In today’s briefing:
- PegBio IPO Preview: A Founder-Led Biopharma Player Fighting T2DM and Obesity in China
- China Healthcare Week (Mar.8) – GLP-1s, “Crowding Out Effect” in Healthcare, Microport’s Trouble
- WuXi AppTec (2359.HK/603259.CH) – Updates About the BIOSECURE Act and the Outlook
- Pro Medicus Ltd (PME AU): Expanding Footprint in North America Is Making The Image Crystal Clear
PegBio IPO Preview: A Founder-Led Biopharma Player Fighting T2DM and Obesity in China
- PegBio, a VC-backed biotech company, plans to tap capital markets in Hong Kong. CICC is leading the offering, and an IPO date has yet to be announced.
- The company’s pipeline features promising drug candidates designed for the treatment of type 2 diabetes mellitus (T2DM), obesity, NASH, OIC and congenital hyperinsulinemia.
- PegBio employs a proprietary technology platform, called HECTOR, and has six drug candidates in the pipeline portfolio. PB-119 is their core product with the purpose to treat T2DM and obesity.
China Healthcare Week (Mar.8) – GLP-1s, “Crowding Out Effect” in Healthcare, Microport’s Trouble
- Since the domestic revenue scale of PD-1 has been much lower-than-expected, the market seems no longer willing to offer GLP-1 weight loss drug high expectations. However, that’s not right.
- For China healthcare, the emergence of negative domestic policies is a time for reassessment and seeking opportunities, rather than a time of blind pessimism.
- Issuing convertible bonds is clearly a bad decision for Microport, which chose to sacrifice the interests of minority shareholders. Together with weak fundamentals/cashflow pressure, the management needs to take responsibility.
WuXi AppTec (2359.HK/603259.CH) – Updates About the BIOSECURE Act and the Outlook
- A Senate committee moved the bill (S.3558) forward that would prohibit pharmaceutical companies from using foreign service providers like WuXi AppTec and its subsidiaries. However, rational voices are still expected.
- Seemingly conflicting proposals are mostly “noise” and disturbances to stock prices. This means in the future, we‘ll see stock prices move sharply again due to latest developments on these bills.
- WuXi AppTec should have “bottom-line thinking” and prepare some “backup solutions”.Investors don’t need to be overly pessimistic, because when global capital flows reverse, no one will mind these bills anymore.
Pro Medicus Ltd (PME AU): Expanding Footprint in North America Is Making The Image Crystal Clear
- Pro Medicus Ltd (PME AU) reported record high revenue and net profit in H1FY24. The result was largely driven by a 37% YoY increase in revenue from North America.
- In H1FY24, PME won four key contracts. These contracts have a total contract value of A$200M (at committed minimum exam volumes) with contract terms ranging from 7 to 10 years.
- PME believes H2FY24 will be stronger than H1FY24. Assuming key contracts up for renewal are renewed at same rate, PME sees forward revenue of >A$608M over the next five years.
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