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

IMPACT Therapeutics / Equity Capital Markets

<ul>
<li>Impact Therapeutics, a China-based near-commercial-stage biopharma company, is looking to raise at least USD 100 million via a Hong Kong listing. GS and CICC are the joint sponsors.</li>
<li>In our previous note, we looked at the company’s core products, senaparib/IMP4297, and key products IMP1734 and IMP9064. We also looked at the company’s pre-IPO investors and management team.</li>
<li>In this note, we look at the latest prospectus and analyze changes in the company's pipeline and competitive landscapes.</li>
</ul>


Impact Therapeutics, a China-based near-commercial-stage biopharma company, is looking to raise at least USD 100 million via a Hong Kong listing. GS and CICC are the joint sponsors.
In our previous note, we looked at the company’s core products, senaparib/IMP4297, and key products IMP1734 and IMP9064. We also looked at the company’s pre-IPO investors and management team.
In this note, we look at the latest prospectus and analyze changes in the company's pipeline and competitive landscapes.


Impact Therapeutics (英派药业) Pre-IPO: Post Senaparib Commercialization, What's Next?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Betta Pharmaceuticals / Equity Capital Markets

<ul>
<li>Betta is facing difficulties. Old products have a decline in sales due to competition, while the new products have been struggling to break through, failing to contribute expected revenue scale.</li>
<li>The loss of core talent would have negative impact on Betta’s development, which would be gradually revealed in the future in terms of R&amp;D capability/product iteration/capital operation/licensing cooperation.</li>
<li>Valuation of Betta would be lower than peers, as these companies have relatively diversified pipelines, and have already reached high-quality licensing cooperation with MNCs, demonstrating optimistic internationalization outlook.  </li>
</ul>


Betta is facing difficulties. Old products have a decline in sales due to competition, while the new products have been struggling to break through, failing to contribute expected revenue scale.
The loss of core talent would have negative impact on Betta’s development, which would be gradually revealed in the future in terms of R&amp;D capability/product iteration/capital operation/licensing cooperation.
Valuation of Betta would be lower than peers, as these companies have relatively diversified pipelines, and have already reached high-quality licensing cooperation with MNCs, demonstrating optimistic internationalization outlook.  


Pre-IPO Betta Pharmaceuticals (A/H Listing) - Thoughts on the Pipeline, the Outlook, and Valuation

<ul>
<li>Senaparib demonstrated statistically significant and clinically meaningful improvement in PFS in Phase III trial, which is its core competitiveness, but Senaparib is facing challenges in commercialization due to fierce competition.</li>
<li>The potential of IMP1734/IMP9064/IMP7068/IMP1707 depends on clinical success, the approval schedule, final indications layout. In optimistic scenario, a blockbuster drug has the potential to reach peak sales of RMB1-2 billion.</li>
<li>RMB1-2.25 billion could be valuation bottom line, which is below the post-money valuation of RMB3.3 billion after Series D++ Financing. Meanwhile, valuation of IMPACT would be lower than Zai Lab.</li>
</ul>


Senaparib demonstrated statistically significant and clinically meaningful improvement in PFS in Phase III trial, which is its core competitiveness, but Senaparib is facing challenges in commercialization due to fierce competition.
The potential of IMP1734/IMP9064/IMP7068/IMP1707 depends on clinical success, the approval schedule, final indications layout. In optimistic scenario, a blockbuster drug has the potential to reach peak sales of RMB1-2 billion.
RMB1-2.25 billion could be valuation bottom line, which is below the post-money valuation of RMB3.3 billion after Series D++ Financing. Meanwhile, valuation of IMPACT would be lower than Zai Lab.


Pre-IPO IMPACT Therapeutics - Thoughts on the Pipeline, the Concerns and Valuation Outlook

Equity Bottom-Up

Ping An Healthcare and Technology / Equity Bottom-Up

Ping An Healthcare and Technology (1833 HK)

<ul>
<li>The “turning point” occurs as share price of innovative drug sector is pulling back. Many companies would see valuations halved - potentially more than once.The decline is far from over.</li>
<li>The current main goal of biotech is to turn losses into profits ASAP. If it fails to make a profit, it may not be recognized by the market.</li>
<li>Due to the concerns on <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology (1833 HK)'s </a>business model, peak revenue scale could be just RMB8 billion. In other words, Ping An Healthcare is overvalued.</li>
</ul>


The “turning point” occurs as share price of innovative drug sector is pulling back. Many companies would see valuations halved - potentially more than once.The decline is far from over.
The current main goal of biotech is to turn losses into profits ASAP. If it fails to make a profit, it may not be recognized by the market.
Due to the concerns on Ping An Healthcare and Technology (1833 HK)'s business model, peak revenue scale could be just RMB8 billion. In other words, Ping An Healthcare is overvalued.


