HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/remegen-ltd" target="_blank" data-smartkarma-citation="entities:29191:1" rel="noopener">Remegen Ltd (1788976D CH)</a> has developed a comprehensive pipeline of more than 10 new biological drug candidates for the treatment of refractory diseases, including autoimmune diseases, tumors and eye diseases, that meet a large number of unmet medical needs in China and around the world. Among these drug candidates, two core products are RC18 and RC48. Both are at late clinical stage and would probably be the first two drugs to be commercialized for RemeGen.

Remegen Ltd (1788976D CH) has developed a comprehensive pipeline of more than 10 new biological drug candidates for the treatment of refractory diseases, including autoimmune diseases, tumors and eye diseases, that meet a large number of unmet medical needs in China and around the world. Among these drug candidates, two core products are RC18 and RC48. Both are at late clinical stage and would probably be the first two drugs to be commercialized for RemeGen.

Pre-IPO RemeGen - Insights on Two Core Products RC18 & RC48

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

On the 22 April this year, the FDA granted <a href="https://www.immunomedics.com/news-and-events/fda-grants-accelerated-approval-for-immunomedics-trodelvy-in-previously-treated-metastatic-triple-negative-breast-cancer" target="_blank" rel="noopener">accelerated approval</a> for Trodelvy, <a href="https://www.smartkarma.com/entities/immunomedics-inc" target="_blank" data-smartkarma-citation="entities:13913:1" rel="noopener">Immunomedics Inc (IMMU US)</a>'s first-in-class antibody-drug conjugate (ADC), for the treatment of patients with metastatic triple-negative breast cancer (mTNBC). Shares gained 19% to US$26.18/share, taking the one year gain to 57%.
(Triple-negative breast cancer is cancer that tests negative for estrogen receptors, progesterone receptors, and excess HER2 protein.)
On the <a href="https://www.immunomedics.com/news-and-events/immunomedics-announces-positive-results-from-phase-3-ascent-study-of-trodelvytm" target="_blank" rel="noopener">6 July</a>, Immunomedics reported that the phase 3 ASCENT study stopped early due to compelling efficacy after meeting primary and key secondary endpoints - Trodelvy "has set a new benchmark in scientific and clinical innovation for patients with mTNBC by offering a novel alternative to the common drugs currently in clinical practice". Shares cleared US$40/share and largely traded flat for the next 9 weeks.
On the 13 September, <a href="https://www.smartkarma.com/entities/gilead-sciences-inc" target="_blank" data-smartkarma-citation="entities:973:1" rel="noopener">Gilead Sciences (GILD US)</a> announced it had entered into a definitive agreement pursuant to which Gilead will acquire Immunomedics for $88.00/share in cash, a 108% premium to last close, in a US$20bn deal.
The tender offer is not subject to any financing condition with ~US$15bn of the funding from existing cash and ~US$6bn in newly issued debt.
Conditions to the tender offer are limited - valid tendering of 50% + one share, no MACs, and the waiting period applicable to the Offer under the HSR Act having expired or been terminated. 
The close of the tender is expected in 4Q20, subject to regulatory approval and other customary closing conditions.  Immunomedics' board unanimously supports the Offer.
Provided the Offer completes, a second-stage merger will be undertaken, which will dispense with the requirement for consent from Immunomedics shareholders.  Immunomedics will cease to be listed once the merger is consummated.
This looks done. As always, more below the fold.

On the 22 April this year, the FDA granted accelerated approval for Trodelvy, Immunomedics Inc (IMMU US)'s first-in-class antibody-drug conjugate (ADC), for the treatment of patients with metastatic triple-negative breast cancer (mTNBC). Shares gained 19% to US$26.18/share, taking the one year gain to 57%.
(Triple-negative breast cancer is cancer that tests negative for estrogen receptors, progesterone receptors, and excess HER2 protein.)
On the 6 July, Immunomedics reported that the phase 3 ASCENT study stopped early due to compelling efficacy after meeting primary and key secondary endpoints - Trodelvy "has set a new benchmark in scientific and clinical innovation for patients with mTNBC by offering a novel alternative to the common drugs currently in clinical practice". Shares cleared US$40/share and largely traded flat for the next 9 weeks.
On the 13 September, Gilead Sciences (GILD US) announced it had entered into a definitive agreement pursuant to which Gilead will acquire Immunomedics for $88.00/share in cash, a 108% premium to last close, in a US$20bn deal.
The tender offer is not subject to any financing condition with ~US$15bn of the funding from existing cash and ~US$6bn in newly issued debt.
Conditions to the tender offer are limited - valid tendering of 50% + one share, no MACs, and the waiting period applicable to the Offer under the HSR Act having expired or been terminated. 
The close of the tender is expected in 4Q20, subject to regulatory approval and other customary closing conditions.  Immunomedics' board unanimously supports the Offer.
Provided the Offer completes, a second-stage merger will be undertaken, which will dispense with the requirement for consent from Immunomedics shareholders.  Immunomedics will cease to be listed once the merger is consummated.
This looks done. As always, more below the fold. 

