Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>Revolution Medicines, an American oncology-focused biotechnology company, has made considerable progress in developing therapies for patients with RAS-addicted cancers.</li>
<li>We launched coverage of the stock In November 2023 and added Revolution Medicines to our high conviction list of ideas.</li>
<li>RevMed shares has massively outperformed in 2024 with shares up ~92% YTD vs. a ~12% gain on the XBI. I established a $55 PT and see the valuation as full. </li>
</ul>


Revolution Medicines, an American oncology-focused biotechnology company, has made considerable progress in developing therapies for patients with RAS-addicted cancers.
We launched coverage of the stock In November 2023 and added Revolution Medicines to our high conviction list of ideas.
RevMed shares has massively outperformed in 2024 with shares up ~92% YTD vs. a ~12% gain on the XBI. I established a $55 PT and see the valuation as full. 


2023 High Conviction Update: Revolution Medicines, Time To Take Profits?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>China healthcare can be mainly divided into the following segments: pharmaceuticals, medical devices, medical services, To B Supply Chain. Investment logic and business characteristics in these fields are completely different.</li>
<li>“High standardization+low dependence on doctors” help pharmaceuticals gain a more favorable commercial value than medical devices in distribution process. Profit margin/cross-regional expansion capability of medical services have always been questioned.</li>
<li>The business characteristics of “To B supply chain” indicate strong cyclical characteristics due to supply rigidity and demand fluctuations, which are easily affected by changes in demand trends.</li>
</ul>


China healthcare can be mainly divided into the following segments: pharmaceuticals, medical devices, medical services, To B Supply Chain. Investment logic and business characteristics in these fields are completely different.
“High standardization+low dependence on doctors” help pharmaceuticals gain a more favorable commercial value than medical devices in distribution process. Profit margin/cross-regional expansion capability of medical services have always been questioned.
The business characteristics of “To B supply chain” indicate strong cyclical characteristics due to supply rigidity and demand fluctuations, which are easily affected by changes in demand trends.


The “Game Rule” of China Healthcare - Pharmaceuticals Vs Medical Devices Vs Medical Services

<ul>
<li>Although both Republicans and Democrats have policies related to supply chain security/lowering drug prices, they have taken different approaches. Harris is likely to be “a continuation of the Biden policy”. </li>
<li>Harris would continue Biden’s strategy of “wooing India to contain China” and developing a pro-US supply chain system that isolates China.Her future policy direction may be more "predictable" than Trump's.</li>
<li>Whether Trump or Harris is elected as President of the US, there's a high possibility that the US will continue to confront China in the fields of biosecurity and biotechnology.</li>
</ul>


Although both Republicans and Democrats have policies related to supply chain security/lowering drug prices, they have taken different approaches. Harris is likely to be “a continuation of the Biden policy”. 
Harris would continue Biden’s strategy of “wooing India to contain China” and developing a pro-US supply chain system that isolates China.Her future policy direction may be more "predictable" than Trump's.
Whether Trump or Harris is elected as President of the US, there's a high possibility that the US will continue to confront China in the fields of biosecurity and biotechnology.


What Does a Kamala Harris Presidency Mean for China Healthcare?

Shenyang Xingqi Pharmaceutical / Equity Bottom-Up

<ul>
<li>The 10th national VBP has started. Kelun Pharma, Fosun Pharma and CSPC are expected to be the big pharmaceutical companies that get hit most in this VBP.</li>
<li>For biopharmaceutical companies, rather than R&amp;D technology, revenue scale is the most important moat. Accordingly, we recommend to invest medium and large biotech that are currently scaling up.</li>
<li>Xingqi’s share price decline is related to the potential lower-than-expected performance in 24Q3. Sales expansion of 0.01% atropine eye drops takes time considering the difficulty of new drug hospital admission.</li>
</ul>


The 10th national VBP has started. Kelun Pharma, Fosun Pharma and CSPC are expected to be the big pharmaceutical companies that get hit most in this VBP.
For biopharmaceutical companies, rather than R&amp;D technology, revenue scale is the most important moat. Accordingly, we recommend to invest medium and large biotech that are currently scaling up.
Xingqi’s share price decline is related to the potential lower-than-expected performance in 24Q3. Sales expansion of 0.01% atropine eye drops takes time considering the difficulty of new drug hospital admission.


