Category

Healthcare

Daily Brief Health Care: 3SBio Inc, MedSci Healthcare Holdings, Agilent Technologies and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • 3SBio Inc (1530 HK): Hair Product Acts as the Savior; Marginal Growth of Flagship Drug
  • Pre-IPO MedSci Healthcare Holdings – The Investment Logic, the Business Analysis and the Risks
  • Agilent Technologies: Key Drivers

3SBio Inc (1530 HK): Hair Product Acts as the Savior; Marginal Growth of Flagship Drug

By Tina Banerjee

  • Mandi, OTC alopecia drug of 3SBio Inc (1530 HK), reported revenue growth of 42% y/y in 1H22 and gained 70bps market share over the last six months.
  • With the resurgence of COVID-19 in China interrupting the regular operations of outpatient services at medical institutions, 3SBio’s performance is expected to be affected in near-term.
  • 3SBio is preparing to launch its new drug nalfuraphine hydrochloride orally disintegrating tablets for liver and kidney disease pruritus in China.

Pre-IPO MedSci Healthcare Holdings – The Investment Logic, the Business Analysis and the Risks

By Xinyao (Criss) Wang

  • The large physician network is actually the cornerstone for MedSci Healthcare (MHH HK)’s precision omni-channel marketing solutions and RWS solutions, and also the key to support the overall investment logic.
  • In fierce competition, how to retain physician network for a long time, convert them into business value continuously and achieve the high growth trend expected by the market is challenging.
  • In terms of valuation, MedSci’s valuation could be higher than Medlive due to its stronger physician platform solutions business and medical professional network, but could be lower than HUAYIWANG. 

Agilent Technologies: Key Drivers

By Baptista Research

  • Agilent performed well in the fourth quarter and its revenues as well as earnings were vastly exceeding its forecasts as well as market expectations.
  • Revenue for the Agilent CrossLab Group in the fourth quarter was $381 million.
  • With each of their three business areas expanding by double digits for the year, Agilent have shown a broad-based strength.

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Daily Brief Health Care: Nippon Shinyaku, Esco Lifesciences Group, WuXi AppTec Co Ltd and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Nippon Shinyaku (4516 JP): Viltepso Has Strong Muscle Power; New Seizure Drug Launch in Japan
  • Esco Lifesciences Pre-IPO Tearsheet
  • WuXi AppTec (603259.CH/2359.HK) – Interpretation of the Recent Proposed Disposal of A Shares

Nippon Shinyaku (4516 JP): Viltepso Has Strong Muscle Power; New Seizure Drug Launch in Japan

By Tina Banerjee

  • Driven by continued strong performance of Viltepso and other partnered drugs, Nippon Shinyaku (4516 JP)  is expected to report accelerated revenue growth momentum.
  • Viltepso is expected to be the top selling drug of Nippon Shinyaku in FY23. For FY23, the drug is expected to report revenue of ¥14.7 billion (+90% y/y).
  • In November, Nippon Shinyaku launched Fintepla (fenfluramine) for the treatment of seizures in patients with Dravet syndrome (DS) as an add-on therapy to other anti-epileptic medicines in Japan.

Esco Lifesciences Pre-IPO Tearsheet

By Ethan Aw

  • Esco Lifesciences Group (1891571D SP) is looking to raise about US$300m in its upcoming HK IPO. The deal will be run by JP Morgan, BofA and Jefferies.
  • Esco Lifesciences (EL) is a global provider of life sciences, pharmaceutical and bioprocessing tools, with an aim to develop, discover and commercialize technology-driven life sciences, pharmaceutical and bioprocessing tools. 
  • According to CIC, it is the second largest supplier of biosafety cabinets and the third largest supplier of time-lapse incubators globally as measured by revenue in 2021.

