Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Equity Capital Markets

CARsgen Therapeutics / Equity Capital Markets

Carsgen is a China and US-based clinical stage biopharmaceutical company focused on CAR-T therapies. The company has four CAR-T products and one monoclonal antibody in the clinical stage.  The company is looking to raise up to USD 300m via a Hong Kong listing.The company has many selling points, including the potentially best-in-class BCMA target for the indication of r/r MM, and its advancement in two targets for the CAR-T therapy, namely CLDN18.2 and GPC3. It has its own technologies that improved the safety for CAR-T technology and also demonstrated preliminary efficacy in the solid tumor which was challenging for the CAR-T therapy. Having looked at numbers from its clinical trials for CT053, we are of the view that this is a promising therapy for r/r MM but the market will be mostly in the US where the company has started clinical trial. As the company is leading in the CLDN18.2 and GPC3, there might be upside if the target is proven to work for CAR-T therapy. The company has a strong management team with academic experiences. Its pre-IPO investors are strong but are mainly domestic institutions. In this note, we will provide our thoughts on the company's valuation.

Carsgen is a China and US-based clinical stage biopharmaceutical company focused on CAR-T therapies. The company has four CAR-T products and one monoclonal antibody in the clinical stage.  The company is looking to raise up to USD 300m via a Hong Kong listing.The company has many selling points, including the potentially best-in-class BCMA target for the indication of r/r MM, and its advancement in two targets for the CAR-T therapy, namely CLDN18.2 and GPC3. It has its own technologies that improved the safety for CAR-T technology and also demonstrated preliminary efficacy in the solid tumor which was challenging for the CAR-T therapy. Having looked at numbers from its clinical trials for CT053, we are of the view that this is a promising therapy for r/r MM but the market will be mostly in the US where the company has started clinical trial. As the company is leading in the CLDN18.2 and GPC3, there might be upside if the target is proven to work for CAR-T therapy. The company has a strong management team with academic experiences. Its pre-IPO investors are strong but are mainly domestic institutions. In this note, we will provide our thoughts on the company's valuation.

CARsgen (科济药业) Pre-IPO: Thoughts on Valuation

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

The new IPO regulations of the HKEX accelerate the listing of many unprofitable domestic biopharmaceutical companies, which help them to raise funds for the clinical progress and R&amp;D. At the same time, these companies also hope to seize the huge unmet medical market with the advantage of taking the first step. Among them, there are companies focusing on the CAR-T therapy. For example, on February 26, 2021, according to the disclosure of the HKEX, <a href="https://www.smartkarma.com/entities/carsgen-therapeutics-ltd" target="_blank" data-smartkarma-citation="entities:32213:1" rel="noopener">CARSgen Therapeutics (1186504D CH)</a> submitted the application for listing. The following mainly analyzed the Company’s major product candidates and the concerns.

The new IPO regulations of the HKEX accelerate the listing of many unprofitable domestic biopharmaceutical companies, which help them to raise funds for the clinical progress and R&amp;D. At the same time, these companies also hope to seize the huge unmet medical market with the advantage of taking the first step. Among them, there are companies focusing on the CAR-T therapy. For example, on February 26, 2021, according to the disclosure of the HKEX, CARSgen Therapeutics (1186504D CH) submitted the application for listing. The following mainly analyzed the Company’s major product candidates and the concerns.

Pre-IPO CARsgen Therapeutics - Insights on Pipeline and Challenges

Carsgen is a China and US-based clinical-stage biopharmaceutical company focused on CAR-T therapies. The company has four CAR-T products and one monoclonal antibody in the clinical stage.  The company is looking to raise up to USD 300m via a Hong Kong listing.The company has many selling points, including the potentially best-in-class BCMA target for the indication of r/r MM, and its advancement in two targets for the CAR-T therapy, namely CLDN18.2 and GPC3. It has its own technologies that improved the safety for CAR-T technology and also demonstrated preliminary efficacy in the solid tumor which was challenging for the CAR-T therapy. Having looked at numbers from its clinical trials for CT053, we are of the view that this is a promising therapy for r/r MM but the market will be mostly in the US where the company has started clinical trial. As the company is leading in the CLDN18.2 and GPC3, there might be upside if the target is proven to work for CAR-T therapy.The company has a strong management team with academic experiences. Its pre-IPO investors are strong but are mainly domestic institutions.

Carsgen is a China and US-based clinical-stage biopharmaceutical company focused on CAR-T therapies. The company has four CAR-T products and one monoclonal antibody in the clinical stage.  The company is looking to raise up to USD 300m via a Hong Kong listing.The company has many selling points, including the potentially best-in-class BCMA target for the indication of r/r MM, and its advancement in two targets for the CAR-T therapy, namely CLDN18.2 and GPC3. It has its own technologies that improved the safety for CAR-T technology and also demonstrated preliminary efficacy in the solid tumor which was challenging for the CAR-T therapy. Having looked at numbers from its clinical trials for CT053, we are of the view that this is a promising therapy for r/r MM but the market will be mostly in the US where the company has started clinical trial. As the company is leading in the CLDN18.2 and GPC3, there might be upside if the target is proven to work for CAR-T therapy.The company has a strong management team with academic experiences. Its pre-IPO investors are strong but are mainly domestic institutions. 

CARsgen (科济药业) Pre-IPO: Scientific Bet on New CAR-T Targets

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

BeiGene has outlicensed ex-China rights to its PD-1 tislelizumab to Novartis on favorable terms, validating the competitive position of this compound in a crowded market. Further, the agreement marks a growing trend of Chinese companies outlicensing products to multinationals, which can have a leveraged benefit on their P&amp;Ls and valuations.

BeiGene has outlicensed ex-China rights to its PD-1 tislelizumab to Novartis on favorable terms, validating the competitive position of this compound in a crowded market. Further, the agreement marks a growing trend of Chinese companies outlicensing products to multinationals, which can have a leveraged benefit on their P&amp;Ls and valuations.

BeiGene: Novartis Grabs Tislelizumab Rights

China

JW Therapeutics is a clinical-stage cell therapy company focused on developing, manufacturing, and commercializing breakthrough cell-based immunotherapies for hematological cancers and solid tumors. Its lead product is Carteyva (relmacabtagene autoleucel), an autologous anti-CD19 CAR-T therapy. The company is headquartered in Shanghai, China, and was founded in 2016.

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JW Therapeutics (2126 HK)

CARsgen (科济药业) Pre-IPO: Thoughts on Valuation

In this insight, we provide a risk-adjusted NPV based valuation for the company's key product CT035 and the SOTP valuation for the company.

Ke Yan, CFA, FRM

Pre-IPO CARsgen Therapeutics - Insights on Pipeline and Challenges

This article mainly analyzed CARsgen in terms of key product candidates in the pipeline, competitive landscape, challenges, financial position and...

Xinyao (Criss) Wang

CARsgen (科济药业) Pre-IPO: Scientific Bet on New CAR-T Targets

CT053 is a promising CAR-T therapy for r/r MM but the market will be mostly in the US where the company has started clinical trial. Upside could...

Ke Yan, CFA, FRM

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

There are 36 inclusions/ 29 exclusions for the Hang Seng Composite Index. 9 stocks will be deleted from the Stock Connect Buy list & there are a...

Brian Freitas

BeiGene: Novartis Grabs Tislelizumab Rights

BeiGene's deal with Novartis for PD-1 tislelizumab validates its competitive position, and marks a rising trend of Chinese companies licensing...

Kemp Dolliver, CFA

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