI363 has the potential to be blockbuster variety in global markets, which may put Innovent’s valuation on a new level.</li>
<li>Innovent is undervalued if market value is below RMB38.5 billion.If mazdutide is able to contribute RMB10 billion sales, Innovent’s market value would reach about RMB90-100 billion (based on 5 P/S).</li>
</ul>


Innovent’s 24H1 product revenue exceeded RMB3.7 billion.Due to anti-corruption campaign, newly marketed PD-1s are unable to be admitted to the hospitals normally, which indirectly promotes the sales performance of sintilimab.
2024 full-year product revenue is estimated to reach RMB7.7 billion. IBI363 has the potential to be blockbuster variety in global markets, which may put Innovent’s valuation on a new level.
Innovent is undervalued if market value is below RMB38.5 billion.If mazdutide is able to contribute RMB10 billion sales, Innovent’s market value would reach about RMB90-100 billion (based on 5 P/S).


2024 High Conviction Update: Innovent (1801.HK) 24Q2 - Valuation Upside Will Be Further Opened Up

<ul>
<li>We summarized the varieties that would miss 2024 NRDL negotiation and have to wait until 2026 to enter medical insurance coverage. This however means competing products would have more advantages.</li>
<li>As the NRDL negotiation becomes more transparent/reasonable, there will be a balance point among companies’ profits, patient affordability and medical insurance budget. So, there's no need to be overly pessimistic.</li>
<li>The approval process of CanSino’s PCV13i could be faster than expected. 2024 is the best time to bottom-fish this stock. Reasonable market value is at least RMB5 billion.</li>
</ul>


We summarized the varieties that would miss 2024 NRDL negotiation and have to wait until 2026 to enter medical insurance coverage. This however means competing products would have more advantages.
As the NRDL negotiation becomes more transparent/reasonable, there will be a balance point among companies’ profits, patient affordability and medical insurance budget. So, there's no need to be overly pessimistic.
The approval process of CanSino’s PCV13i could be faster than expected. 2024 is the best time to bottom-fish this stock. Reasonable market value is at least RMB5 billion.


China Healthcare Weekly (Aug.11) - 2024 NRDL Negotiation, China Biotech Outlook, Bottom Fish CanSino

<ul>
<li>Fruquintinib US sales continue to be the main performance driver. License-out expectations for surufatinib is low.Highlight for savolitinib is the combination with osimertinib for NSCLC, which would bring high growth.</li>
<li>Future playbook of HUTCHMED is “continued sharp reduction of expenses + milestones from Takeda based on fruquintinib overseas sales = rapid narrowng of losses”.2024 overseas market sales may exceed US$300m.</li>
<li>There is not much problem with HUTCHMED completing its performance guidance for the year 2024. Reasonable market value range for HUTCHMED is US$1.75-3.75 billion. Breakeven is expected in 2025.</li>
</ul>


Fruquintinib US sales continue to be the main performance driver. License-out expectations for surufatinib is low.Highlight for savolitinib is the combination with osimertinib for NSCLC, which would bring high growth.
Future playbook of HUTCHMED is “continued sharp reduction of expenses + milestones from Takeda based on fruquintinib overseas sales = rapid narrowng of losses”.2024 overseas market sales may exceed US$300m.
There is not much problem with HUTCHMED completing its performance guidance for the year 2024. Reasonable market value range for HUTCHMED is US$1.75-3.75 billion. Breakeven is expected in 2025.


Hutchmed China Ltd (13.HK/​​HCM.US) 24H1 - Fruquintinib's US Sales Beat; Break-Even Is Within Reach

Healthcare Equity Analyst - Emerging & Dev Markets, daaimon

Avien Pillay

Healthcare Equity Analyst - Emerging & Dev Markets

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.

Thematic (Sector/Industry)

<ul>
<li>The GLP-1 market is evolving at a rapid pace, and we have quickly moved onto the development of a triple agonist drug.</li>
<li>First mover advantage is expected to lose steam as more effective GLP-1s are launched.</li>
<li>Scary side effects; challenged patents and strong competition will favour the cost-effective producers.</li>
</ul>


The GLP-1 market is evolving at a rapid pace, and we have quickly moved onto the development of a triple agonist drug.
First mover advantage is expected to lose steam as more effective GLP-1s are launched.
Scary side effects; challenged patents and strong competition will favour the cost-effective producers.