WuXi AppTec (603259.CH/2359.HK) – Interpretation of the Recent Proposed Disposal of A Shares

By Xinyao (Criss) Wang

  • WuXi AppTec announced its proposed disposal of A Shares again. Investors’re worried about the signal behind – Performance growth has reached certain limit. There’s the possibility of a turning point.
  • Such proposed disposal (regardless of share price) could continue to weigh on the valuation performance of the whole CXO sector – There is still “bubble” in share price.
  • In fact, Li Ge (Founder of WuXi AppTec) knows CXO industry much better than anyone, when he decides to resolutely reduce his shareholding, it is very telling. 

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Daily Brief Health Care: Fangzhou Group, iShares Russell 2000 ETF, Becton Dickinson and Co, Beijing Tiantan Biological Products and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Fangzhou Group Pre-IPO Tearsheet
  • Time to Get Defensive After 1.5-Month Uptrend Breaks; High Yield Spreads Widening Much Like Mid-Aug.
  • Becton Dickinson and Co (BDX US): EO Ruling Is Positive; Strong Base Business to Drive Growth Ahead
  • Beijing Tiantan Biological Products (600161CH)-A Good Defensive Investment Target but May Overvalued

Fangzhou Group Pre-IPO Tearsheet

By Ethan Aw

  • Fangzhou Group (FANGZHOU HK) is looking to raise about US$300m in its upcoming HK IPO. The deal will be run by Citibank, UBS and ABC International. 
  • Fangzhou Group is an online chronic disease management platform in China, considered the largest in terms of average MAU in 2021, according to CIC.
  • It focuses on common and chronic diseases such as hypertension, cardiovascular and respiratory chronic diseases, providing tailored medical care and precision medicine covering the full disease cycle for patients.

Time to Get Defensive After 1.5-Month Uptrend Breaks; High Yield Spreads Widening Much Like Mid-Aug.

By Joe Jasper

  • Since early-October we have discussed our expectation for a bear rally, targeting the 200-day MAs on the $IWM and $SPX; targets were hit (within 0.5% of hitting on SPX).
  • We are now seeing short-term uptrend breaks on the IWM and the DJIA; this is a good time to get defensive and/or take profits, as the 1.5-month rally appears over.
  • We expect more weakness in the weeks ahead, and we cannot rule out another test of the 2022 lows.

Becton Dickinson and Co (BDX US): EO Ruling Is Positive; Strong Base Business to Drive Growth Ahead

By Tina Banerjee

  • Ruling on Ethylene Oxide in favor of Sotera is a positive for all the medical devices companies including Becton Dickinson and Co (BDX US), who have EO sterilization facilities.  
  • In FY22, BD reported strong base business, which grew 6.9% y/y on reported basis. On currency-neutral basis, base business increased 9.4% y/y in FY22, accelerated from 8.1% in FY21.
  • FY22 marks 51st consecutive year of dividend increase for BD, which makes it one of the leading dividend yield stocks. Currently, the stock has a dividend yield of 1.53%.

Beijing Tiantan Biological Products (600161CH)-A Good Defensive Investment Target but May Overvalued

By Xinyao (Criss) Wang

  • Tiantan is a good defensive investment target in unfriendly external environment to control the pullback due to its advantageous background and resources, but its profit margin/efficiency needs to improve. 
  • After a large performance decline in Q1, Tiantan recovered well in Q2, but due to the pandemic and some acquisitions/resource integration, its profit performance declined in Q3. 
  • Tiantan’s performance growth is expected to slow down in 2022, with single-digit YoY revenue growth. Accordingly, the current valuation may have overdrawn certainty.

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Daily Brief Health Care: BeiGene Ltd and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • BeiGene (6160.HK/BGNE.US) 22Q3 – The Price of Being an “Outlier”

BeiGene (6160.HK/BGNE.US) 22Q3 – The Price of Being an “Outlier”

By Xinyao (Criss) Wang

  • Our forecast of the total peak sales of BRUKINSA, tislelizumab and the rest commercialized products is about RMB10 billion, which is not enough for BeiGene to turn losses into profits. 
  • BeiGene has the highest R&D/academic ability among domestic pharmaceutical enterprises,but BeiGene cannot be assessed according to the standards of Chinese pharmaceutical enterprises due to its fundamentally different cost structure/breakeven point.
  • The current market value has already priced in the success of TIGIT project to some extent. In other words, the upward elasticity may be limited. But BeiGene deserves long-term follow.

