HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

Chongqing Taiji Industry (Group) A / Event-Driven

<ul>
<li>There are several ways for pharmaceutical companies to commercialize drugs. We analyzed the advantages and disadvantages and ranked them accordingly. Among them, out-licensing early-stage pipelines is the worst choice.</li>
<li>After 5-6 years of commercialization, China Biotech have reached the critical point of verifying the feasibility of business models. However, some companies are falling behind. We listed them below.</li>
<li>After the failure of China TCM’s privatization, CNPGC can choose to launch another privatization after 12 months. There’re also other methods to address the horizontal competition issue with Taiji Group.</li>
</ul>


There are several ways for pharmaceutical companies to commercialize drugs. We analyzed the advantages and disadvantages and ranked them accordingly. Among them, out-licensing early-stage pipelines is the worst choice.
After 5-6 years of commercialization, China Biotech have reached the critical point of verifying the feasibility of business models. However, some companies are falling behind. We listed them below.
After the failure of China TCM’s privatization, CNPGC can choose to launch another privatization after 12 months. There’re also other methods to address the horizontal competition issue with Taiji Group.


China Healthcare Weekly (Nov.10)-Biotech Model Validation, CNPGC Need to Fulfill Commitment to Taiji

Thematic (Sector/Industry)

<ul>
<li>The assassination of Trump in July has greatly increased the probability of his election as president this year. However, a Trump presidency is not necessarily good for healthcare industry.</li>
<li>Trump's reform in the field of healthcare has two major propositions - One is to achieve the independence of US pharmaceutical supply chain. The other is to reduce drug prices.</li>
<li>From a US national security perspective, China's APIs/CXO would be the segments with the highest sanction risk. China Biotech may also face some headwinds. The risk of "decoupling" further increases.</li>
</ul>


The assassination of Trump in July has greatly increased the probability of his election as president this year. However, a Trump presidency is not necessarily good for healthcare industry.
Trump's reform in the field of healthcare has two major propositions - One is to achieve the independence of US pharmaceutical supply chain. The other is to reduce drug prices.
From a US national security perspective, China's APIs/CXO would be the segments with the highest sanction risk. China Biotech may also face some headwinds. The risk of "decoupling" further increases.


What Does a Trump Presidency Mean for China Healthcare?

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics (207940 KS)</a> signed a contract manufacturing agreement worth KRW1.7T ($1.2B) with an Asian pharmaceutical company. <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> has announced KRW100B ($72M) share buyback, starting October 28.</li>
<li>
<a href="https://www.smartkarma.com/entities/astellas-pharma-inc" target="_blank" data-smartkarma-citation="entities:6091:1" rel="noopener">Astellas Pharma (4503 JP)</a> received FDA approval for Vyloy for gastric cancer. <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi &amp; Co (4507 JP)</a> received FDA Fast Track designation for its RSV drug candidate, S-337395.</li>
<li>
<a href="https://www.smartkarma.com/entities/zai-lab-ltd-94df40cf-c15e-462f-b3de-8d2d434ae935" target="_blank" data-smartkarma-citation="entities:36261:1" rel="noopener">Zai Lab (9688 HK)</a> announced positive topline data from global Phase 1a/1b study of ZL-1310 in small cell lung cancer. <a href="https://www.smartkarma.com/entities/legend-biotech-corp" target="_blank" data-smartkarma-citation="entities:28963:1" rel="noopener">Legend Biotech Corp (LEGN US)</a> sheds Genscript Biotech as its majority shareholder.</li>
</ul>



Samsung Biologics (207940 KS) signed a contract manufacturing agreement worth KRW1.7T ($1.2B) with an Asian pharmaceutical company. Celltrion Inc (068270 KS) has announced KRW100B ($72M) share buyback, starting October 28.

Astellas Pharma (4503 JP) received FDA approval for Vyloy for gastric cancer. Shionogi &amp; Co (4507 JP) received FDA Fast Track designation for its RSV drug candidate, S-337395.

