HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<p>On February 24, 2021, <a href="https://www.smartkarma.com/entities/apollomics-inc" target="_blank" data-smartkarma-citation="entities:32186:1" rel="noopener">Apollomics Inc (1435488D US)</a> applied to be listed on the main board of the Hong Kong Stock Exchange. The Company is an innovative biotechnology company focusing on the discovery and development of oncology therapies. Apollomics intends to use the proceeds of this fundraising for R&amp;D activities, preparation for registration filings, commercial process development, manufacturing registrational trial material, expansion of business and other general corporate purposes. The following mainly provided insights on its major products in the pipeline.</p>

On February 24, 2021, Apollomics Inc (1435488D US) applied to be listed on the main board of the Hong Kong Stock Exchange. The Company is an innovative biotechnology company focusing on the discovery and development of oncology therapies. Apollomics intends to use the proceeds of this fundraising for R&amp;D activities, preparation for registration filings, commercial process development, manufacturing registrational trial material, expansion of business and other general corporate purposes. The following mainly provided insights on its major products in the pipeline.

Pre-IPO Apollomics - Concerns on Competition and Commercialization Despite Some Promising Products

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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.

Sciclone Pharmaceuticals / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/sciclone-pharmaceuticals-holdings-limited" target="_blank" data-smartkarma-citation="entities:17351:1" rel="noopener">Sciclone Pharmaceuticals (6600 HK)</a> is a biopharmaceutical company with an integrated platform for product development and commercialisation of drugs in the oncology and severe infection therapeutic areas. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/sciclone-pharmaceuticals-ipo-initiation-a-hard-sell" target="_blank" data-smartkarma-citation="insights:48114" rel="noopener">SciClone Pharmaceuticals IPO Initiation: A Hard Sell</a>, we stated that SciClone is a less than ideal IPO candidate. Despite efforts at diversification, SciClone is highly dependent on a single product, Zadaxin, which was launched in 1996. The risk to Zadaxin’s sales remains undiminished. The large pre-IPO dividends by existing shareholders in face of these challenges also sends the wrong message to potential IPO investors. Overall, on a fundamental basis, we are inclined to give this IPO a pass. </p></div><div><p>SciClone has launched its Hong Kong IPO at an indicative price range of HK$17.20-18.80 per share to raise net proceeds of HK$1,950.4 million ($252 million), at the mid-point of the price range. The raise is materially below the original target of a $500 million raise. Eleven cornerstone investors will subscribe for $133.7 million of the offer shares (49.65% of the offer shares at the mid-point of the IPO price). The cornerstone investors are largely domestic funds and lack international blue-chip names.</p></div><div><div><div class="content-highlight"><p>Relative valuation suggests that SciClone trades at a material discount to peers at the proposed IPO price range. We think that this discount is warranted due to SciClone's heavy reliance on Zadaxin, which faces ongoing challenges. Consequently, we are inclined to give this IPO a pass as our concerns on the fundamentals more than offset the "cheap" valuation.</p></div></div></div>

Sciclone Pharmaceuticals (6600 HK) is a biopharmaceutical company with an integrated platform for product development and commercialisation of drugs in the oncology and severe infection therapeutic areas. In SciClone Pharmaceuticals IPO Initiation: A Hard Sell, we stated that SciClone is a less than ideal IPO candidate. Despite efforts at diversification, SciClone is highly dependent on a single product, Zadaxin, which was launched in 1996. The risk to Zadaxin’s sales remains undiminished. The large pre-IPO dividends by existing shareholders in face of these challenges also sends the wrong message to potential IPO investors. Overall, on a fundamental basis, we are inclined to give this IPO a pass. SciClone has launched its Hong Kong IPO at an indicative price range of HK$17.20-18.80 per share to raise net proceeds of HK$1,950.4 million ($252 million), at the mid-point of the price range. The raise is materially below the original target of a $500 million raise. Eleven cornerstone investors will subscribe for $133.7 million of the offer shares (49.65% of the offer shares at the mid-point of the IPO price). The cornerstone investors are largely domestic funds and lack international blue-chip names.Relative valuation suggests that SciClone trades at a material discount to peers at the proposed IPO price range. We think that this discount is warranted due to SciClone's heavy reliance on Zadaxin, which faces ongoing challenges. Consequently, we are inclined to give this IPO a pass as our concerns on the fundamentals more than offset the "cheap" valuation.