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Daily Brief Health Care: Shanghai United Imaging Healthcare, Wuxi Biologics, Shionogi & Co, Yichang HEC Changjiang Pharma and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • STAR50 Index Rebalance: Adds Outperform Deletes in the Last Week
  • China Healthcare Weekly (Nov25)-Wuxi Biologics, Valuation Logic Changed by NRDL, Biotech Model Fails
  • Shionogi & Co (4507 JP): Oral COVID-19 Drug Got Approval; Files Approval for COVID-19 Vaccine
  • HEC Pharma (1558 HK): Core Product Saw Volume Recovery in 1H 2022; New Launches to Accelerate Growth

STAR50 Index Rebalance: Adds Outperform Deletes in the Last Week

By Brian Freitas

  • The index committee has continued to use a 6-month minimum listing history leading to five changes to the SSE STAR50 (STAR50 INDEX) in December.
  • All changes are in line with our forecasts and there appears to be some pre-positioning over the last week as the deletes have sold off hard.
  • One-Way turnover is estimated at 5.34% and will result in a one-way trade of CNY 3,766m. The estimated impact on the deletes is higher than that on the adds.

China Healthcare Weekly (Nov25)-Wuxi Biologics, Valuation Logic Changed by NRDL, Biotech Model Fails

By Xinyao (Criss) Wang

  • NRDL negotiation has completely changed the pricing method/valuation logic of innovative drugs. Even if price reduction could be milder this year, it’s hard to reverse the shrinking market size/slowing growth.
  • Wuxi Biologics (2269 HK) has successively acquired several factories/production facilities built by domestic biotech companies at low cost. However, we have several concerns.
  • The industry is in the process of understanding and adapting to various changes. The model capital envisioned for biotech to both develop and then commercialize drugs successfully doesn’t work anymore.

Shionogi & Co (4507 JP): Oral COVID-19 Drug Got Approval; Files Approval for COVID-19 Vaccine

By Tina Banerjee

  • On November 22, Shionogi & Co (4507 JP) received emergency regulatory approval for Xocova  in Japan for COVID-19. It is Japan’s first homegrown oral antiviral for SARS-CoV-2 infection.
  • On November 24, Shionogi has filed for manufacturing and sales approval of S-268019, a recombinant protein-based preventive vaccine, for use in priming and booster (third) doses, against COVID-19.
  • Although Shionogi continues to expect ¥110 billion revenue from COVID-19-related products in FY23, the company has raised overall revenue guidance to ¥410 billion from ¥400 billion.

HEC Pharma (1558 HK): Core Product Saw Volume Recovery in 1H 2022; New Launches to Accelerate Growth

By Tina Banerjee

  • During H1 2022, Yichang HEC Changjiang Pharma (1558 HK) recorded revenue of RMB1.3 billion, representing 540% y/y growth, driven by 1,776% y/y revenue growth from its core product Kewei.
  • With gradual recovery of patient traffic in medical institutions and increasing number of flu cases, Kewei showed a trend of recovery in its sales volume leveraging on its market leadership.
  • HEC Pharma has a comprehensive insulin portfolio, which covers both second and third generations of insulin. With 116 million diabetes patients, China has significant market opportunity for insulin.

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Daily Brief Health Care: Shenzhen Mindray Bio-Medical Electronics and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

By David Blennerhassett


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Daily Brief Health Care: Revolution Medicines, Nirogstreet and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • 2023 High Conviction: Revolution Medicines – Cracking The KRAS In Cancer
  • Ayurveda Tech Startup NirogStreet Raises US$12M to Strengthen Supply Chain

2023 High Conviction: Revolution Medicines – Cracking The KRAS In Cancer

By Andrei Zakharov

  • Revolution Medicines (RVMD US)  is focused on therapies to inhibit frontier targets in RAS-addicted cancers. The company’s pipeline is among the strongest in small-cap biotech. 
  • We expect Revolution Medicines shares to outperform the market over the next 12 months as solid performance from the RAS(ON) inhibitor pipeline and oral inhibitor of SHP2 continues. 
  • Investors gain confidence in the rest of the RAS(ON) inhibitor pipeline, including RMC-6291, RMC-6236, and RMC-5552. Management will provide topline data from RMC-4630-03 in 2H 2023. 