China Healthcare Weekly (Oct.27)-10th National VBP, Revenue Scale Is the Only Moat, Xingqi’s Outlook

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics (207940 KS)</a> signed a contract manufacturing agreement worth KRW1.7T ($1.2B) with an Asian pharmaceutical company. <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> has announced KRW100B ($72M) share buyback, starting October 28.</li>
<li>
<a href="https://www.smartkarma.com/entities/astellas-pharma-inc" target="_blank" data-smartkarma-citation="entities:6091:1" rel="noopener">Astellas Pharma (4503 JP)</a> received FDA approval for Vyloy for gastric cancer. <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi &amp; Co (4507 JP)</a> received FDA Fast Track designation for its RSV drug candidate, S-337395.</li>
<li>
<a href="https://www.smartkarma.com/entities/zai-lab-ltd-94df40cf-c15e-462f-b3de-8d2d434ae935" target="_blank" data-smartkarma-citation="entities:36261:1" rel="noopener">Zai Lab (9688 HK)</a> announced positive topline data from global Phase 1a/1b study of ZL-1310 in small cell lung cancer. <a href="https://www.smartkarma.com/entities/legend-biotech-corp" target="_blank" data-smartkarma-citation="entities:28963:1" rel="noopener">Legend Biotech Corp (LEGN US)</a> sheds Genscript Biotech as its majority shareholder.</li>
</ul>



Samsung Biologics (207940 KS) signed a contract manufacturing agreement worth KRW1.7T ($1.2B) with an Asian pharmaceutical company. Celltrion Inc (068270 KS) has announced KRW100B ($72M) share buyback, starting October 28.

Astellas Pharma (4503 JP) received FDA approval for Vyloy for gastric cancer. Shionogi &amp; Co (4507 JP) received FDA Fast Track designation for its RSV drug candidate, S-337395.

Zai Lab (9688 HK) announced positive topline data from global Phase 1a/1b study of ZL-1310 in small cell lung cancer. Legend Biotech Corp (LEGN US) sheds Genscript Biotech as its majority shareholder.


APAC Healthcare Weekly (Oct 27)- Samsung Biologics, Celltrion, Astellas, Otsuka, Legend, and Zai Lab

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)

2023 High Conviction Update: Revolution Medicines, Time To Take Profits?

I remove Revolution Medicines stock from my high conviction list of ideas due to achieving a $55.00 price target and full valuation relative to peers.

Andrei Zakharov

The “Game Rule” of China Healthcare - Pharmaceuticals Vs Medical Devices Vs Medical Services

China healthcare has distinct segments with different investment logic/characteristics.The pecking order is drugs>medical device>medical...

Xinyao (Criss) Wang

What Does a Kamala Harris Presidency Mean for China Healthcare?

Harris could be “a continuation of Biden's policy” , making her future policy direction more "predictable" .But the US will continue to confront...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.27)-10th National VBP, Revenue Scale Is the Only Moat, Xingqi’s Outlook

10th national VBP will impact big pharma like Kelun/Fosun/CSPC.Revenue scale is the only moat for pharma company.Xingqi's 24Q3 results may be...

Xinyao (Criss) Wang

APAC Healthcare Weekly (Oct 27)- Samsung Biologics, Celltrion, Astellas, Otsuka, Legend, and Zai Lab

Samsung Biologics secures largest ever contract, Celltrion announced KRW100B buyback, Astellas Pharma got label expansion approval for Vyloy,...

Tina Banerjee

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2023 High Conviction Update: Revolution Medicines, Time To Take Profits?

I remove Revolution Medicines stock from my high conviction list of ideas due to achieving a $55.00 price target and full valuation relative to peers.

Andrei Zakharov

The “Game Rule” of China Healthcare - Pharmaceuticals Vs Medical Devices Vs Medical Services

​China healthcare has distinct segments with different investment logic/characteristics.The pecking order is drugs>medical device>medical...

Xinyao (Criss) Wang

What Does a Kamala Harris Presidency Mean for China Healthcare?

Harris could be “a continuation of Biden's policy” , making her future policy direction more "predictable" .But the US will continue to confront...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.27)-10th National VBP, Revenue Scale Is the Only Moat, Xingqi’s Outlook

​10th national VBP will impact big pharma like Kelun/Fosun/CSPC.Revenue scale is the only moat for pharma company.Xingqi's 24Q3 results may be...

Xinyao (Criss) Wang

APAC Healthcare Weekly (Oct 27)- Samsung Biologics, Celltrion, Astellas, Otsuka, Legend, and Zai Lab

Samsung Biologics secures largest ever contract, Celltrion announced KRW100B buyback, Astellas Pharma got label expansion approval for Vyloy,...

Tina Banerjee

China healthcare has distinct segments with different investment logic/characteristics.The pecking order is drugs>medical device>medical...

10th national VBP will impact big pharma like Kelun/Fosun/CSPC.Revenue scale is the only moat for pharma company.Xingqi's 24Q3 results may be...