HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>As the core candidate in Everest Medicines’s current pipeline, the peak sales of Nefecon could be significantly lower-than-expected, mainly due to low diagnostic rate, limited applicable patient population, high price, competition from latecomers.</li>
<li>For the rest late-stage candidates, such as Etrasimod, Eravacycline, Taniborbactam, their peak sales would all be lower than that of Nefecon. So, they are unable to bring enough imagination space.</li>
<li>Based on license-in mode, cost of Everest Medicines is higher than independent-R&amp;D companies. Whether products would be returned to licensors again because of weak sales prospects is also uncertain factor.</li>
</ul>


As the core candidate in Everest Medicines’s current pipeline, the peak sales of Nefecon could be significantly lower-than-expected, mainly due to low diagnostic rate, limited applicable patient population, high price, competition from latecomers.
For the rest late-stage candidates, such as Etrasimod, Eravacycline, Taniborbactam, their peak sales would all be lower than that of Nefecon. So, they are unable to bring enough imagination space.
Based on license-in mode, cost of Everest Medicines is higher than independent-R&amp;D companies. Whether products would be returned to licensors again because of weak sales prospects is also uncertain factor.


Everest Medicines (1952.HK) - To Take off Again or to Fall Instead?

Equity Capital Markets

HighTide Therapeutics / Equity Capital Markets

<ul>
<li>The mechanism of NASH has not yet been accurately determined. Among the major players, FDA has postponed the approval of OCA (FXR) for NASH. THR-β is currently the most promising. </li>
<li>HighTide claims that HTD1801 is able to achieve the goal of improving effectiveness and reducing toxicity. However, HTD1801 hasn’t reached pathological endpoints. We’ll have to wait for future clinical data.</li>
<li>This Company actually has high risk due to cash shortage and uncertain R&amp;D progress, which could lead to lower-than-expected stock price performance. We are conservative about HighTide based on analysis.</li>
</ul>


The mechanism of NASH has not yet been accurately determined. Among the major players, FDA has postponed the approval of OCA (FXR) for NASH. THR-β is currently the most promising. 
HighTide claims that HTD1801 is able to achieve the goal of improving effectiveness and reducing toxicity. However, HTD1801 hasn’t reached pathological endpoints. We’ll have to wait for future clinical data.
This Company actually has high risk due to cash shortage and uncertain R&amp;D progress, which could lead to lower-than-expected stock price performance. We are conservative about HighTide based on analysis.


Pre-IPO HighTide Therapeutics - Its Outlook in NASH Field Is Not Optimistic, with High Risks

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI in September 2023.</li>
<li>Based on the latest available data, I expect two ADDs and two DELs for HSCEI in the September 2023 Rebalance.</li>
<li>I estimate one-way flow to be US$276mn. Only the two ADDs and two DELs involved in the index changes are likely to have more than one day to trade. </li>
</ul>


In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI in September 2023.
Based on the latest available data, I expect two ADDs and two DELs for HSCEI in the September 2023 Rebalance.
I estimate one-way flow to be US$276mn. Only the two ADDs and two DELs involved in the index changes are likely to have more than one day to trade. 


Quiddity HSCEI Sep 23 Flow Expectations: Two Changes Likely, US$276mn One-Way

<ul>
<li>The 9th national VBP is drawing near. As all drugs under national/provincial VBP are scheduled to be executed before 2025/12/31, there should be new policies in 2026 and beyond.</li>
<li>The capabilities of Chinese pharmaceutical companies in ADC field have at least stepped onto a platform to compete with international giants, which is clearly more progressive than during PD-1 era.</li>
<li>We analyzed key points of Ovctek. Its investment logic has changed and centralized procurement will break investors' expectations for Ovctek’s future performance growth. Valuation may continue to be under pressure.</li>
</ul>


The 9th national VBP is drawing near. As all drugs under national/provincial VBP are scheduled to be executed before 2025/12/31, there should be new policies in 2026 and beyond.
The capabilities of Chinese pharmaceutical companies in ADC field have at least stepped onto a platform to compete with international giants, which is clearly more progressive than during PD-1 era.
We analyzed key points of Ovctek. Its investment logic has changed and centralized procurement will break investors' expectations for Ovctek’s future performance growth. Valuation may continue to be under pressure.


China Healthcare Weekly (May.26)- 9th National VBP, China's Strength in ADC Field, Ovctek, Eyebright

Jiangsu Hengrui Medicine / Equity Bottom-Up

<ul>
<li>The contribution of innovative drugs cannot offset the generics revenue decline caused by VBP. Without PD-1 level big variety emerging, the pressure of VBP would continue for a long time. </li>
<li>Hengrui launched Luzsana to develop global business, seeming to send “a compromise and ambiguous signal” to various complex forces within this traditional pharmaceutical empire. ADC pipeline remains to be seen.</li>
<li>Hengrui still has many problems that are difficult to solve. Even though there is a rebound, Hengrui’s stock price performance may not deliver excess returns, with lower-than-expected upside elasticity.</li>
</ul>


The contribution of innovative drugs cannot offset the generics revenue decline caused by VBP. Without PD-1 level big variety emerging, the pressure of VBP would continue for a long time. 
Hengrui launched Luzsana to develop global business, seeming to send “a compromise and ambiguous signal” to various complex forces within this traditional pharmaceutical empire. ADC pipeline remains to be seen.
Hengrui still has many problems that are difficult to solve. Even though there is a rebound, Hengrui’s stock price performance may not deliver excess returns, with lower-than-expected upside elasticity.


Jiangsu Hengrui Medicine (600276.CH) 2022/23Q1 - The Situation Is Not as Optimistic as Imagined

Hong Kong

Sino Biopharmaceutical Limited, through its subsidiaries, researches, develops, produces, and sells biopharmaceutical products for the medical treatment of ophthalmia, as well as modernized Chinese medicine and chemical medicine for the treatment of hepatitis.

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Sino Biopharmaceutical (1177 HK)

Everest Medicines (1952.HK) - To Take off Again or to Fall Instead?

Great personnel changes had taken place in Everest Medicines. However, peak sales of core products could be significantly lower than expected. So,...

Xinyao (Criss) Wang

Pre-IPO HighTide Therapeutics - Its Outlook in NASH Field Is Not Optimistic, with High Risks

Intercept's failure to obtain FDA approval for NASH drug may cast shadow on HighTide's core product outlook.HighTide's valuation performance is...

Xinyao (Criss) Wang

Quiddity HSCEI Sep 23 Flow Expectations: Two Changes Likely, US$276mn One-Way

I see BeiGene Ltd (6160 HK) and Trip.com (9961 HK) as ADDs and Country Garden Services (6098 HK) and Zhongsheng Group (881 HK) as DELs.

Janaghan Jeyakumar, CFA

China Healthcare Weekly (May.26)- 9th National VBP, China's Strength in ADC Field, Ovctek, Eyebright

The 9th national VBP is coming, but policy could change from 2026.We see positive factors in the performance of Chinese company in ADC field, who...

Xinyao (Criss) Wang

Jiangsu Hengrui Medicine (600276.CH) 2022/23Q1 - The Situation Is Not as Optimistic as Imagined

The message that the management hopes to convey to investors is Hengrui's “darkest hour” has ended.But based on our analysis, low...

Xinyao (Criss) Wang

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