IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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.

Equity Capital Markets

Hutchmed China Ltd / Equity Capital Markets

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<a href="https://www.smartkarma.com/entities/hutchmed-china-ltd" target="_blank" data-smartkarma-citation="entities:133:1" rel="noopener">Hutchmed China Ltd (13 HK)</a> has launched a $603 million secondary listing on HKEx by offering 104.0 million ordinary shares at a maximum offer price of HK$45.00 per share. Bookbuilding is scheduled to run until the pricing on 23 June. The net proceeds will be used to fund the late-stage clinical programs (savolitinib, surufatinib, fruquintinib, HMPL-689 and HMPL-523), to support further proof-of-concept studies and strengthen commercialisation capabilities.
HutchMed has primary listings on Nasdaq and on UK AIM. The HKEx secondary listing will be supported by five cornerstone investors which will subscribe for HK$2,535 million ($325 million) of the offer shares (54.17% of the offer shares at the maximum offer price). The cornerstone investors are <a href="https://www.smartkarma.com/entities/carlyle-group-inc" target="_blank" data-smartkarma-citation="entities:33402:1" rel="noopener">Carlyle Group Inc (CG US)</a>, CPP Investments, General Atlantic, <a href="https://www.smartkarma.com/entities/hbm-healthcare-investments-ag" target="_blank" data-smartkarma-citation="entities:22373:1" rel="noopener">HBM Healthcare Investments AG (HBMN SW)</a> and CICC Capital.
HutchMed is a China-based, globally focused, biopharma company, active in discovery, development, manufacturing, and commercialisation. The investment case centres on the success of its oncology/immunology platform, which has several near-term clinical and regulatory catalysts from the novel highly selective small molecule (tyrosine kinase inhibitor) pipeline. Notably, in-house discovered drugs, Elunate (fruquintinib) and Sulanda (surufatinib), together with a likely approval for savolitinib, are transforming China prospects. Elunate is performing well in China, with NRDL inclusion boosting volumes. The first global launch is likely to be surufatinib with a US launch targeted for late 2021 or early 2022.
</div><div><div class="content-highlight">In this note, we will look at HutchMed’s potential HK-ADS premium/(discount). As per the norm, HutchMed will price its H-shares at a discount to its ADSs/UK shares to entice investors to participate in the secondary listing. HutchMed pricing its H-shares at a discount of 2-3% to its ADSs will be reasonable, in our view.</div></div>


Hutchmed China Ltd (13 HK) has launched a $603 million secondary listing on HKEx by offering 104.0 million ordinary shares at a maximum offer price of HK$45.00 per share. Bookbuilding is scheduled to run until the pricing on 23 June. The net proceeds will be used to fund the late-stage clinical programs (savolitinib, surufatinib, fruquintinib, HMPL-689 and HMPL-523), to support further proof-of-concept studies and strengthen commercialisation capabilities.
HutchMed has primary listings on Nasdaq and on UK AIM. The HKEx secondary listing will be supported by five cornerstone investors which will subscribe for HK$2,535 million ($325 million) of the offer shares (54.17% of the offer shares at the maximum offer price). The cornerstone investors are Carlyle Group Inc (CG US), CPP Investments, General Atlantic, HBM Healthcare Investments AG (HBMN SW) and CICC Capital.
HutchMed is a China-based, globally focused, biopharma company, active in discovery, development, manufacturing, and commercialisation. The investment case centres on the success of its oncology/immunology platform, which has several near-term clinical and regulatory catalysts from the novel highly selective small molecule (tyrosine kinase inhibitor) pipeline. Notably, in-house discovered drugs, Elunate (fruquintinib) and Sulanda (surufatinib), together with a likely approval for savolitinib, are transforming China prospects. Elunate is performing well in China, with NRDL inclusion boosting volumes. The first global launch is likely to be surufatinib with a US launch targeted for late 2021 or early 2022.
In this note, we will look at HutchMed’s potential HK-ADS premium/(discount). As per the norm, HutchMed will price its H-shares at a discount to its ADSs/UK shares to entice investors to participate in the secondary listing. HutchMed pricing its H-shares at a discount of 2-3% to its ADSs will be reasonable, in our view.