SciClone Pharmaceuticals IPO: Valuation Insights

Bio-Thera Solutions Ltd / Equity Capital Markets

<p>In February 2020, <a href="https://www.smartkarma.com/entities/bio-thera-solutions-ltd" target="_blank" data-smartkarma-citation="entities:29127:1" rel="noopener">Bio-Thera Solutions Ltd (688177 CH)</a> completed its listing on the SSE STAR Market. Then in 2020/2H, Bio-Thera planned to list on the Hong Kong Stock Exchange, becoming another biopharmaceutical company with "A+H" listing. Currently the Company’s market value was about RMB13.5 billion. So how about this company? The following provides the insights on its pipeline and related competitive landscape. </p>

In February 2020, Bio-Thera Solutions Ltd (688177 CH) completed its listing on the SSE STAR Market. Then in 2020/2H, Bio-Thera planned to list on the Hong Kong Stock Exchange, becoming another biopharmaceutical company with "A+H" listing. Currently the Company’s market value was about RMB13.5 billion. So how about this company? The following provides the insights on its pipeline and related competitive landscape. 

Pre-IPO Bio-Thera Solutions - Insights on Pipeline and the Competitive Landscape

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

<p>Eddingpharm is a China-based pharmaceutical company that has filed an Application Proof to list on the HKEX. The product line consist of older drugs with varying degrees of exposure to the government's VBP/GQCE program. The development pipeline has two intriguing candidates that should come to market in 2022. We think the overarching issue for the shares will be whether enthusiasm for the pipeline can offset the VBP-related overhang. </p>
<p>This Insight addresses the company's products and market opportunity, and leave other topics to a future Insight. Our Bullish tag is a placeholder until we get closer to an offering.</p>

Eddingpharm is a China-based pharmaceutical company that has filed an Application Proof to list on the HKEX. The product line consist of older drugs with varying degrees of exposure to the government's VBP/GQCE program. The development pipeline has two intriguing candidates that should come to market in 2022. We think the overarching issue for the shares will be whether enthusiasm for the pipeline can offset the VBP-related overhang. 
This Insight addresses the company's products and market opportunity, and leave other topics to a future Insight. Our Bullish tag is a placeholder until we get closer to an offering.

Thematic (Sector/Industry)

<p><strong>1. Industry viewpoints:</strong></p><ul>
<li>A related news has been released this week that in 2021, China’s new intensive procurement policy would be applied to orthopedic implant consumables.</li>
<li>With the growth of China's pharmaceutical market, more and more innovative companies focusing on gene therapy are emerging in China, bringing market opportunities for CDMO on gene therapy.</li>
<li>As a financial tool, Commercial insurance will become a key part of pharmaceutical enterprises' marketing to support and maintain patient relationship in the future.</li>
</ul><p><strong>2. Company news:</strong></p><p style="text-align: start;">News about the progress of new drugs and COVID-19 vaccine from Hengrui, Innovent Biologics and Fosun Pharma.</p><p><strong>3. Market review:</strong></p><p style="text-align: start;">Last week, stock price for healthcare sector in A share decreased 2.92%, while CSI 300 increased 0.76% over the same period of time.</p><p><strong>4. Risk Disclosure:</strong></p><p style="text-align: start;">Policy risk, R&amp;D risk, Company risk and COVID-19 risk.</p>

1. Industry viewpoints:
A related news has been released this week that in 2021, China’s new intensive procurement policy would be applied to orthopedic implant consumables.
With the growth of China's pharmaceutical market, more and more innovative companies focusing on gene therapy are emerging in China, bringing market opportunities for CDMO on gene therapy.
As a financial tool, Commercial insurance will become a key part of pharmaceutical enterprises' marketing to support and maintain patient relationship in the future.
2. Company news:News about the progress of new drugs and COVID-19 vaccine from Hengrui, Innovent Biologics and Fosun Pharma.3. Market review:Last week, stock price for healthcare sector in A share decreased 2.92%, while CSI 300 increased 0.76% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. is a pharmaceutical company. Through its subsidiaries, the Company manufactures genetic medicines, Chinese traditional medicines, diagnostic products, and medical instruments, provides technology, marketing, and advertising services, as well as invests in import and export trading.

Shanghai Fosun Pharmaceutical (Group) (2196 HK)

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Shanghai Fosun Pharmaceutical (Group) (2196 HK)

Pre-IPO Apollomics - Concerns on Competition and Commercialization Despite Some Promising Products

This article provided insights on its major products in the pipeline in terms of competitive landscape, strength and challenges, as well as...

Xinyao (Criss) Wang

SciClone Pharmaceuticals IPO: Valuation Insights

SciClone has launched its IPO to raise net proceeds of $252m, at the mid-point of the price range. We recommend a pass as our concerns on the...

Arun George

Pre-IPO Bio-Thera Solutions - Insights on Pipeline and the Competitive Landscape

This article summarized the insights on major products of Bio-Thera Solutions in the pipeline and related competitive landscape with other key...

Xinyao (Criss) Wang

Eddingpharm: First Impressions

Eddingpharm plans to list on the HKEX. This Insight analyzes the company's products and pipeline. The main question is whether enthusiasm for the...

Kemp Dolliver, CFA

China Healthcare Weekly (Nov.27)

This article summarized the new healthcare policy released in China last week, major industry viewpoints, company news and capital market review of...

Xinyao (Criss) Wang

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