HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>As the core candidate in Everest Medicines’s current pipeline, the peak sales of Nefecon could be significantly lower-than-expected, mainly due to low diagnostic rate, limited applicable patient population, high price, competition from latecomers.</li>
<li>For the rest late-stage candidates, such as Etrasimod, Eravacycline, Taniborbactam, their peak sales would all be lower than that of Nefecon. So, they are unable to bring enough imagination space.</li>
<li>Based on license-in mode, cost of Everest Medicines is higher than independent-R&amp;D companies. Whether products would be returned to licensors again because of weak sales prospects is also uncertain factor.</li>
</ul>


As the core candidate in Everest Medicines’s current pipeline, the peak sales of Nefecon could be significantly lower-than-expected, mainly due to low diagnostic rate, limited applicable patient population, high price, competition from latecomers.
For the rest late-stage candidates, such as Etrasimod, Eravacycline, Taniborbactam, their peak sales would all be lower than that of Nefecon. So, they are unable to bring enough imagination space.
Based on license-in mode, cost of Everest Medicines is higher than independent-R&amp;D companies. Whether products would be returned to licensors again because of weak sales prospects is also uncertain factor.


Everest Medicines (1952.HK) - To Take off Again or to Fall Instead?

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 14th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the outflows to be USD 538m and highlight flows for Meituan, BYD.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 14th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the outflows to be USD 538m and highlight flows for Meituan, BYD.


Hong Kong Connect Flows (Jul 14th): Meituan, BYD

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 117.2% as of Jul 14th.</li>
<li>The average A-H premium changed by -3.0ppt week on week, led by consumer discretionary, consumer staples, utilities and offset by real estate, communication services.</li>
<li>We highlight weekly changes in A-H premium for BankComm, ICBC, ABC, CCB, Remegen.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 117.2% as of Jul 14th.
The average A-H premium changed by -3.0ppt week on week, led by consumer discretionary, consumer staples, utilities and offset by real estate, communication services.
We highlight weekly changes in A-H premium for BankComm, ICBC, ABC, CCB, Remegen.


A-H Premium Weekly (Jul 14th): 52 Week High A-H for Banks

Equity Capital Markets

<ul>
<li>We don't think A166 makes much sense on the commercialization level when faced with DS-8201. Unsatisfactory sales of Trodelvy also makes us start worrying about SKB264 after its market launch.</li>
<li>MNCs are scrambling to in-license ADC products, which actually reflected their "general anxiety", leading to a "sentiment-driven valuation premium". Would the final outcome of ADC be the same as PD-1?</li>
<li>We’re "confused" about the valuation of Kelun-Biotech if look deeper. The valuation in last round of financing before IPO wasn't cheap, which makes us cautious considering the outlook and sentiment.</li>
</ul>


We don't think A166 makes much sense on the commercialization level when faced with DS-8201. Unsatisfactory sales of Trodelvy also makes us start worrying about SKB264 after its market launch.
MNCs are scrambling to in-license ADC products, which actually reflected their "general anxiety", leading to a "sentiment-driven valuation premium". Would the final outcome of ADC be the same as PD-1?
We’re "confused" about the valuation of Kelun-Biotech if look deeper. The valuation in last round of financing before IPO wasn't cheap, which makes us cautious considering the outlook and sentiment.


Pre-IPO Kelun Biotech (PHIP Updates) - Some Points Worth the Attention

<ul>
<li>Kelun-Biotech raised HKD 1,259m (USD 161m) from its global offering and will list on the Hong Kong Stock Exchange on Tuesday, July 10th.</li>
<li>In our previous note, we looked at the company's business lines of ADC products. We were of the view that the IPO is fairly priced, at best.</li>
<li>In this note, we provide an update for the IPO before trading debut.</li>
</ul>


Kelun-Biotech raised HKD 1,259m (USD 161m) from its global offering and will list on the Hong Kong Stock Exchange on Tuesday, July 10th.
In our previous note, we looked at the company's business lines of ADC products. We were of the view that the IPO is fairly priced, at best.
In this note, we provide an update for the IPO before trading debut.


Kelun-Biotech (科伦博泰) IPO Trading: Lukewarm Demand but Peers Have Done Well Recently

China

RemeGen Co., Ltd. operates biotechnology businesses. The Company develops therapeutic antibody drugs such as antibody drug conjugates (ADC), antibody fusion proteins, monoclonal antibodies and double antibodies. RemeGen provides solutions autoimmune diseases, tumor diseases, and ophthalmic diseases.

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Remegen (9995 HK)

Everest Medicines (1952.HK) - To Take off Again or to Fall Instead?

Great personnel changes had taken place in Everest Medicines. However, peak sales of core products could be significantly lower than expected. So,...

Xinyao (Criss) Wang

Hong Kong Connect Flows (Jul 14th): Meituan, BYD

We analyzed the Hong Kong Connect Scheme for last week. We estimate the outflows to be USD 38m and highlight flows for Meituan and BYD.

Ke Yan, CFA, FRM

A-H Premium Weekly (Jul 14th): 52 Week High A-H for Banks

We analyzed A-H premium changes in the past week and highlight A-H premium changes for BankComm, ICBC, ABC, CCB, Remegen.

Ke Yan, CFA, FRM

Pre-IPO Kelun Biotech (PHIP Updates) - Some Points Worth the Attention

Currently, Kelun-Biotech's market value has already been higher than that of Keymed. Considering Keymed has complete R&D team within the company,...

Xinyao (Criss) Wang

Kelun-Biotech (科伦博泰) IPO Trading: Lukewarm Demand but Peers Have Done Well Recently

Kelun Biotech will start trading on July 11th. We provide an update of the IPO before its debut. We think the deal attracted lukewarm demand but...

Ke Yan, CFA, FRM

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