HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Since China planned to pilot registration-based IPO system, more and more eligible unprofitable biotech companies are allowed to go public. <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a> would be the next one. The Company is going to list on the STAR market. Founded in Beijing in 2010, BeiGene is the most representative of the early biotech companies, and it has become a giant now, with a market value of about HK$254 billion on February 1, or less than half of that of <a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH) </a>(around RMB550 billion). Meanwhile, different from Hengrui’s strategy, which adheres more to the independent R&amp;D and control of core technology and related rights, BeiGene is better at capital operation - Most of the products in pipeline are from license-in mode, and the Company is continuously suffering from losses. So, would the IPO on the STAR market be the last hurrah?

Since China planned to pilot registration-based IPO system, more and more eligible unprofitable biotech companies are allowed to go public. BeiGene Ltd (6160 HK) would be the next one. The Company is going to list on the STAR market. Founded in Beijing in 2010, BeiGene is the most representative of the early biotech companies, and it has become a giant now, with a market value of about HK$254 billion on February 1, or less than half of that of Jiangsu Hengrui Medicine (600276 CH) (around RMB550 billion). Meanwhile, different from Hengrui’s strategy, which adheres more to the independent R&amp;D and control of core technology and related rights, BeiGene is better at capital operation - Most of the products in pipeline are from license-in mode, and the Company is continuously suffering from losses. So, would the IPO on the STAR market be the last hurrah?

Pre-IPO BeiGene - Would the IPO on the STAR Market Be the Last Hurrah?

Thematic (Sector/Industry)

1. Industry viewpoints:<ul>
<li>It is expected that the market size of IBD (Inflammatory Bowel Disease) drug therapy in China would keep growing in the next five years.</li>
<li>Since COVID-19 virus was detected in imported reagents this time, considering safety factors, the trend of import substitution for reagent varieties is expected to accelerate.</li>
<li>In the field of high-end antibiotics, Chinese enterprises have yet to make breakthroughs.</li>
</ul>2. Company news:News about the progress of new drugs from <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a>, <a href="https://www.smartkarma.com/entities/harbour-biomed-holdings-limited" target="_blank" data-smartkarma-citation="entities:29717:1" rel="noopener">Harbour Biomed (2142 HK)</a>, <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a> and <a href="https://www.smartkarma.com/entities/shanghai-junshi-bioscience-h" target="_blank" data-smartkarma-citation="entities:27760:1" rel="noopener">Shanghai Junshi Bioscience Co. Ltd. (1877 HK)</a>.3. Market review:Last week, stock price for healthcare sector in A share decreased 7.1%, while CSI 300 decreased 3.91% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints:
It is expected that the market size of IBD (Inflammatory Bowel Disease) drug therapy in China would keep growing in the next five years.
Since COVID-19 virus was detected in imported reagents this time, considering safety factors, the trend of import substitution for reagent varieties is expected to accelerate.
In the field of high-end antibiotics, Chinese enterprises have yet to make breakthroughs.
2. Company news:News about the progress of new drugs from BeiGene Ltd (6160 HK), Harbour Biomed (2142 HK), Antengene (6996 HK) and Shanghai Junshi Bioscience Co. Ltd. (1877 HK).3. Market review:Last week, stock price for healthcare sector in A share decreased 7.1%, while CSI 300 decreased 3.91% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

We spend a substantial portion of our time thinking about oncology in China: one of the largest unmet needs in healthcare globally. The World Health Organization estimates that there are 4.3 million new cases and 2.9 million deaths annually. Historically, treatment options have been limited compared to the US, EU, and many of China’s neighbors. Fortunately, the government has implemented several reforms in recent years to accelerate development and importation of innovative treatments and to provide reimbursement for them. This Insight includes names to consider for two approaches to invest in this opportunity:1) Invest in the leading multi-asset oncology companies.2) Invest in a basket of companies with narrower oncology offerings.

