HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>NRDL negotiation has completely changed the pricing method/valuation logic of innovative drugs. Even if price reduction could be milder this year, it’s hard to reverse the shrinking market size/slowing growth.</li>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> has successively acquired several factories/production facilities built by domestic biotech companies at low cost. However, we have several concerns.</li>
<li>The industry is in the process of understanding and adapting to various changes. The model capital envisioned for biotech to both develop and then commercialize drugs successfully doesn’t work anymore.</li>
</ul>


NRDL negotiation has completely changed the pricing method/valuation logic of innovative drugs. Even if price reduction could be milder this year, it’s hard to reverse the shrinking market size/slowing growth.

Wuxi Biologics (2269 HK) has successively acquired several factories/production facilities built by domestic biotech companies at low cost. However, we have several concerns.
The industry is in the process of understanding and adapting to various changes. The model capital envisioned for biotech to both develop and then commercialize drugs successfully doesn’t work anymore.


China Healthcare Weekly (Nov25)-Wuxi Biologics, Valuation Logic Changed by NRDL, Biotech Model Fails

Thematic (Sector/Industry)

<ul>
<li>The government issued a central infrastructure investment budget of RMB26.52 billion in healthcare sector for 2022. Related leading domestic manufacturers would maintain relatively stable growth in the next 2-3 years.</li>
<li>Behind the wave of import substitution of endoscopes, the demand for anesthetic drugs would also increase, which are not affected by VBP. We think this market deserves investors’ attention.</li>
<li>Considering the large number of insomniacs, the resulting demand for treatment makes the insomniacs market show a good growth prospect.</li>
</ul>


The government issued a central infrastructure investment budget of RMB26.52 billion in healthcare sector for 2022. Related leading domestic manufacturers would maintain relatively stable growth in the next 2-3 years.
Behind the wave of import substitution of endoscopes, the demand for anesthetic drugs would also increase, which are not affected by VBP. We think this market deserves investors’ attention.
Considering the large number of insomniacs, the resulting demand for treatment makes the insomniacs market show a good growth prospect.


China Healthcare Weekly (Nov.18) - Central Investment Budget, Anesthetic Drugs, Insomniacs Demand

<ul>
<li>The "Spring Coil Alliance Centralized Procurement" in 21 provinces led by Jilin is about to start. Such large-scale centralized procurement has certain reference significance for future nationwide centralized procurement expansion.</li>
<li>The rules and varieties of 8th national VBP could change, and biological drugs may be included in VBP together with chemical drugs.</li>
<li>The US FDA has recently tightened the policy of accelerated approval, which is correct, because at present, pharmaceutical enterprises are trying to “exploit loopholes”.</li>
</ul>


The "Spring Coil Alliance Centralized Procurement" in 21 provinces led by Jilin is about to start. Such large-scale centralized procurement has certain reference significance for future nationwide centralized procurement expansion.
The rules and varieties of 8th national VBP could change, and biological drugs may be included in VBP together with chemical drugs.
The US FDA has recently tightened the policy of accelerated approval, which is correct, because at present, pharmaceutical enterprises are trying to “exploit loopholes”.


China Healthcare Weekly (Nov.11)-Largest Spring Coil VBP; Biological Drug VBP; FDA Changes Game Rule

Articles from Caixin Global, Caixin Global

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Articles from Caixin Global

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Cross Asset Strategy

<ul><li>Power / Cover Story: The dilemma of China’s power market restructuring</li><li>Policy / Xi Jinping repeats China’s commitment to opening-up policy</li><li>Covid-19 / Beijing shames local authorities for ‘one-size-fits-all’ Covid policies</li></ul>

Power / Cover Story: The dilemma of China’s power market restructuringPolicy / Xi Jinping repeats China’s commitment to opening-up policyCovid-19 / Beijing shames local authorities for ‘one-size-fits-all’ Covid policies

CX Daily: The Dilemma of China’s Power Market Restructuring

<ul>
<li>The driving force for the big performance growth of domestic culture medium companies mainly come from the logic of import substitution. We think there are investment opportunities in this industry.</li>
<li>Due to soaring costs of electricity prices, raw material prices and transportation costs, European pharmaceutical plants are facing difficulties in sustaining production. Chinese API enterprises could face expansion opportunities.</li>
<li>For industries that have been recognized by investors,the market begins to think in terms of long logic from a broader perspective rather than simply tracking the performance of individual companies.</li>
</ul>


The driving force for the big performance growth of domestic culture medium companies mainly come from the logic of import substitution. We think there are investment opportunities in this industry.
Due to soaring costs of electricity prices, raw material prices and transportation costs, European pharmaceutical plants are facing difficulties in sustaining production. Chinese API enterprises could face expansion opportunities.
For industries that have been recognized by investors,the market begins to think in terms of long logic from a broader perspective rather than simply tracking the performance of individual companies.


China Healthcare Weekly (Nov4)-Opportunity in Culture Medium, European API, Long Logic of Investment

China

BeiGene, Ltd. operates as a commercial stage biopharmaceutical company. The Company focuses on discovery, development, and commercialization of molecularly targeted and immuno-oncology drugs for the treatment of cancer. BeiGene serves patients worldwide.

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BeiGene (BGNE US)

China Healthcare Weekly (Nov25)-Wuxi Biologics, Valuation Logic Changed by NRDL, Biotech Model Fails

NRDL negotiation completely changes the valuation logic of innovative drug. We've some concerns about WuXi Bio's new business updates. The model...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.18) - Central Investment Budget, Anesthetic Drugs, Insomniacs Demand

New central infrastructure investment budget means stable growth of medical devices; Anesthetic drugs are not affected by VBP, which deserves...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.11)-Largest Spring Coil VBP; Biological Drug VBP; FDA Changes Game Rule

The largest spring coil VBP led by Jilin has certain reference significance. Biological drugs may be included in 8th national VBP.After FDA changes...

Xinyao (Criss) Wang

CX Daily: The Dilemma of China’s Power Market Restructuring

Cover Story: The dilemma of China’s power market restructuring. Xi Jinping repeats China’s commitment to opening-up policy

Caixin Global

China Healthcare Weekly (Nov4)-Opportunity in Culture Medium, European API, Long Logic of Investment

Culture medium will have a rapid growth period. Due to high costs, EU Pharma face difficulty in sustaining production.Mr Market begins to think...

Xinyao (Criss) Wang

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