HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>We saw the collapse of Akeso's share price after the Company released the clinical data of AK112 on ASCO. Judging from the market reaction, there are indeed“something unsatisfactory” about AK112.</li>
<li>Akeso’s high valuation mainly comes from the expectation that it would be a player that can compete on international stage. But investors' confidence in AK112’s future commercialization has been shaken.</li>
<li>We advise investors to remain patient and "let the bullets fly". It's not yet time for the final result.But, if you want to bet, you need to pay the price.</li>
</ul>


We saw the collapse of Akeso's share price after the Company released the clinical data of AK112 on ASCO. Judging from the market reaction, there are indeed“something unsatisfactory” about AK112.
Akeso’s high valuation mainly comes from the expectation that it would be a player that can compete on international stage. But investors' confidence in AK112’s future commercialization has been shaken.
We advise investors to remain patient and "let the bullets fly". It's not yet time for the final result.But, if you want to bet, you need to pay the price.


Akeso Biopharma (9926.HK) - It's Not Game over Yet

Sichuan Kelun-Biotech Biopharm / Equity Bottom-Up

<ul>
<li>Since IPO, stock price of Kelun-Biotech has performed quite well. Then, the Company's valuation fluctuated. Investors seem not excited about <a href="https://www.smartkarma.com/entities/sichuan-kelun-biotech-biopharm" target="_blank" data-smartkarma-citation="entities:40071:1" rel="noopener">Sichuan Kelun-Biotech Biopharm (6990 HK)</a>’s 23H1 performance.</li>
<li>We won’t expect too much on A166 in such a difficult competitive landscape.Commercialization of SKB264 is also challenging.It's difficult to make up the story after A166/SKB264 begin to generate revenue.</li>
<li>After out-licensing all valuable/core assets to Merck, together with the departure of core R&amp;D personnel, Kelun-Biotech has been “hollowed out”.So, Kelun-Biotech's value lies in short-term trade rather than long-term hold.</li>
</ul>


Since IPO, stock price of Kelun-Biotech has performed quite well. Then, the Company's valuation fluctuated. Investors seem not excited about Sichuan Kelun-Biotech Biopharm (6990 HK)’s 23H1 performance.
We won’t expect too much on A166 in such a difficult competitive landscape.Commercialization of SKB264 is also challenging.It's difficult to make up the story after A166/SKB264 begin to generate revenue.
After out-licensing all valuable/core assets to Merck, together with the departure of core R&amp;D personnel, Kelun-Biotech has been “hollowed out”.So, Kelun-Biotech's value lies in short-term trade rather than long-term hold.


Sichuan Kelun-Biotech Biopharm (6990.HK) - Once the Products Hit the Market, Good Story May Stop

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Kelun-Biotech recorded RMB1.54bn revenue in FY23, primarily from licensing and collaboration agreements with MSD.</li><li>In Mar 2023, SKB received around RMB1.21bn upfront payment from MSD for out-licensing certain pre-clinical ADC assets, a portion of which was recognized in FY23.</li><li>Additionally, Kelun-Biotech received RMB215mn milestone payment from MSD related to SKB264 in 4Q23. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kelun-Biotech recorded RMB1.54bn revenue in FY23, primarily from licensing and collaboration agreements with MSD.In Mar 2023, SKB received around RMB1.21bn upfront payment from MSD for out-licensing certain pre-clinical ADC assets, a portion of which was recognized in FY23.Additionally, Kelun-Biotech received RMB215mn milestone payment from MSD related to SKB264 in 4Q23. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kelun-Biotech (6990 HK) - Intense Data Release to Further Validate the Global Potential of SKB264

<ul><li>MSD has announced three additional global Ph3 trials of SKB264. MSD is vigorously advancing the global clinical development of its prominent oncology asset, SKB264, through multiple global Ph3 trials. In late 2023, MSD launched three global Ph3 trials: 1) a Ph3 MRCT of SKB264 in 3L nsq-NSCLC with EGFR mutations or other genomic alterations (NCT06074588), 2) a Ph3 trial of SKB264+Keytruda vs Keytruda mono in 1L PD-L1 TPS ≥ 50% NSCLC (NCT06170788), and 3) a Ph3 trial of SKB264 in post chemo and/or PD(L)-1 endometrial carcinoma (NCT06132958).</li><li>Additionally, MSD has initiated three more trials, expanding the scope of SKB264's evaluation to include 1) 2L post TKI EGFRm nsq-NSCLC (NCT06305754), 2) adjuvant NSCLC (NCT06312137), and 3) 2L+ HR+/HER2- BC (NCT06312176).</li><li>These studies encompass a wide range of NSCLC stages and further probe SKB264's utility in breast and endometrial cancers, highlighting its global market potential.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

MSD has announced three additional global Ph3 trials of SKB264. MSD is vigorously advancing the global clinical development of its prominent oncology asset, SKB264, through multiple global Ph3 trials. In late 2023, MSD launched three global Ph3 trials: 1) a Ph3 MRCT of SKB264 in 3L nsq-NSCLC with EGFR mutations or other genomic alterations (NCT06074588), 2) a Ph3 trial of SKB264+Keytruda vs Keytruda mono in 1L PD-L1 TPS ≥ 50% NSCLC (NCT06170788), and 3) a Ph3 trial of SKB264 in post chemo and/or PD(L)-1 endometrial carcinoma (NCT06132958).Additionally, MSD has initiated three more trials, expanding the scope of SKB264's evaluation to include 1) 2L post TKI EGFRm nsq-NSCLC (NCT06305754), 2) adjuvant NSCLC (NCT06312137), and 3) 2L+ HR+/HER2- BC (NCT06312176).These studies encompass a wide range of NSCLC stages and further probe SKB264's utility in breast and endometrial cancers, highlighting its global market potential.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kelun-Biotech (6990 HK) - MSD Has Further Expedited Global Clinical Development of SKB264

Thematic (Sector/Industry)

<ul>
<li>A document titled "Soliciting Opinions on the Implementation Plan for Supporting the Development of Innovative Drugs throughout the Whole Chain" attracted widespread attention, which is significantly different from past policies. </li>
<li>Restrictions on payment end and deteriorating investment and financing situations will be improved, marking a new starting point for China’s innovative drug business. We have reasons to start being optimistic.</li>
<li>If approved and implemented, it would be a significant reversal of the previous expectation and investment logic of innovative drugs. So, investors should not overlook the importance of this document.</li>
</ul>


A document titled "Soliciting Opinions on the Implementation Plan for Supporting the Development of Innovative Drugs throughout the Whole Chain" attracted widespread attention, which is significantly different from past policies. 
Restrictions on payment end and deteriorating investment and financing situations will be improved, marking a new starting point for China’s innovative drug business. We have reasons to start being optimistic.
If approved and implemented, it would be a significant reversal of the previous expectation and investment logic of innovative drugs. So, investors should not overlook the importance of this document.


Important New Policy for China’s Innovative Drugs – The Game Rule Is About to Change Radically

China

Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. operates biotechnology businesses. The Company develops and provides biological drugs, chemical raw materials, antibody conjugating drugs, innovative drugs, and other products. Kelun Biotech also operates import and export businesses.

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Sichuan Kelun-Biotech Biopharm (6990 HK)

Akeso Biopharma (9926.HK) - It's Not Game over Yet

Akeso's share price plunged after unsatisfactory clinical data release for AK112 at ASCO, raising doubts about international...

Xinyao (Criss) Wang