HutchMed Secondary Listing: HK-ADS Premium/​​​(Discount) Views

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

Industry viewpoints:<ul>
<li>Recently, a new document was released by the National Health Care Security Administration about the centralized procurement of high-value medical consumables.</li>
<li>The bidding of the 5th national volume-based purchase (VBP) will be officially opened on June 23, 2021.</li>
<li>The scale of China's rehabilitation therapy industry is growing rapidly.</li>
</ul>Company news:News about the new ultrasound system and updated progress on drugs of <a href="https://www.smartkarma.com/entities/remegen-co-ltd" target="_blank" data-smartkarma-citation="entities:29191:1" rel="noopener">Remegen Co Ltd (9995 HK)</a>, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a>, <a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical Electronics (300760 CH)</a> and <a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a>.Market review:Last week, stock price for healthcare sector in A share decreased 0.81%, while CSI 300 decreased 1.09% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Recently, a new document was released by the National Health Care Security Administration about the centralized procurement of high-value medical consumables.
The bidding of the 5th national volume-based purchase (VBP) will be officially opened on June 23, 2021.
The scale of China's rehabilitation therapy industry is growing rapidly.
Company news:News about the new ultrasound system and updated progress on drugs of Remegen Co Ltd (9995 HK), BeiGene Ltd (6160 HK), Shenzhen Mindray Bio-Medical Electronics (300760 CH) and Jiangsu Hengrui Medicine (600276 CH).Market review:Last week, stock price for healthcare sector in A share decreased 0.81%, while CSI 300 decreased 1.09% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Equity Bottom-Up

At present, although the competition of PD-1/PD-L1 is becoming more and more fierce in China, it has to be admitted that, compared with the global market share of about 55%, domestic monoclonal antibodies only occupy 6% of the biopharmaceutical market share, so there is still a broad space and growth potential. Meanwhile, with PD-1/PD-L1 products of the domestic top four companies (<a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a>, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a>, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> and <a href="https://www.smartkarma.com/entities/shanghai-junshi-bioscience-h" target="_blank" data-smartkarma-citation="entities:27760:1" rel="noopener">Shanghai Junshi Bioscience Co. Ltd. (1877 HK)</a>) being included in medical insurance catalogue, the pricing of PD-1/PD-L1 products of these four companies would be the ceiling for all subsequent homogeneous enterprises. The only companies that are capable of joining the competition are those with the best products and strong commercialization capability. Actually, <a href="https://www.smartkarma.com/entities/akeso-biopharma-inc" target="_blank" data-smartkarma-citation="entities:28830:1" rel="noopener">Akeso Biopharma Inc (9926 HK)</a> could be the very one to challenge the top four. Besides, as a competitive and strong biotech company, Akeso is also moving in the direction of a Big Pharma.

At present, although the competition of PD-1/PD-L1 is becoming more and more fierce in China, it has to be admitted that, compared with the global market share of about 55%, domestic monoclonal antibodies only occupy 6% of the biopharmaceutical market share, so there is still a broad space and growth potential. Meanwhile, with PD-1/PD-L1 products of the domestic top four companies (Jiangsu Hengrui Medicine (600276 CH), BeiGene Ltd (6160 HK), Innovent Biologics Inc (1801 HK) and Shanghai Junshi Bioscience Co. Ltd. (1877 HK)) being included in medical insurance catalogue, the pricing of PD-1/PD-L1 products of these four companies would be the ceiling for all subsequent homogeneous enterprises. The only companies that are capable of joining the competition are those with the best products and strong commercialization capability. Actually, Akeso Biopharma Inc (9926 HK) could be the very one to challenge the top four. Besides, as a competitive and strong biotech company, Akeso is also moving in the direction of a Big Pharma.

Akeso Biopharma Inc (9926.HK) - Could Be the Very One to Challenge the “Top Four”

In February, 2021, China’s National Medical Products Administration (NMPA) granted priority review to the New Drug Application (NDA) for ATG-010 (selinexor, XPOVIO), a first-in-class selective inhibitor of nuclear export (SINE) compound, for the treatment of patients with relapsed/refractory multiple myeloma (rrMM). Recently, <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a> announced that the NMPA has also approved the Investigational New Drug (IND) application for a Phase III clinical trial designed to evaluate the safety and efficacy of selinexor (XPOVIO) in the treatment of advanced or recurrent endometrial cancer (the SIENDO trial). In fact, selinexor would be the first-to-market product in the pipeline and is also a core product for the Company. So, how is this product and what is the business prospect of Antengene?

In February, 2021, China’s National Medical Products Administration (NMPA) granted priority review to the New Drug Application (NDA) for ATG-010 (selinexor, XPOVIO), a first-in-class selective inhibitor of nuclear export (SINE) compound, for the treatment of patients with relapsed/refractory multiple myeloma (rrMM). Recently, Antengene (6996 HK) announced that the NMPA has also approved the Investigational New Drug (IND) application for a Phase III clinical trial designed to evaluate the safety and efficacy of selinexor (XPOVIO) in the treatment of advanced or recurrent endometrial cancer (the SIENDO trial). In fact, selinexor would be the first-to-market product in the pipeline and is also a core product for the Company. So, how is this product and what is the business prospect of Antengene?

