HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Gracell Biotechnologies Inc / Equity Bottom-Up

<ul>
<li>Ministry of Finance and National Health Commission issued new policy strictly prohibiting public hospitals from borrowing to purchase medical equipment, which will change the investment logic of medical device sector.</li>
<li>“PD-1+ADC” is expected to replace “PD-1+chemotherapy” as the first-line standard therapy. This will be a huge market. So, good story of ADC CDMO (such as WuXi XDC) would continue.</li>
<li>The inspiration that AstraZeneca's acquisition of Gracell brings to investors is IPO isn’t the only way for exit.Being acquired is also good, which will become more important in the future.</li>
</ul>


Ministry of Finance and National Health Commission issued new policy strictly prohibiting public hospitals from borrowing to purchase medical equipment, which will change the investment logic of medical device sector.
“PD-1+ADC” is expected to replace “PD-1+chemotherapy” as the first-line standard therapy. This will be a huge market. So, good story of ADC CDMO (such as WuXi XDC) would continue.
The inspiration that AstraZeneca's acquisition of Gracell brings to investors is IPO isn’t the only way for exit.Being acquired is also good, which will become more important in the future.


China Healthcare Weekly (Dec.31)-New Medical Device Policy, AstraZeneca to Acquire Gracell, PD-1+ADC

Event-Driven

<ul>
<li>This takeover could be at negotiation stage and different parties haven't reached an agreement.When Legend Bio releases official announcement, it means main issues of the deal have been agreed upon.</li>
<li>Genscript will be a big winner if Legend Bio is acquired. Major shareholders would take measures to maximize personal interests.The concern is whether Genscript will offer dividends to small/medium shareholders/investors. </li>
<li>Whether the takeover is successful or not, reasonable valuation of Legend Bio is between US$12.5- US$15 billion. Due to uncertainties, we recommend investors buy Legend Bio directly rather than Genscript.</li>
</ul>


This takeover could be at negotiation stage and different parties haven't reached an agreement.When Legend Bio releases official announcement, it means main issues of the deal have been agreed upon.
Genscript will be a big winner if Legend Bio is acquired. Major shareholders would take measures to maximize personal interests.The concern is whether Genscript will offer dividends to small/medium shareholders/investors. 
Whether the takeover is successful or not, reasonable valuation of Legend Bio is between US$12.5- US$15 billion. Due to uncertainties, we recommend investors buy Legend Bio directly rather than Genscript.


Legend Biotech (LEGN.US) Offer Update - Some New Information About the Takeover Worth the Attention

Shanghai Tofflon Science A / Equity Bottom-Up

<ul>
<li>We have seen four transactions of MNC acquiring Chinese Biotech companies. However, this does not mean that domestic big pharmaceutical companies will also participate in the acquisition of small Biotech.</li>
<li>The underlying investment logic of innovative drug is undergoing changes. Non-oncology fields, such as autoimmunity, CNS, endocrine metabolism, and ophthalmology will be the main hot directions of investment and R&amp;D.</li>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-tofflon-science-a" target="_blank" data-smartkarma-citation="entities:15970:1" rel="noopener">Shanghai Tofflon Science A (300171 CH)</a> is still in downward trend. We’re not optimistic about its 2023 results. We don’t recommend bottom-fish this stock unless there is a major catalyst.</li>
</ul>


We have seen four transactions of MNC acquiring Chinese Biotech companies. However, this does not mean that domestic big pharmaceutical companies will also participate in the acquisition of small Biotech.
The underlying investment logic of innovative drug is undergoing changes. Non-oncology fields, such as autoimmunity, CNS, endocrine metabolism, and ophthalmology will be the main hot directions of investment and R&amp;D.

Shanghai Tofflon Science A (300171 CH) is still in downward trend. We’re not optimistic about its 2023 results. We don’t recommend bottom-fish this stock unless there is a major catalyst.


