Daily Brief Health Care: Mayne Pharma, BlissBio, Hansoh Pharmaceutical Group and more

• Pending Acquisition by Cosette Pharma: Mayne Pharma‘s future is largely defined by a pending acquisition by Cosette Pharmaceuticals, which aims to create a leading entity in the U.S. Women’s Health and Dermatology sectors. However, the deal is subject to a legal dispute initiated by Cosette, creating significant uncertainty around its completion.
• Strategic Focus and Turnaround: Following a period of financial distress and a major asset sale in 2022, management has refocused the company on its core specialty areas of Women’s Health and Dermatology. This strategy has led to significant improvements in recent financial performance, with strong revenue growth and a return to positive operating cash flow.
• Highly Competitive Landscape: The company operates in the intensely competitive generic and specialty pharmaceutical markets. While it possesses a portfolio of branded products, it faces constant pricing pressure from larger competitors and other generic manufacturers, necessitating strong commercial execution.

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• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: JST Group (6687 HK) and FineToday Holdings (420A JP) IPOs; Sany Heavy Industry (600031 CH) H Share listing.
• Event-Driven developments: Mayne Pharma (MYX AU),Soft99 Corp (4464 JP), Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK), Mandarin Oriental International (MAND SP), Genting Malaysia (GENM MK). 

• The new payload story/ADC-engineering platforms need to be verified by big licensing-out deals. If verification is successful, MNCs will pay high price.However, if verification fails, BlissBio’s pipeline would be “ignored”.
• BlissBio entered into a wind-down agreement with Eisai for BB-1701.In our view, MNC’s interest in BB-1701 is decreasing.The possibility of reaching big BD deal on BB-1712/BB-1705 is also not high.
• The investment logic of biotech has changed and high valuation is driven by big licensing-out deals. From this perspective, we think valuation of BlissBio should be lower than peers.

• Hansoh Pharmaceutical Group (3692 HK) granted Roche an exclusive worldwide license to (excluding the Chinese Mainland, Hong Kong, Macau and Taiwan) to develop, manufacture and commercialize HS-20110.
• HS-20110 is an investigational CDH17-targeting ADC currently being developed for the treatment of colorectal cancer (CRC) and other tumors, with global Phase I trial underway in China and the US.
• CDH17 targeted ADCs development (about 31 drug development projects ongoing) scene obviously seems crowded, but Hansoh’s strong execution with Roche’s global prowess will surely give it an edge.