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/834/original/2020-08-02_06-39-22.png?1596317982" class="editor-image img-responsive" data-smartkarma-image-id="149834"></figure><div class="content-caption">Source • Japan Analytics</div>CORRECTION - The last day of July saw the TOPIX index fall by 2.8% to reach a new two-month low, 8.2% below the closing high of June 8th. A combination of a strong yen, peak COVID-19 cases, the continuing unedifying stream of results &amp; revisions, and month-end portfolio 'adjustments' proved toxic. Our Results Score lost a further 57 basis points, while bullish initial full-year forecasts from <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a> and <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso (6902 JP)</a> helped the Forecast/Revision Score recover by 51 basis points. Nevertheless, the market's correlation with earnings and revisions momentum remains distorted by central bank liquidity. As noted in<a href="https://www.smartkarma.com/insights/japan-market-update-tired" target="_blank" data-smartkarma-citation="insights:41562" rel="noopener"> Tired</a>, we expect both our Scores to bottom nearer the 2009 lows, in which case the Bank of Japan's cumulative purchases could reach over 10% of market value.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/839/original/2020-08-02_07-35-10.png?1596321328" class="editor-image img-responsive" data-smartkarma-image-id="149839"></figure><div class="content-caption">Source • Japan Analytics</div>DOWNFALL - After one-third of quarterly earnings announcements, at the current pace forward aggregate operating and net income could reach ¥35 trillion and ¥20 trillion, respectively by the end of the month, taking the market multiple to 30x, absent any further correction in share prices. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/840/original/2020-08-02_07-52-16.png?1596322358" class="editor-image img-responsive" data-smartkarma-image-id="149840"></figure><div class="content-caption">Source • Japan Analytics</div>SECTOR SCORES - As in past cycles, the Information Technology, Internet, and Healthcare Sectors have proved to be the most resilient. On the downside, the breadth of the lowest-scoring Sectors is abnormal, with Consumer Services and Transport &amp; Logistics joining Metals, Autos, Eletcial Equipment and Machinery. The trailing-twelve-month (TTM) results in the table below confirm the chart above but suggests some caution over Internet Sector margins.   <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/842/original/2020-08-02_07-59-45.png?1596322803" class="editor-image img-responsive" data-smartkarma-image-id="149842"></figure><div class="content-caption">Source • Japan Analytics</div><hr>•BEST &amp; WORST 31st JULY •BEST &amp; WORST - Combining the day's results, revisions and forecasts, we select the 'best' and the 'worst' announcements according to our scoring. On the podium were <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a> and <a href="https://www.smartkarma.com/entities/infocom-corp" target="_blank" data-smartkarma-citation="entities:8412:1" rel="noopener">Infocom (4348 JP)</a>. In the pits were <a href="https://www.smartkarma.com/entities/casio-computer-co-ltd" target="_blank" data-smartkarma-citation="entities:18338:1" rel="noopener">Casio Computer (6952 JP)</a> and three railway lines - <a href="https://www.smartkarma.com/entities/odakyu-electric-railway-co" target="_blank" data-smartkarma-citation="entities:5405:1" rel="noopener">Odakyu (9007 JP)</a>, <a href="https://www.smartkarma.com/entities/west-japan-railway-co" target="_blank" data-smartkarma-citation="entities:12077:1" rel="noopener">West Japan (9021 JP)</a> and <a href="https://www.smartkarma.com/entities/central-japan-railway-co" target="_blank" data-smartkarma-citation="entities:13520:1" rel="noopener">Central Japan (9022 JP)</a> for which we will show the Peer Group's record-low long-term Scores.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/913/original/2020-08-02_08-30-42.png?1596324654" class="editor-image img-responsive" data-smartkarma-image-id="149913"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/914/original/2020-08-02_08-31-29.png?1596324699" class="editor-image img-responsive" data-smartkarma-image-id="149914"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/915/original/2020-08-02_08-33-28.png?1596324818" class="editor-image img-responsive" data-smartkarma-image-id="149915"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/916/original/2020-08-02_08-40-22.png?1596325251" class="editor-image img-responsive" data-smartkarma-image-id="149916"></figure><div class="content-caption">Source • Japan Analytics</div><div>
<hr>
DAILY STATS
PERCENTAGES - 66% of quarterly results,  71% of annual forecasts/revisions and 75% of interim forecasts have negative Scores and 26% of companies reporting lost money for the quarter.
</div><hr><div>429 Quarterly Results</div><div><ul>
<li>
Results Score: 28% Positive / 6% Neutral / 66% Negative</li>
<li>
Average Results Score Change: -3.1 points</li>
<li>
Average % Change in Revenue: -9.3% Quarter YoY / -2.0% Rolling TTM YoY </li>
<li>
Average Operating Profit Margin Change: -1.0 ppt</li>
<li>
Percentage Making Quarterly Losses: 26%</li>
</ul></div><hr><div> 153 Annual • 115 Interim Forecasts/Revisions</div><div><ul>
<li>
Annual Forecast/Revision Score: 26% Positive / 3% Neutral / 71% Negative</li>
<li>
Interim Forecast/Revision Score Change: 24% Positive / 1% Neutral / 75% Negative</li>
<li>
Average Forecast/Revision Score Change: -8.4 points</li>
</ul></div>

