HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Shanghai Junshi Biosciences  / Equity Capital Markets

<ul>
<li>Junshi’s fatal flaw is not that it is still suffering loss, or that its founders have no medical background, but that the Company is very short of money.</li>
<li>Considering the gloomy prospects of etesevimab/VV116, uncertainties in toripalimab and other late-stage candidates, we remain conservative about Junshi’s commercialization outlook. Junshi's higher valuation than Innovent is not justified.</li>
<li>Together with unfriendly macro environment, we don’t think heavy investment in R&amp;D/MRCT/commercial development could bring high return as expected.Investors need to be rational about Junshi's RMB4 billion private placement plan.</li>
</ul>


Junshi’s fatal flaw is not that it is still suffering loss, or that its founders have no medical background, but that the Company is very short of money.
Considering the gloomy prospects of etesevimab/VV116, uncertainties in toripalimab and other late-stage candidates, we remain conservative about Junshi’s commercialization outlook. Junshi's higher valuation than Innovent is not justified.
Together with unfriendly macro environment, we don’t think heavy investment in R&amp;D/MRCT/commercial development could bring high return as expected.Investors need to be rational about Junshi's RMB4 billion private placement plan.


Shanghai Junshi Bioscience Placement- Junshi Is Having a Hard Time, with Lower than Expected Returns

Thematic (Sector/Industry)

<ul>
<li>The NMPA has issued a draft regulation about rare diseases, which would have a profound impact. Investors are advised to follow this field as policy becomes more friendly.</li>
<li>After continuous corrections, many investors are wondering if the healthcare sector has reached bottom. We analyzed our thoughts and judgement.</li>
<li>Let's have a look at the lockdown in China from a different angle. The zero-COVID policy could make economic sense. The “travails” are significant for the coming economic crisis.</li>
</ul>


The NMPA has issued a draft regulation about rare diseases, which would have a profound impact. Investors are advised to follow this field as policy becomes more friendly.
After continuous corrections, many investors are wondering if the healthcare sector has reached bottom. We analyzed our thoughts and judgement.
Let's have a look at the lockdown in China from a different angle. The zero-COVID policy could make economic sense. The “travails” are significant for the coming economic crisis.


China Healthcare Weekly (May20)-Lockdown Impact on Macro Economy, Bottom Signal? Rare Disease Policy

<ul>
<li>China biotech companies are “being squeezed” between the negative domestic policies and the dilemma of internationalization. The investment logic of biotech has broken and the valuation forecasts are ineffective.</li>
<li>For CXO, the uncertainties outweigh the certainties.Investors need to be prepared for the possibility of CXO not to return to its peak, because its best time may have been over.</li>
<li>We’re in a very complicated environment. A lot of things come together. Survive first. Seize rebounds after plunge rather than go bottom fishing. You don't know when the bottom is. </li>
</ul>


China biotech companies are “being squeezed” between the negative domestic policies and the dilemma of internationalization. The investment logic of biotech has broken and the valuation forecasts are ineffective.
For CXO, the uncertainties outweigh the certainties.Investors need to be prepared for the possibility of CXO not to return to its peak, because its best time may have been over.
We’re in a very complicated environment. A lot of things come together. Survive first. Seize rebounds after plunge rather than go bottom fishing. You don't know when the bottom is. 


Re-Examine the Outlook and Investment Strategy for China Biotech and CXO

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Genor Biopharma Holdings  / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jhbp-cy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:29201:1" rel="noopener">JHBP (Genor) (6998 HK)</a> received approval in China for its first commercial drug, GB242, a biosimilar to Remicade (infliximab). Approved indications have an addressable patient population of 10 million.</li>
<li>The company is also expected to obtain marketing approval for its drug candidate for the treatment of relapsed and refractory peripheral T-cell lymphoma (PTCL) in China this year.</li>
<li>In-Licensed GB491 (lerociclib) has entered in two phase 3 clinical trials for first and second-line treatments of breast cancer. NDA for GB491 is expected to be filed in 2023.</li>
</ul>



JHBP (Genor) (6998 HK) received approval in China for its first commercial drug, GB242, a biosimilar to Remicade (infliximab). Approved indications have an addressable patient population of 10 million.
The company is also expected to obtain marketing approval for its drug candidate for the treatment of relapsed and refractory peripheral T-cell lymphoma (PTCL) in China this year.
In-Licensed GB491 (lerociclib) has entered in two phase 3 clinical trials for first and second-line treatments of breast cancer. NDA for GB491 is expected to be filed in 2023.


Genor Biopharma (6998 HK): First Product Approved in China; Late-Stage Pipeline Entails Visibility

Jiangsu Hengrui Medicine / Equity Bottom-Up

<ul>
<li>The 2021 report is the worst ever annual report of Hengrui, with double drop in both revenue and net profit.2021Q4 and 2022Q1 are also the worst two quarters so far.</li>
<li>Although Hengrui has invested heavily in R&amp;D and internationalization, it’s still trying to follow an established model with better security.Essentially, Hengrui is still the same Hengrui. Nothing has changed fundamentally. </li>
<li>For now, Hengrui hasn’t released any signal for “a reversal”. If going bottom fishing, investors may have to take a long, uncertain journey with Hengrui. Can you afford to wait?</li>
</ul>


The 2021 report is the worst ever annual report of Hengrui, with double drop in both revenue and net profit.2021Q4 and 2022Q1 are also the worst two quarters so far.
Although Hengrui has invested heavily in R&amp;D and internationalization, it’s still trying to follow an established model with better security.Essentially, Hengrui is still the same Hengrui. Nothing has changed fundamentally. 
For now, Hengrui hasn’t released any signal for “a reversal”. If going bottom fishing, investors may have to take a long, uncertain journey with Hengrui. Can you afford to wait?


Jiangsu Hengrui Medicine (600276.CH) 2021/2022Q1 Results - Can You Afford to Wait?

China

Jiangsu Hengrui Medicine Co., Ltd. develops, manufactures, and markets a variety of medicines and medicine packing materials. The Company's products include anti-tumor medicines, pain-killers, anti-infection medicines, aluminum foil, and other related products.

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Jiangsu Hengrui Medicine (600276 CH)

Shanghai Junshi Bioscience Placement- Junshi Is Having a Hard Time, with Lower than Expected Returns

Junshi's Achilles heel is lack of cash and is in difficult time. PD-1/COVID-19 products can't relieve cashflow pressure.The uncertain outlook/macro...

Xinyao (Criss) Wang

China Healthcare Weekly (May20)-Lockdown Impact on Macro Economy, Bottom Signal? Rare Disease Policy

The lockdown could make economic sense, which is significant for coming economic crisis;We analyzed the bottom signal of biotech/CXO/medical...

Xinyao (Criss) Wang

Re-Examine the Outlook and Investment Strategy for China Biotech and CXO

The investment logic of China biotech has broken due to dilemma of domestic policy and internationalization risk.CXO couldn't sustain high...

Xinyao (Criss) Wang

Genor Biopharma (6998 HK): First Product Approved in China; Late-Stage Pipeline Entails Visibility

Genor obtained marketing approval for its first product in China, one more is expected this year. Commercial execution remains the key near-term...

Tina Banerjee

Jiangsu Hengrui Medicine (600276.CH) 2021/2022Q1 Results - Can You Afford to Wait?

Hengrui's 2021, 2021Q4 and 2022Q1 reports are the worst ever. We updated our views on possible future development trajectory of Hengrui's...

Xinyao (Criss) Wang

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