Equity Capital Markets

Elpiscience Biopharmaceuticals / Equity Capital Markets

<ul>
<li>Elpiscience is incubated by LAV from the very beginning.The Company has strong capital operation capabilities, but the story of "founding team's decent background + star cornerstone investors" doesn't work anymore.</li>
<li>Elpiscience’s pipelines are still in early stage. However, investors are rational. They will no longer believe in those "good stories", but focus more on cash flow and drug sales revenue.</li>
<li>Elpiscience’s business model has raised concerns about its future product sales scale and profits.The market may not recognize the post-investment valuation of US$599 million if check the valuation of peers.</li>
</ul>


Elpiscience is incubated by LAV from the very beginning.The Company has strong capital operation capabilities, but the story of "founding team's decent background + star cornerstone investors" doesn't work anymore.
Elpiscience’s pipelines are still in early stage. However, investors are rational. They will no longer believe in those "good stories", but focus more on cash flow and drug sales revenue.
Elpiscience’s business model has raised concerns about its future product sales scale and profits.The market may not recognize the post-investment valuation of US$599 million if check the valuation of peers.


Pre-IPO Elpiscience Biopharmaceuticals - Will Investors Still Buy in These Stories?

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.

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Innovent Biologics Inc (1801 HK)

2024 High Conviction Update: Innovent (1801.HK) 24Q2 - Valuation Upside Will Be Further Opened Up

Innovent's revenue growth in 24H1 was commendable. IBI363 has the potential to be blockbuster drug in global markets. Market value to reach above...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.11) - 2024 NRDL Negotiation, China Biotech Outlook, Bottom Fish CanSino

Some drugs won't be covered by insurance until 2026, giving competitors an edge. As NRDL negotiation is transparent, no need to be pessimistic on...

Xinyao (Criss) Wang

Hutchmed China Ltd (13.HK/HCM.US) 24H1 - Fruquintinib's US Sales Beat; Break-Even Is Within Reach

HUTCHMED's fruquintinib US sales and savolitinib combination with osimertinib for NSCLC will drive future growth. Breakeven in 2025 is expected...

Xinyao (Criss) Wang

GLP-1s - Update 1

The GLP-1 market is evolving at a rapid pace and strong competition, patent challenges, and pressure to solve the obesity epidemic will favour the...

daaimon

Pre-IPO Elpiscience Biopharmaceuticals - Will Investors Still Buy in These Stories?

Elpiscience's strong capital operation capabilities are no longer enough as investors shift focus to cash flow and drug sales revenue. We have...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

2024 High Conviction Update: Innovent (1801.HK) 24Q2 - Valuation Upside Will Be Further Opened Up

​Innovent's revenue growth in 24H1 was commendable. IBI363 has the potential to be blockbuster drug in global markets. Market value to reach above...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.11) - 2024 NRDL Negotiation, China Biotech Outlook, Bottom Fish CanSino

​Some drugs won't be covered by insurance until 2026, giving competitors an edge. As NRDL negotiation is transparent, no need to be pessimistic on...

Xinyao (Criss) Wang

Hutchmed China Ltd (13.HK/​​HCM.US) 24H1 - Fruquintinib's US Sales Beat; Break-Even Is Within Reach

​HUTCHMED's fruquintinib US sales and savolitinib combination with osimertinib for NSCLC will drive future growth. Breakeven in 2025 is expected...

Xinyao (Criss) Wang

GLP-1s - Update 1

The GLP-1 market is evolving at a rapid pace and strong competition, patent challenges, and pressure to solve the obesity epidemic will favour the...

daaimon

Pre-IPO Elpiscience Biopharmaceuticals - Will Investors Still Buy in These Stories?

​Elpiscience's strong capital operation capabilities are no longer enough as investors shift focus to cash flow and drug sales revenue. We have...

Xinyao (Criss) Wang

Innovent's revenue growth in 24H1 was commendable. IBI363 has the potential to be blockbuster drug in global markets. Market value to reach above...

Some drugs won't be covered by insurance until 2026, giving competitors an edge. As NRDL negotiation is transparent, no need to be pessimistic on...

Hutchmed China Ltd (13.HK/HCM.US) 24H1 - Fruquintinib's US Sales Beat; Break-Even Is Within Reach

HUTCHMED's fruquintinib US sales and savolitinib combination with osimertinib for NSCLC will drive future growth. Breakeven in 2025 is expected...

Elpiscience's strong capital operation capabilities are no longer enough as investors shift focus to cash flow and drug sales revenue. We have...