Zai Lab (9688 HK) announced positive topline data from global Phase 1a/1b study of ZL-1310 in small cell lung cancer. Legend Biotech Corp (LEGN US) sheds Genscript Biotech as its majority shareholder.


APAC Healthcare Weekly (Oct 27)- Samsung Biologics, Celltrion, Astellas, Otsuka, Legend, and Zai Lab

China Traditional Chinese Medicine / Event-Driven

<ul>
<li>The “industry clearing”  of innovative drug companies is far longer and more brutal than imagined. But Chinese innovative drug ecosystem will ultimately usher in a better innovation pattern in the future.</li>
<li>For every innovative pharmaceutical company with ambitious goals, globalization is a “must option”. With more and more Chinese biotech achieving success, the internationalization prospects will become better and better.</li>
<li>China TCM’s privatization failure made us realize large SOEs we always believe in would violate their commitments to market/investors.Now, we need to get back to the fundamentals to minimize losses.</li>
</ul>


The “industry clearing”  of innovative drug companies is far longer and more brutal than imagined. But Chinese innovative drug ecosystem will ultimately usher in a better innovation pattern in the future.
For every innovative pharmaceutical company with ambitious goals, globalization is a “must option”. With more and more Chinese biotech achieving success, the internationalization prospects will become better and better.
China TCM’s privatization failure made us realize large SOEs we always believe in would violate their commitments to market/investors.Now, we need to get back to the fundamentals to minimize losses.


China Healthcare Weekly (Oct.20)-A Big Lesson from China TCM's Deal Break, “Must Option” of Biotech

<ul>
<li>We do not want to make a premature conclusion about this acquisition too early. For both Legend Bio and Genscript, this acquisition is worth considering, given the geopolitical risks.</li>
<li>There could be difference in expectations between buyers and sellers regarding the acquisition price. For fear of losing their jobs, Legend Bio's management may not be happy about being acquired.</li>
<li>Considering the high uncertainty, our suggestion is that investors spend more time on the fundamentals of Legend Bio, rather than just betting on the success of the acquisition.</li>
</ul>


We do not want to make a premature conclusion about this acquisition too early. For both Legend Bio and Genscript, this acquisition is worth considering, given the geopolitical risks.
There could be difference in expectations between buyers and sellers regarding the acquisition price. For fear of losing their jobs, Legend Bio's management may not be happy about being acquired.
Considering the high uncertainty, our suggestion is that investors spend more time on the fundamentals of Legend Bio, rather than just betting on the success of the acquisition.


Legend Biotech (LEGN.US) Offer Update - Is the Deal Really Dead?

China

Legend Biotech Corporation operates as a biopharmaceutical company. The Company engages in discovery and development of novel cell therapies for oncology and other indications. Legend Biotech serves customers in the State of New Jersey.

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Legend Biotech Corp (LEGN US)

China Healthcare Weekly (Nov.10)-Biotech Model Validation, CNPGC Need to Fulfill Commitment to Taiji

Out-licensing early-stage pipelines is the worst option. China Biotech at a critical point in verifying business models. CNPGC has other methods to...

Xinyao (Criss) Wang

What Does a Trump Presidency Mean for China Healthcare?

Trump successfully elected as the US President. His reform in healthcare is to achieve the independence of US pharmaceutical supply chain and...

Xinyao (Criss) Wang

APAC Healthcare Weekly (Oct 27)- Samsung Biologics, Celltrion, Astellas, Otsuka, Legend, and Zai Lab

Samsung Biologics secures largest ever contract, Celltrion announced KRW100B buyback, Astellas Pharma got label expansion approval for Vyloy,...

Tina Banerjee

China Healthcare Weekly (Oct.20)-A Big Lesson from China TCM's Deal Break, “Must Option” of Biotech

The break of China TCM’s privatization deal has taught us an important lesson.Globalization is a “must option”. The “industry clearing” of...

Xinyao (Criss) Wang

Legend Biotech (LEGN.US) Offer Update - Is the Deal Really Dead?

Given the geopolitical risks, this acquisition is worth considering for both Legend Bio and Genscript. However, the main obstacles are disagreement...

Xinyao (Criss) Wang

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