Source • Japan AnalyticsCORRECTION - The last day of July saw the TOPIX index fall by 2.8% to reach a new two-month low, 8.2% below the closing high of June 8th. A combination of a strong yen, peak COVID-19 cases, the continuing unedifying stream of results &amp; revisions, and month-end portfolio 'adjustments' proved toxic. Our Results Score lost a further 57 basis points, while bullish initial full-year forecasts from Takeda Pharmaceutical (4502 JP) and Denso (6902 JP) helped the Forecast/Revision Score recover by 51 basis points. Nevertheless, the market's correlation with earnings and revisions momentum remains distorted by central bank liquidity. As noted in Tired, we expect both our Scores to bottom nearer the 2009 lows, in which case the Bank of Japan's cumulative purchases could reach over 10% of market value.Source • Japan AnalyticsDOWNFALL - After one-third of quarterly earnings announcements, at the current pace forward aggregate operating and net income could reach ¥35 trillion and ¥20 trillion, respectively by the end of the month, taking the market multiple to 30x, absent any further correction in share prices. Source • Japan AnalyticsSECTOR SCORES - As in past cycles, the Information Technology, Internet, and Healthcare Sectors have proved to be the most resilient. On the downside, the breadth of the lowest-scoring Sectors is abnormal, with Consumer Services and Transport &amp; Logistics joining Metals, Autos, Eletcial Equipment and Machinery. The trailing-twelve-month (TTM) results in the table below confirm the chart above but suggests some caution over Internet Sector margins.   Source • Japan Analytics•BEST &amp; WORST 31st JULY •BEST &amp; WORST - Combining the day's results, revisions and forecasts, we select the 'best' and the 'worst' announcements according to our scoring. On the podium were Takeda Pharmaceutical (4502 JP) and Infocom (4348 JP). In the pits were Casio Computer (6952 JP) and three railway lines - Odakyu (9007 JP), West Japan (9021 JP) and Central Japan (9022 JP) for which we will show the Peer Group's record-low long-term Scores.Source • Japan Analytics

DAILY STATS
PERCENTAGES - 66% of quarterly results,  71% of annual forecasts/revisions and 75% of interim forecasts have negative Scores and 26% of companies reporting lost money for the quarter.
429 Quarterly Results

Results Score: 28% Positive / 6% Neutral / 66% Negative

Average Results Score Change: -3.1 points

Average % Change in Revenue: -9.3% Quarter YoY / -2.0% Rolling TTM YoY 

Average Operating Profit Margin Change: -1.0 ppt

Percentage Making Quarterly Losses: 26%
 153 Annual • 115 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 26% Positive / 3% Neutral / 71% Negative

Interim Forecast/Revision Score Change: 24% Positive / 1% Neutral / 75% Negative

Average Forecast/Revision Score Change: -8.4 points


🇯🇵 JAPAN • Results & Revisions 31st July - Takeda, Yamato/SG, Seria, FP, Keyence, Dai-Ichi Sankyo

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

The management has confirmed that the wholesale price for ginger (a key ingredient and natural immunity booster is well known in Indonesia) is much more manageable compared to the retail price that has gone through the roof as demand surges. 
With a lasting COVID-19 pandemic in the country,  <a href="https://www.smartkarma.com/entities/industri-jamu-dan-farmasi-sd-mncl-tbk-pt" target="_blank" data-smartkarma-citation="entities:6033:1" rel="noopener">Sido Muncul (SIDO IJ)</a> is the beneficiary of the increased demand for an immunity booster therefore if there will be an increase in the raw material cost, the revenue growth could negate that and translate into some earnings growth. 
SIDO has outperformed <a href="https://www.smartkarma.com/entities/jakarta-stock-exchange-composite-index" target="_blank" data-smartkarma-citation="entities:22914:1" rel="noopener">Jakarta Stock Exchange Composite Index (JCI INDEX)</a> post initial COVID-19 event, and while it may seem that the Index is cheaper relative to SIDO, the index constituents have to deal with the economic reality post-COVID-19 while SIDO is a beneficiary.

