HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Akeso Biopharma Inc / Equity Capital Markets

<ul>
<li>The current stock price is not high. Akeso is reluctant to diluting its shareholders too much. So, it plans to raise just HK$576.65 million, which won’t bring any fundamental change.</li>
<li>
<a href="https://www.smartkarma.com/entities/akeso-biopharma-inc" target="_blank" data-smartkarma-citation="entities:28830:1" rel="noopener">Akeso (9926 HK)</a>’s conservative management style, development mode, low cash balance and FDA’s “Guidance” on bispecific antibodies would limit the Company’s future development pace, commercialization, internationalization and valuation expansion prospects. </li>
<li>We do not think Akeso is attractive at present, unless the Company could hit some big license-out deals, or IPO on SSE STAR Market to secure enough funds in advance. </li>
</ul>


The current stock price is not high. Akeso is reluctant to diluting its shareholders too much. So, it plans to raise just HK$576.65 million, which won’t bring any fundamental change.

Akeso (9926 HK)’s conservative management style, development mode, low cash balance and FDA’s “Guidance” on bispecific antibodies would limit the Company’s future development pace, commercialization, internationalization and valuation expansion prospects. 
We do not think Akeso is attractive at present, unless the Company could hit some big license-out deals, or IPO on SSE STAR Market to secure enough funds in advance. 


Akeso Biopharma Placement (9926.HK) - The Concerns Behind and the Outlook

Thematic (Sector/Industry)

<ul>
<li>Four departments jointly issued “opinions” emphasis on the training/construction of TCM talents, which has great significance of TCM development in China. We advise investors not to underestimate this policy.</li>
<li>The COVID-19, policy risks (VBP/centralized procurement/DRGs) and public hospitals expansion have significantly intensified private hospitals' pressure for survival, which will eventually be reflected in the financial statements.</li>
<li>The deal between <a href="https://www.smartkarma.com/entities/sino-biopharmaceutical" target="_blank" data-smartkarma-citation="entities:230:1" rel="noopener">Sino Biopharmaceutical (1177 HK) </a>and F-star Therapeutics with aggregate consideration of approximately US$161 million indicated that the industry clearing of biotech in China is far from completed.</li>
</ul>


Four departments jointly issued “opinions” emphasis on the training/construction of TCM talents, which has great significance of TCM development in China. We advise investors not to underestimate this policy.
The COVID-19, policy risks (VBP/centralized procurement/DRGs) and public hospitals expansion have significantly intensified private hospitals' pressure for survival, which will eventually be reflected in the financial statements.
The deal between Sino Biopharmaceutical (1177 HK) and F-star Therapeutics with aggregate consideration of approximately US$161 million indicated that the industry clearing of biotech in China is far from completed.


China Healthcare Weekly (July.1)- TCM New Policy, Private Hospitals Survival Pressure, Sino Biopharm

Shanghai Junshi Biosciences  / Equity Capital Markets

<ul>
<li>Junshi’s fatal flaw is not that it is still suffering loss, or that its founders have no medical background, but that the Company is very short of money.</li>
<li>Considering the gloomy prospects of etesevimab/VV116, uncertainties in toripalimab and other late-stage candidates, we remain conservative about Junshi’s commercialization outlook. Junshi's higher valuation than Innovent is not justified.</li>
<li>Together with unfriendly macro environment, we don’t think heavy investment in R&amp;D/MRCT/commercial development could bring high return as expected.Investors need to be rational about Junshi's RMB4 billion private placement plan.</li>
</ul>


Junshi’s fatal flaw is not that it is still suffering loss, or that its founders have no medical background, but that the Company is very short of money.
Considering the gloomy prospects of etesevimab/VV116, uncertainties in toripalimab and other late-stage candidates, we remain conservative about Junshi’s commercialization outlook. Junshi's higher valuation than Innovent is not justified.
Together with unfriendly macro environment, we don’t think heavy investment in R&amp;D/MRCT/commercial development could bring high return as expected.Investors need to be rational about Junshi's RMB4 billion private placement plan.


