Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

WuXi XDC Cayman  / Equity Capital Markets

<ul>
<li>WuXi XDC set terms for an upcoming IPO: the fast-growing CRDMO offers 178.4M shares at the price range of HK$19.90-HK$20.60, implying a market cap of ~HK$23.9B (~$3B) at the midpoint. </li>
<li>Cornerstone investors agreed to subscribe and buy ~116M shares, assuming the IPO price of HK$20.25 at the midpoint. WuXi XDC shares will begin trading on Friday, November 17. </li>
<li>My PT of HK$25.57 implies a ~26% upside to the IPO price at the midpoint. WuXi XDC’s premium multiples reflect 100%+ top-line growth and the company’s leadership position. </li>
</ul>


WuXi XDC set terms for an upcoming IPO: the fast-growing CRDMO offers 178.4M shares at the price range of HK$19.90-HK$20.60, implying a market cap of ~HK$23.9B (~$3B) at the midpoint. 
Cornerstone investors agreed to subscribe and buy ~116M shares, assuming the IPO price of HK$20.25 at the midpoint. WuXi XDC shares will begin trading on Friday, November 17. 
My PT of HK$25.57 implies a ~26% upside to the IPO price at the midpoint. WuXi XDC’s premium multiples reflect 100%+ top-line growth and the company’s leadership position. 


WuXi XDC IPO Valuation Analysis: Premium Multiples Reflect 100%+ Top-Line Growth

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ono-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:8979:1" rel="noopener">Ono Pharmaceutical (4528 JP)</a> reported double-digit growth in revenue, operating profit, and net profit in H1FY24. Opdivo recorded revenue of ¥75B (+7% YoY). Forxiga revenue jumped 36% YoY to ¥36B.</li>
<li>Encouraged by strong performance of Forxiga and receipt of lump-sum income associated with the patent litigation settlement, Ono has raised FY24 guidance by mid-to-high single-digit percentage across all the parameters.</li>
<li>The company aims to overcome Opdivo patent cliff and accelerate growth by launching multiple products in the U.S. and Europe with large addressable markets.</li>
</ul>



Ono Pharmaceutical (4528 JP) reported double-digit growth in revenue, operating profit, and net profit in H1FY24. Opdivo recorded revenue of ¥75B (+7% YoY). Forxiga revenue jumped 36% YoY to ¥36B.
Encouraged by strong performance of Forxiga and receipt of lump-sum income associated with the patent litigation settlement, Ono has raised FY24 guidance by mid-to-high single-digit percentage across all the parameters.
The company aims to overcome Opdivo patent cliff and accelerate growth by launching multiple products in the U.S. and Europe with large addressable markets.


Ono Pharmaceutical (4528 JP): Record H1 Earnings; Forxiga Is Flying High; FY24 Guidance Updated

<ul>
<li>WuXi XDC, a leading CRDMO focused on the global ADC and bioconjugate market, filed to go public in Hong Kong and plans to raise up to <strong>$500M</strong>.</li>
<li>The company is expected to IPO in November or December at the latest. Morgan Stanley, Goldman Sachs, and J.P. Morgan are the lead underwriters. The offering may attract investor interest.</li>
<li>WuXi Biologics will spin off its ADC business, and WuXi XDC will raise capital through IPO to finance the construction of new facilities in Singapore and expand capacity in China.</li>
</ul>


WuXi XDC, a leading CRDMO focused on the global ADC and bioconjugate market, filed to go public in Hong Kong and plans to raise up to $500M.
The company is expected to IPO in November or December at the latest. Morgan Stanley, Goldman Sachs, and J.P. Morgan are the lead underwriters. The offering may attract investor interest.
WuXi Biologics will spin off its ADC business, and WuXi XDC will raise capital through IPO to finance the construction of new facilities in Singapore and expand capacity in China.


WuXi XDC IPO Preview: The Rapid Rise of The Business In The Global ADC and Bioconjugate Market

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daiichi-sankyo-co-ltd" target="_blank" data-smartkarma-citation="entities:3014:1" rel="noopener">Daiichi Sankyo (4568 JP)</a> reported strong H1FY24 results, with double-digit growth in revenue, core operating profit, and net profit, mainly driven by its global mainstay product Enhertu.</li>
<li>Daiichi Sankyo and Merck entered into a global development and commercialization agreement for three of Daiichi Sankyo’s drug candidates, for a total potential consideration of up to $22 billion.</li>
<li>Daiichi Sankyo has raised FY24 revenue, core operating profit, and net profit forecast by 7%, 11%, and 17%, respectively. FY24 revenue is expected to grow 21% YoY to ¥1,550 billion.</li>
</ul>



Daiichi Sankyo (4568 JP) reported strong H1FY24 results, with double-digit growth in revenue, core operating profit, and net profit, mainly driven by its global mainstay product Enhertu.
Daiichi Sankyo and Merck entered into a global development and commercialization agreement for three of Daiichi Sankyo’s drug candidates, for a total potential consideration of up to $22 billion.
Daiichi Sankyo has raised FY24 revenue, core operating profit, and net profit forecast by 7%, 11%, and 17%, respectively. FY24 revenue is expected to grow 21% YoY to ¥1,550 billion.