Ayurveda Tech Startup NirogStreet Raises US$12M to Strengthen Supply Chain

By e27

  • NirogStreet, an Ayurveda tech startup based in Delhi, India, has received US$12 million in a Series B round of funding led by Jungle Ventures.
  • With technology-based interventions, NirogStreet enables doctors by giving technology to run their clinic, access to quality medicines inventory in real-time, and avenues to learn and earn while also closely working with the government, regulators, and research organisations.

  • It has over 50,000 Ayurvedic doctors in the community and encourages them to create and publish case studies and research reports to bring evidence-based treatment similar to modern medicine.


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Daily Brief Health Care: PHC Holdings and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • PHC Holdings (6523 JP): Strong H1 Result; FY23 Revenue Guidance Raised; Mid-Term Plans Revised

PHC Holdings (6523 JP): Strong H1 Result; FY23 Revenue Guidance Raised; Mid-Term Plans Revised

By Tina Banerjee

  • PHC Holdings (6523 JP) has revised mid-term plan for FY23–26, targeting revenue of ¥420 billion in FY26, representing 5.4% CAGR. CGM will be one of the key growth engines.
  • During H1FY23, total revenue increased 3% y/y to ¥171 billion, mainly driven by a 3% growth in diabetes management business, which contributed 32% of total revenue.
  • In response to the recent depreciation of the Japanese yen, PHC has raised FY23 revenue guidance to ¥358 billion (+5% y/y) from ¥350 billion earlier.

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Daily Brief Health Care: Organicell Regenerative Medicine, Sharps Technology and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Organicell Regenerative Medicine Inc. – Investment Thesis
  • Sharps Technology – Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 11/22

Organicell Regenerative Medicine Inc. – Investment Thesis

By Baptista Research

  • This is our first report on Organicell and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
  • Organicell’s drug candidates’ utilization of extracellular vesicles and perinatal-derived nanoparticles, represent the technological revolution of regenerative biologic drug treatments.
  • Overall, we believe that Organicell has phenomenal growth prospects and is an excellent investment prospect.

Sharps Technology – Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 11/22

By Baptista Research

  • This is our first report on Sharps Technology and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
  • As the company starts reporting revenues in 2023, Sharps is expected to see its stock fly.
  • With the Nephron transaction and income generation from the Hungarian facility, this is anticipated to start reporting a positive top-line starting in Q1 2023.

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Daily Brief Health Care: Medley, Ascentage Pharma Group Corp and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Medley (4480) – Move to Prime Means TOPIX Inclusion Next Month
  • Ascentage Pharma (6855.HK) – May Not Survive “This Winter”

Medley (4480) – Move to Prime Means TOPIX Inclusion Next Month

By Travis Lundy

  • A year ago, TSE Growth-listed Medley (4480 JP) said they would “make preparations” for a listing on TSE Prime. Last month, Janaghan Jeyakumar, CFA had it at “Almost Ready.”
  • Today they announced they would list on TSE Prime on 28 November which means a TOPIX Inclusion at end-December. 
  • Shareholder structure and stock bias matter a lot in this case. It’s very much worth looking at the details.

Ascentage Pharma (6855.HK) – May Not Survive “This Winter”

By Xinyao (Criss) Wang

  • The  R&D direction and field of Ascentage Pharma Group Corp (6855 HK) distinguish it from other domestic biotech companies. The Company has proved its R&D capability after the successful launch of olverembatinib.
  • The uncertainties of commercialization performance and R&D risks would make it difficult for Ascentage to achieve break-even. Due to increasing cash flow pressure, Ascentage must first solve the survival problem.
  • Considering the Risk return trade-off, we think Ascentage has short-term investment value only when it’s “extremely undervalued”.We suggest that it could be sold in a timely manner to secure gains.

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