HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>HUTCHMED entered into an exclusive license agreement with Takeda- HUTCHMED will receive up to US$1.13 billion including US$400 million upfront, the third highest upfront among China’s TOP 10 license-out deals.</li>
<li>Even if fruquintinib may probably not become a blockbuster product in the future, HUTCHMED still gets a decent upfront to relieve its cash flow pressure and an internationalization admission ticket.</li>
<li>
<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>is undervalued based on our sales forecast. After savolitinib has been included in the updated NRDL, this year’s performance growth is worth looking forward to.</li>
</ul>


HUTCHMED entered into an exclusive license agreement with Takeda- HUTCHMED will receive up to US$1.13 billion including US$400 million upfront, the third highest upfront among China’s TOP 10 license-out deals.
Even if fruquintinib may probably not become a blockbuster product in the future, HUTCHMED still gets a decent upfront to relieve its cash flow pressure and an internationalization admission ticket.

Hutchmed China Ltd (13 HK) is undervalued based on our sales forecast. After savolitinib has been included in the updated NRDL, this year’s performance growth is worth looking forward to.


Hutchmed China Ltd (13.HK/HCM.US) - The $1.13B Eye-Catching Deal with Takeda and the New Outlook

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

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.

<ul>
<li>Takeda announced Monday that it has entered into an exclusive licensing agreement with HUTCHMED (China) for further development and commercialisation of Fruquintinib outside of Mainland China, Macau and Hong Kong.</li>
<li>Takeda will pay HUTCHMED $400m upfront and up to $730m in additional potential payments relating to regulatory, development and commercial sales milestones, as well as royalties on net sales.</li>
<li>Fruquintinib was approved in China in 2018, is a highly selective, oral VEGFR1/2/3 Tyrosine Kinase Inhibitor and offers potential new treatment option for patients with refractory metastatic colorectal cancer (CRC).</li>
</ul>


Takeda announced Monday that it has entered into an exclusive licensing agreement with HUTCHMED (China) for further development and commercialisation of Fruquintinib outside of Mainland China, Macau and Hong Kong.
Takeda will pay HUTCHMED $400m upfront and up to $730m in additional potential payments relating to regulatory, development and commercial sales milestones, as well as royalties on net sales.
Fruquintinib was approved in China in 2018, is a highly selective, oral VEGFR1/2/3 Tyrosine Kinase Inhibitor and offers potential new treatment option for patients with refractory metastatic colorectal cancer (CRC).


Takeda Strengthens Oncology Portfolio with HUTCHMED’s Fruquintinib Acquisition

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>Wuxi Biologics Holdings is looking to raise up to US$513m by selling about 1.3% of <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK). </a>
</li>
<li>This is the company's 16th placement since it listed in June 2017. </li>
<li>In this note, we will discuss deal dynamics, past deal performance, and share the scores on our ECM framework.</li>
</ul>


Wuxi Biologics Holdings is looking to raise up to US$513m by selling about 1.3% of Wuxi Biologics (2269 HK). 

This is the company's 16th placement since it listed in June 2017. 
In this note, we will discuss deal dynamics, past deal performance, and share the scores on our ECM framework.


Wuxi Biologics Placement - Lesser Discount than Recent Deals but Still Looks Good

Thematic (Sector/Industry)

<ul>
<li>This year's NRDL negotiations could be a turnaround. If the final result really shows a moderate price decline, it will be “a landmark event” for the innovative drug industry.</li>
<li>Starting from 23Q2, with the peak of respiratory disease/COVID-19 outbreak past, the demand for related TCM would weaken. Then, the pullback of TCM would really begin.</li>
<li>Even if biotech initially tells the story of becoming a biopharma to obtain financing, it will not be realized in the end.</li>
</ul>


This year's NRDL negotiations could be a turnaround. If the final result really shows a moderate price decline, it will be “a landmark event” for the innovative drug industry.
Starting from 23Q2, with the peak of respiratory disease/COVID-19 outbreak past, the demand for related TCM would weaken. Then, the pullback of TCM would really begin.
Even if biotech initially tells the story of becoming a biopharma to obtain financing, it will not be realized in the end.


China Healthcare Weekly (Jan.1) - NRDL Negotiation Turnaround, Pullback of TCM, Biotech Sales System

<ul>
<li>Medical Insurance Bureau of Hebei released the document on centralized procurement of OK lens, which was the first detailed rules about OK lens VBP in China.</li>
<li>The results of orthodontic material centralized procurement of 16 provincial alliance led by Shaanxi were released. We analyzed the direct impacts on <a href="https://www.smartkarma.com/entities/angelalign-technology-inc" target="_blank" data-smartkarma-citation="entities:31480:1" rel="noopener">Angelalign Technology (6699 HK)</a> and the outlook.</li>
<li>Even from the perspective of the whole process of the development of China's pharmaceutical industry after the reform and opening up, 2022 is an extraordinary year for the pharmaceutical industry.</li>
</ul>


Medical Insurance Bureau of Hebei released the document on centralized procurement of OK lens, which was the first detailed rules about OK lens VBP in China.
The results of orthodontic material centralized procurement of 16 provincial alliance led by Shaanxi were released. We analyzed the direct impacts on Angelalign Technology (6699 HK) and the outlook.
Even from the perspective of the whole process of the development of China's pharmaceutical industry after the reform and opening up, 2022 is an extraordinary year for the pharmaceutical industry.


China Healthcare Weekly (Dec.25) - OK Lens VBP, Angelalign, Extraordinary 2022 for Pharmaceuticals

Hong Kong

HUTCHMED (China) Limited develops, manufactures, and sells pharmaceutical products. The Company offers drugs for oncology and autoimmune diseases treatment. HUTCHMED (China) markets its products worldwide.

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Hutchmed China Ltd (13 HK)