China Healthcare Weekly (Apr.21) - M&As in Biotech, Capital Is Bullish on Non-Tumor Sectors, Tofflon

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

Cargo Therapeutics / Equity Capital Markets

<ul>
<li>CARGO Therapeutics, a clinical-stage biotech company developing treatments for various lymphomas, filed for an IPO to fund its Phase 2 clinical trials of CRG-022, a lead program in the pipeline. </li>
<li>The biotech firm was backed by founding investor Samsara BioCapital and top-tier healthcare VC firms, including Third Rock Ventures, Perceptive Advisors, and Nextech Invest.</li>
<li>The company’s lead program, CRG-022, is focused on patients with large B-cell lymphoma whose disease relapsed and targets CD-22 that has been expressed in 81% to 100% of DLBCL patients. </li>
</ul>


CARGO Therapeutics, a clinical-stage biotech company developing treatments for various lymphomas, filed for an IPO to fund its Phase 2 clinical trials of CRG-022, a lead program in the pipeline. 
The biotech firm was backed by founding investor Samsara BioCapital and top-tier healthcare VC firms, including Third Rock Ventures, Perceptive Advisors, and Nextech Invest.
The company’s lead program, CRG-022, is focused on patients with large B-cell lymphoma whose disease relapsed and targets CD-22 that has been expressed in 81% to 100% of DLBCL patients. 


CARGO Therapeutics IPO Preview: A Promising Pipeline of Next-Gen CAR T-Cell Therapies

<ul>
<li>The latest data of GC012F/GC007g at ASCO/EHA drove up share price, but the current clinical data do not necessarily guarantee the final druggability. So, we advise investors to be rational.</li>
<li>Gracell's pipeline may not solve the real pain points of CAR-T therapy. Until the global momentum of cell therapy is reversed, there's no need to expect too much from Gracell.</li>
<li>Gracell's stock price would continue to fluctuate with positive clinical data or progress. However, the liquidity of this stock isn't good. In this situation, both ups and downs are meaningless. </li>
</ul>


The latest data of GC012F/GC007g at ASCO/EHA drove up share price, but the current clinical data do not necessarily guarantee the final druggability. So, we advise investors to be rational.
Gracell's pipeline may not solve the real pain points of CAR-T therapy. Until the global momentum of cell therapy is reversed, there's no need to expect too much from Gracell.
Gracell's stock price would continue to fluctuate with positive clinical data or progress. However, the liquidity of this stock isn't good. In this situation, both ups and downs are meaningless. 


Gracell Biotechnologies Inc (GRCL.US) - May Fail to Solve the Real Pain Points in CAR-T Field

United States

Gracell Biotechnologies Inc. operates as a clinical-stage biopharmaceutical company. The Company focuses on discovering and developing cell therapies to address medical needs in the treatment of cancer. Gracell Biotechnologies aims to disrupt conventional approaches to CAR-T cell therapies with technology platforms-FasTCAR and TruUCAR.

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Gracell Biotechnologies Inc (GRCL US)

China Healthcare Weekly (Dec.31)-New Medical Device Policy, AstraZeneca to Acquire Gracell, PD-1+ADC

As new policy prohibits public hospitals from borrowing to purchase medical device, investment logic changes. AZ-Gracell deal has epoch-making...

Xinyao (Criss) Wang

Legend Biotech (LEGN.US) Offer Update - Some New Information About the Takeover Worth the Attention

The potential takeover seems reliable.Genscript will be a big winner but it's uncertain whether Genscript will offer dividends to small/medium...

Xinyao (Criss) Wang

China Healthcare Weekly (Apr.21) - M&As in Biotech, Capital Is Bullish on Non-Tumor Sectors, Tofflon

MNCs acquiring Chinese biotech companies, but domestic big pharma may not follow suit.Investment focus shifting to non-oncology fields.Tofflon is...

Xinyao (Criss) Wang

CARGO Therapeutics IPO Preview: A Promising Pipeline of Next-Gen CAR T-Cell Therapies

A VC-backed biotech firm CARGO Therapeutics filed for an IPO. The company develops CAR T-cell products for adult patients with relapsed or...

Andrei Zakharov