The management has confirmed that the wholesale price for ginger (a key ingredient and natural immunity booster is well known in Indonesia) is much more manageable compared to the retail price that has gone through the roof as demand surges. 
With a lasting COVID-19 pandemic in the country,  Sido Muncul (SIDO IJ) is the beneficiary of the increased demand for an immunity booster therefore if there will be an increase in the raw material cost, the revenue growth could negate that and translate into some earnings growth. 
SIDO has outperformed Jakarta Stock Exchange Composite Index (JCI INDEX) post initial COVID-19 event, and while it may seem that the Index is cheaper relative to SIDO, the index constituents have to deal with the economic reality post-COVID-19 while SIDO is a beneficiary. 

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Burning Rock Biotech / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/burning-rock-biotech" target="_blank" data-smartkarma-citation="entities:28970:1" rel="noopener">Burning Rock Biotech (BNR US)</a> is a precision oncology and early cancer detection company. It is China’s number one NGS-based cancer therapy selection company with a 26.7% market share as measured by the number of patients tested in 2019, according to CIC. Burning Rock is backed by Sequoia Capital (9.1% stake), CMB International (8.8%), GIC (6.1%), OrbiMed and LAV Biosciences Fund (an affiliate of Lilly Asia Ventures). Burning Rock has filed for a Nasdaq IPO with a placeholder $100 million raise. <div class="content-highlight">Unlike IPO hopeful <a href="https://www.smartkarma.com/entities/dada-nexus" target="_blank" data-smartkarma-citation="entities:28961:1" rel="noopener">Dada Nexus (DADA US)</a>, Burning Rock was negatively impacted by the corona pandemic which resulted in a weak 1Q20. The bulls can argue with some merit that the 1Q20 performance is a one-off. On balance, we think that Burning Rock's fundamentals are sound and subject to valuation, will prove attractive to investors despite the negative sentiment around Chinese ADRs.</div>

Burning Rock Biotech (BNR US) is a precision oncology and early cancer detection company. It is China’s number one NGS-based cancer therapy selection company with a 26.7% market share as measured by the number of patients tested in 2019, according to CIC. Burning Rock is backed by Sequoia Capital (9.1% stake), CMB International (8.8%), GIC (6.1%), OrbiMed and LAV Biosciences Fund (an affiliate of Lilly Asia Ventures). Burning Rock has filed for a Nasdaq IPO with a placeholder $100 million raise. Unlike IPO hopeful Dada Nexus (DADA US), Burning Rock was negatively impacted by the corona pandemic which resulted in a weak 1Q20. The bulls can argue with some merit that the 1Q20 performance is a one-off. On balance, we think that Burning Rock's fundamentals are sound and subject to valuation, will prove attractive to investors despite the negative sentiment around Chinese ADRs.

Burning Rock Biotech IPO Initiation: Burning Ambitions

United Kingdom

AstraZeneca PLC operates as a holding company. The Company, through its subsidiaries, researches, manufactures, and sells pharmaceutical and medical products. AstraZeneca focuses its operations on eight therapeutic areas, including gastrointestinal, oncology, cardiovascular, respiratory, central nervous system, pain control, anaesthesia, and infection.

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AstraZeneca (AZN SS)

Pre-IPO RemeGen - Insights on Two Core Products RC18 & RC48

This article analyzed two core products from RemeGen: RC18 and RC 48. The commercialization of these two products would have direct impact on the...

Xinyao (Criss) Wang

Gilead/Immunomedics: Bosom Buddies

Back in April, The FDA recently approved Trodelvy (sacituzumabgovitecan-hziy), an antibody-drug conjugate (ADC), for the treatment of patients...

David Blennerhassett

🇯🇵 JAPAN • Results & Revisions 31st July - Takeda, Yamato/SG, Seria, FP, Keyence, Dai-Ichi Sankyo

CORRECTION - The last day of July saw the TOPIX index fall by 2.8% to reach a new two-month low, 8.2% below the closing high of June 8th. A...

Campbell Gunn

Sido Muncul (SIDO): Immunity Booster

The management has confirmed that the wholesale price for ginger (a key ingredient and natural immunity booster is well known in Indonesia) is much...

Henry Soediarko

Burning Rock Biotech IPO Initiation: Burning Ambitions

Burning Rock Biotech (BNR US) is a precision oncology and early cancer detection company. It is China’s number one NGS-based cancer therapy...

Arun George

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