Daiichi Sankyo (4568 JP): Landmark ADC Deal Pushes FY24 Revenue Guidance Higher

Hansoh Pharmaceutical Group  / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group-co" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical Group (3692 HK)</a> entered into a license agreement with <a href="https://www.smartkarma.com/entities/glaxosmithkline-plc" target="_blank" data-smartkarma-citation="entities:21960:1" rel="noopener">GlaxoSmithKline PLC (GSK LN)</a> for a B7-H4 targeted antibody-drug conjugate candidate, HS-20089, targeted toward gynecological cancers.  </li>
<li>Hansoh will receive an upfront payment of $85M and be eligible to receive milestone payments of up to $1.485B subject to achievement of relevant milestone events with respect to HS-20089.</li>
<li>Currently, HS-20089 is in phase 1 clinical trial in China. GSK plans to begin phase 1 trial of HS-20089 outside of China in 2024.</li>
</ul>



Hansoh Pharmaceutical Group (3692 HK) entered into a license agreement with GlaxoSmithKline PLC (GSK LN) for a B7-H4 targeted antibody-drug conjugate candidate, HS-20089, targeted toward gynecological cancers.  
Hansoh will receive an upfront payment of $85M and be eligible to receive milestone payments of up to $1.485B subject to achievement of relevant milestone events with respect to HS-20089.
Currently, HS-20089 is in phase 1 clinical trial in China. GSK plans to begin phase 1 trial of HS-20089 outside of China in 2024.


Hansoh Pharmaceutical (3692 HK): New Licensing Deal Boosts Conviction on Innovative Pipeline Prowess

United States

Merck & Co., Inc.  is a global health care company that delivers health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products, which it markets directly and through its joint ventures. The Company has operations in pharmaceutical, animal health, and consumer care.

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Merck & Co (MRK US)

WuXi XDC IPO Valuation Analysis: Premium Multiples Reflect 100%+ Top-Line Growth

WuXi XDC set terms for an upcoming IPO in Hong Kong. The company plans to raise ~$470M, and the IPO price range implies a market cap of ~$3B at the...

Andrei Zakharov

Ono Pharmaceutical (4528 JP): Record H1 Earnings; Forxiga Is Flying High; FY24 Guidance Updated

Ono Pharma reported double-digit growth in revenue, operating profit, and net profit in H1FY24. The company has raised FY24 guidance by mid-to-high...

Tina Banerjee

WuXi XDC IPO Preview: The Rapid Rise of The Business In The Global ADC and Bioconjugate Market

WuXi XDC filed to go public in Hong Kong. A rare combination of explosive growth and profitability makes the IPO attractive for investors

Andrei Zakharov

Daiichi Sankyo (4568 JP): Landmark ADC Deal Pushes FY24 Revenue Guidance Higher

Recent drug development deal calls for total potential consideration of up to $22B. Daiichi Sankyo raised FY24 sales, core operating profit, and...

Tina Banerjee

Hansoh Pharmaceutical (3692 HK): New Licensing Deal Boosts Conviction on Innovative Pipeline Prowess

Hansoh Pharma will receive an upfront payment of $85M and potential milestone payments of up to $1.485B. The licensed drug candidate is currently...

Tina Banerjee

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WuXi XDC IPO Valuation Analysis: Premium Multiples Reflect 100%+ Top-Line Growth

WuXi XDC set terms for an upcoming IPO in Hong Kong. The company plans to raise ~$470M, and the IPO price range implies a market cap of ~$3B at the...

Andrei Zakharov

Ono Pharmaceutical (4528 JP): Record H1 Earnings; Forxiga Is Flying High; FY24 Guidance Updated

Ono Pharma reported double-digit growth in revenue, operating profit, and net profit in H1FY24. The company has raised FY24 guidance by mid-to-high...

Tina Banerjee

WuXi XDC IPO Preview: The Rapid Rise of The Business In The Global ADC and Bioconjugate Market

WuXi XDC filed to go public in Hong Kong. A rare combination of explosive growth and profitability makes the IPO attractive for investors

Andrei Zakharov

Daiichi Sankyo (4568 JP): Landmark ADC Deal Pushes FY24 Revenue Guidance Higher

Recent drug development deal calls for total potential consideration of up to $22B. Daiichi Sankyo raised FY24 sales, core operating profit, and...

Tina Banerjee

Hansoh Pharmaceutical (3692 HK): New Licensing Deal Boosts Conviction on Innovative Pipeline Prowess

​Hansoh Pharma will receive an upfront payment of $85M and potential milestone payments of up to $1.485B. The licensed drug candidate is currently...

Tina Banerjee

Hansoh Pharma will receive an upfront payment of $85M and potential milestone payments of up to $1.485B. The licensed drug candidate is currently...