China Healthcare Weekly (Oct.19)-Bubble of HK Biotech Is Bursting, Ping An Good Doctor Is Overvalued

TenNor Therapeutics (Suzhou) Limited / Equity Capital Markets

TenNor Therapeutics (Suzhou) Limited (TEN123 HK)

<ul>
<li>China has vigorously restricted the use of antibiotics. Even for novel antibiotics, they won’t replace old antibiotics completely considering higher price/the difficulty of changing prescription habits of existing clinical guidelines.</li>
<li>The NMPA's approval standards for new antibiotics are becoming increasingly strict. So, regulatory agencies' evaluation of the true efficacy of TNP-2198 may lead to the delay in its market launch. </li>
<li>Post-Money valuation after Series E financing reached RMB2 billion. Valuation of TenNor could be lower than peers Zai Lab and Everest Medicines who already have commercialized products on the market.</li>
</ul>


China has vigorously restricted the use of antibiotics. Even for novel antibiotics, they won’t replace old antibiotics completely considering higher price/the difficulty of changing prescription habits of existing clinical guidelines.
The NMPA's approval standards for new antibiotics are becoming increasingly strict. So, regulatory agencies' evaluation of the true efficacy of TNP-2198 may lead to the delay in its market launch. 
Post-Money valuation after Series E financing reached RMB2 billion. Valuation of TenNor could be lower than peers Zai Lab and Everest Medicines who already have commercialized products on the market.


Pre-IPO TenNor Therapeutics (Suzhou) Limited - The Pipelines and the Concerns

China

Zai Lab is an innovative, research-based, commercial-stage biopharmaceutical company focused on discovering, developing, and commercializing innovative products for oncology, immunology, neuroscience, and infectious diseases. The company has commercialized products such as Zejula, Optune, Qinlock, Nuzyra, and Vyvgart in China. Zai Lab was founded in 2014 and is headquartered in Shanghai, China, and Cambridge, Massachusetts, USA.

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Zai Lab (9688 HK)

Impact Therapeutics (英派药业) Pre-IPO: Post Senaparib Commercialization, What's Next?

Impact Therapeutics PHIP updates: advances senaparib to NRDL reimbursement. IMP1734 readout later this year is the single event that determines...

Ke Yan, CFA, FRM

Pre-IPO Betta Pharmaceuticals (A/H Listing) - Thoughts on the Pipeline, the Outlook, and Valuation

Betta face challenges due to pipeline with insufficient competitiveness and loss of core talent. Valuation will be lower than peers with more...

Xinyao (Criss) Wang

Pre-IPO IMPACT Therapeutics - Thoughts on the Pipeline, the Concerns and Valuation Outlook

Senaparib shows promise in improving PFS but face commercialization challenge.Pipeline potential hinges on clinical success/approval...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.19)-Bubble of HK Biotech Is Bursting, Ping An Good Doctor Is Overvalued

Innovative drug sector facing share price decline, companies at risk of halved valuations multiple times.The main goal of biotech is to turn...

Xinyao (Criss) Wang

Pre-IPO TenNor Therapeutics (Suzhou) Limited - The Pipelines and the Concerns

China has vigorously restricted the use of antibiotics.TenNor's product won’t replace old ones completely due to higher price/difficulty of...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Impact Therapeutics (英派药业) Pre-IPO: Post Senaparib Commercialization, What's Next?

Impact Therapeutics PHIP updates: advances senaparib to NRDL reimbursement. IMP1734 readout later this year is the single event that determines...

Ke Yan, CFA, FRM

Pre-IPO Betta Pharmaceuticals (A/H Listing) - Thoughts on the Pipeline, the Outlook, and Valuation

​Betta face challenges due to pipeline with insufficient competitiveness and loss of core talent. Valuation will be lower than peers with more...

Xinyao (Criss) Wang

Pre-IPO IMPACT Therapeutics - Thoughts on the Pipeline, the Concerns and Valuation Outlook

​Senaparib shows promise in improving PFS but face commercialization challenge.Pipeline potential hinges on clinical success/approval...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.19)-Bubble of HK Biotech Is Bursting, Ping An Good Doctor Is Overvalued

​Innovative drug sector facing share price decline, companies at risk of halved valuations multiple times.The main goal of biotech is to turn...

Xinyao (Criss) Wang

Pre-IPO TenNor Therapeutics (Suzhou) Limited - The Pipelines and the Concerns

China has vigorously restricted the use of antibiotics.TenNor's product won’t replace old ones completely due to higher price/difficulty of...

Xinyao (Criss) Wang

Betta face challenges due to pipeline with insufficient competitiveness and loss of core talent. Valuation will be lower than peers with more...

Senaparib shows promise in improving PFS but face commercialization challenge.Pipeline potential hinges on clinical success/approval...

Innovative drug sector facing share price decline, companies at risk of halved valuations multiple times.The main goal of biotech is to turn...