Shanghai Junshi Bioscience Placement- Junshi Is Having a Hard Time, with Lower than Expected Returns

<ul>
<li>The NDRC issued the “14th Five-Year Plan For Bioeconomy”. This marks bio-economy has become a new economic form. With diversified resources and capital, a trillion-level market would develop rapidly.</li>
<li>The third centralized procurement in Fujian Province officially opened, involving five medical consumables. The bidding rule is milder than drugs VBP. Investors could pay more attention to medical device sector.</li>
<li>Akeso's 2021 PD-1 sales enlightened us that innovative drugs could still achieve good sales performance even without entering NRDL. So, companies could choose to give up NRDL negotiation strategically.</li>
</ul>


The NDRC issued the “14th Five-Year Plan For Bioeconomy”. This marks bio-economy has become a new economic form. With diversified resources and capital, a trillion-level market would develop rapidly.
The third centralized procurement in Fujian Province officially opened, involving five medical consumables. The bidding rule is milder than drugs VBP. Investors could pay more attention to medical device sector.
Akeso's 2021 PD-1 sales enlightened us that innovative drugs could still achieve good sales performance even without entering NRDL. So, companies could choose to give up NRDL negotiation strategically.


China Healthcare Weekly (May13)-New Bioeconomy Plan,Rational Withdrawal from NRDL,Medical Device VBP

Equity Bottom-Up

Sino Biopharmaceutical / Equity Bottom-Up

<ul>
<li>As the “the king of generics”, <a href="https://www.smartkarma.com/entities/sino-biopharmaceutical" target="_blank" data-smartkarma-citation="entities:230:1" rel="noopener">Sino Biopharmaceutical (1177 HK)</a> is lucky to have three “golden eggs”(Entecavir, Anlotinib, CoronaVac) to contribute huge performance over the years.</li>
<li>The promotion of VBP and fierce competition make Sino Biopharmaceutical's products lose pricing power. Due to little revolutionary technology/slow product iteration/weak R&amp;D, it’s unlikely to have another Anlotinib level asset.</li>
<li>The Company's development mode, the mindset of management, and other concerns could be more serious problems, causing investors to distrust the management level and preventing it from getting high valuation.</li>
</ul>


As the “the king of generics”, Sino Biopharmaceutical (1177 HK) is lucky to have three “golden eggs”(Entecavir, Anlotinib, CoronaVac) to contribute huge performance over the years.
The promotion of VBP and fierce competition make Sino Biopharmaceutical's products lose pricing power. Due to little revolutionary technology/slow product iteration/weak R&amp;D, it’s unlikely to have another Anlotinib level asset.
The Company's development mode, the mindset of management, and other concerns could be more serious problems, causing investors to distrust the management level and preventing it from getting high valuation.


Sino Biopharmaceutical (1177.HK) - Three “Golden Eggs” and the Risks Behind

China

Akeso Inc. operates operatesa s a biotech company. The compnay develops treatments and therapies for various types of diseases. Akeso serves cutomers worldwide

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Akeso Biopharma Inc (9926 HK)

Akeso Biopharma Placement (9926.HK) - The Concerns Behind and the Outlook

Akeso’s conservative style/development mode/low cash balance and FDA’s “Guidance” on bispecific antibody will limit its outlook and valuation...

Xinyao (Criss) Wang

China Healthcare Weekly (July.1)- TCM New Policy, Private Hospitals Survival Pressure, Sino Biopharm

New policy about TCM talent will have great significance of TCM development.Private hospitals' survival pressure will be reflected in financial...

Xinyao (Criss) Wang

Shanghai Junshi Bioscience Placement- Junshi Is Having a Hard Time, with Lower than Expected Returns

Junshi's Achilles heel is lack of cash and is in difficult time. PD-1/COVID-19 products can't relieve cashflow pressure.The uncertain outlook/macro...

Xinyao (Criss) Wang

China Healthcare Weekly (May13)-New Bioeconomy Plan,Rational Withdrawal from NRDL,Medical Device VBP

The 14th Five-Year Bioeconomy plan indicates a new economic form and a trillion-level market.Medical device will be a better investment if...

Xinyao (Criss) Wang

Sino Biopharmaceutical (1177.HK) - Three “Golden Eggs” and the Risks Behind

Sino Biopharma is lucky to have three “golden eggs” to contribute huge performance over the years. But its weak pipeline and other destabilizing...

Xinyao (Criss) Wang

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