Antengene (6996.HK) - Still Has a Long Way to Go Despite the New Progress On Selinexor

On April 28, <a href="https://www.smartkarma.com/entities/lepu-biopharma-co-ltd" target="_blank" data-smartkarma-citation="entities:33231:1" rel="noopener">Lepu Biopharma (LBP HK)</a>, a subsidiary of <a href="https://www.smartkarma.com/entities/lepu-medical-technology-a" target="_blank" data-smartkarma-citation="entities:16654:1" rel="noopener">Lepu Medical Technology A (300003 CH)</a>, submitted its application to the main board of the Hong Kong Stock Exchange for listing. Actually, many companies in the medical device industry are good at capital operation, such as M&amp;A or spin-off and listing, which has been reflected in the leading medical device companies such as <a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical Electronics (300760 CH)</a> and <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a>. However, Lepu Medical is the only one that enters the fields of both drugs and preparations, and according to the pipeline, the focus is not only on generic drugs, but also on biological drugs of higher competitive dimension (e.g. Lepu Biopharma is in this field.). It is also worth mentioning that this is the second company of Lepu factions to be listed in Hong Kong. The first one was <a href="https://www.smartkarma.com/entities/pw-medtech-group-ltd" target="_blank" data-smartkarma-citation="entities:9891:1" rel="noopener">Pw Medtech (1358 HK)</a> (Zhang yue’e is Pu Zhongjie’s wife) and the share price has been very weak since its listing. So can Lepu Biopharma have a better performance?

On April 28, Lepu Biopharma (LBP HK), a subsidiary of Lepu Medical Technology A (300003 CH), submitted its application to the main board of the Hong Kong Stock Exchange for listing. Actually, many companies in the medical device industry are good at capital operation, such as M&amp;A or spin-off and listing, which has been reflected in the leading medical device companies such as Shenzhen Mindray Bio-Medical Electronics (300760 CH) and Microport Scientific (853 HK). However, Lepu Medical is the only one that enters the fields of both drugs and preparations, and according to the pipeline, the focus is not only on generic drugs, but also on biological drugs of higher competitive dimension (e.g. Lepu Biopharma is in this field.). It is also worth mentioning that this is the second company of Lepu factions to be listed in Hong Kong. The first one was Pw Medtech (1358 HK) (Zhang yue’e is Pu Zhongjie’s wife) and the share price has been very weak since its listing. So can Lepu Biopharma have a better performance?

Pre-IPO Lepu Biopharma - There Are Still Many Uncertainties

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)

HutchMed Secondary Listing: HK-ADS Premium/(Discount) Views

HutchMed has launched a $603 million secondary listing on HKEx. In this note, we will look at HutchMed’s potential HK-ADS premium/(discount).

Arun George

China Healthcare Weekly (Jun.11)

The article analyzed the new document about centralized procurement of high-value consumables,the opening of bidding of 5th volume-based...

Xinyao (Criss) Wang

Akeso Biopharma Inc (9926.HK) - Could Be the Very One to Challenge the “Top Four”

This article mainly analyzed Akeso in terms of its core product candidates AK-105, AK-104, AK-112, AK-101, the potential, the business outlook, and...

Xinyao (Criss) Wang

Antengene (6996.HK) - Still Has a Long Way to Go Despite the New Progress On Selinexor

Based on the new progress of the core product candidate ATG-010 (selinexor, XPOVIO), this article analyzed the business prospects, concerns and...

Xinyao (Criss) Wang

Pre-IPO Lepu Biopharma - There Are Still Many Uncertainties

This article analyzed Lepu Biopharma in terms of its core product candidates in the pipeline, the challenges, concerns and future outlook for this...

Xinyao (Criss) Wang

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HutchMed Secondary Listing: HK-ADS Premium/​​​(Discount) Views

HutchMed has launched a $603 million secondary listing on HKEx. In this note, we will look at HutchMed’s potential HK-ADS premium/(discount).

Arun George

China Healthcare Weekly (Jun.11)

The article analyzed the new document about centralized procurement of high-value consumables,the opening of bidding of 5th volume-based...

Xinyao (Criss) Wang

Akeso Biopharma Inc (9926.HK) - Could Be the Very One to Challenge the “Top Four”

This article mainly analyzed Akeso in terms of its core product candidates AK-105, AK-104, AK-112, AK-101, the potential, the business outlook, and...

Xinyao (Criss) Wang

Antengene (6996.HK) - Still Has a Long Way to Go Despite the New Progress On Selinexor

Based on the new progress of the core product candidate ATG-010 (selinexor, XPOVIO), this article analyzed the business prospects, concerns and...

Xinyao (Criss) Wang

Pre-IPO Lepu Biopharma - There Are Still Many Uncertainties

This article analyzed Lepu Biopharma in terms of its core product candidates in the pipeline, the challenges, concerns and future outlook for this...

Xinyao (Criss) Wang

HutchMed Secondary Listing: HK-ADS Premium/(Discount) Views