We spend a substantial portion of our time thinking about oncology in China: one of the largest unmet needs in healthcare globally. The World Health Organization estimates that there are 4.3 million new cases and 2.9 million deaths annually. Historically, treatment options have been limited compared to the US, EU, and many of China’s neighbors. Fortunately, the government has implemented several reforms in recent years to accelerate development and importation of innovative treatments and to provide reimbursement for them. This Insight includes names to consider for two approaches to invest in this opportunity:1) Invest in the leading multi-asset oncology companies.2) Invest in a basket of companies with narrower oncology offerings.

BeiGene: Cancer Treatment in China--The Underestimated Opportunity

Bio-Thera Solutions Ltd / Equity Capital Markets

In February 2020, <a href="https://www.smartkarma.com/entities/bio-thera-solutions-ltd" target="_blank" data-smartkarma-citation="entities:29127:1" rel="noopener">Bio-Thera Solutions Ltd (688177 CH)</a> completed its listing on the SSE STAR Market. Then in 2020/2H, Bio-Thera planned to list on the Hong Kong Stock Exchange, becoming another biopharmaceutical company with "A+H" listing. Currently the Company’s market value was about RMB13.5 billion. So how about this company? The following provides the insights on its pipeline and related competitive landscape.

In February 2020, Bio-Thera Solutions Ltd (688177 CH) completed its listing on the SSE STAR Market. Then in 2020/2H, Bio-Thera planned to list on the Hong Kong Stock Exchange, becoming another biopharmaceutical company with "A+H" listing. Currently the Company’s market value was about RMB13.5 billion. So how about this company? The following provides the insights on its pipeline and related competitive landscape. 

Pre-IPO Bio-Thera Solutions - Insights on Pipeline and the Competitive Landscape

On December 28th 2020, the National Healthcare Security Administration (NHSA) announced the results of 2020 medical insurance negotiations. The new medical insurance catalogue will be officially implemented on March 1st, 2021. It totally contains 2,800 types of drugs, including 1,426 types of western medicine and 1,374 types of proprietary Chinese medicine. A total of 162 drugs were negotiated this time, 119 of which successfully won the bidding, with a success rate of 73.46% and an average price reduction of 50.64%. The list of the 119 drugs is on the final page.

On December 28th 2020, the National Healthcare Security Administration (NHSA) announced the results of 2020 medical insurance negotiations. The new medical insurance catalogue will be officially implemented on March 1st, 2021. It totally contains 2,800 types of drugs, including 1,426 types of western medicine and 1,374 types of proprietary Chinese medicine. A total of 162 drugs were negotiated this time, 119 of which successfully won the bidding, with a success rate of 73.46% and an average price reduction of 50.64%. The list of the 119 drugs is on the final page.

China Healthcare Policy Update - The Official Results of 2020 Medical Insurance Negotiations

China

Shanghai Junshi Biosciences Co., Ltd. operates as a biopharmaceutical company. The Company develops and sells small molecule drugs, antibody drug conjugates, and other products. Shanghai Junshi Biosciences markets its products worldwide.

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Shanghai Junshi Biosciences (1877 HK)

Pre-IPO BeiGene - Would the IPO on the STAR Market Be the Last Hurrah?

This article analyzed BeiGene in terms of its current pipeline, products on the market, competitive landscape, financial position, and the concerns...

Xinyao (Criss) Wang

China Healthcare Weekly (Jan.29)

The article analyzed industry viewpoints in terms of IBD drug therapy, import substitution for reagent varieties and high-end antibiotics market,...

Xinyao (Criss) Wang

BeiGene: Cancer Treatment in China--The Underestimated Opportunity

We think that cancer is underdiagnosed and undertreated in China. We analyze the data and propose two approaches for investing in this theme.

Kemp Dolliver, CFA

Pre-IPO Bio-Thera Solutions - Insights on Pipeline and the Competitive Landscape

This article summarized the insights on major products of Bio-Thera Solutions in the pipeline and related competitive landscape with other key...

Xinyao (Criss) Wang

China Healthcare Policy Update - The Official Results of 2020 Medical Insurance Negotiations

The article analyzed the results of 2020 medical insurance negotiations with the list of drugs that won the bidding. If interested in China...

Xinyao (Criss) Wang

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