SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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Dr Janakan Krishnarajah has never shied away from thinking – or dreaming – big. In fact, setting bold targets is par for the course with him. 
“Be aware of self-imposed limitations,” said the Chief Medical Officer and Chief Operating Officer of SGX-listed specialty pharmaceutical company iX Biopharma Ltd. “You only have one life – pursue it with your whole heart, and live without regrets.” 
For the last 20 years, Krishnarajah, a Bachelor of Medicine and Bachelor of Surgery with Honours graduate from the University of Western Australia, has relentlessly followed his passion. A Fellow of the Royal Australasian College of Physicians, he is a specialist in the fields of Clinical Pharmacology and Internal Medicine. 
“Internal medicine deals with a broad and complex range of issues – you get to develop expertise in the diagnosis and treatment of chronic illnesses – there’s quite a bit of detective work involved,” he said.  
“Clinical Pharmacology focuses on drugs and their optimal use to treat disease. If not used correctly, they can cause the patient more harm than good.” 
Krishnarajah feels privileged to be able to make a positive impact on the lives of others. “By producing safe and effective medicines in the drug development process, we help improve the health of thousands. It’s also intellectually challenging and satisfying to come up with solutions for patients and fulfill unmet clinical needs.” 
Between 2013 and 2016, the 42-year-old held the position of CEO and Medical Director at Linear Clinical Research Ltd, a leading Australian early phase clinical trials facility. There, he developed extensive experience in Phases I-IV clinical trials, and acted as Principal or Co-Investigator in more than a hundred Phase I-II clinical trials. 
In April 2016, Krishnarajah joined iX Biopharma as CMO, and was subsequently promoted to COO three years later. “Previously, although I designed and ran the clinical trials, I never got to see the final stage, as companies would take the successful products to register them in their respective countries. Now at iX, I’m involved in the end-to-end process of drug development – from discovery to registration, manufacturing and marketing,” he said. 
“It’s deeply satisfying to see all that design and planning come to fruition through the patients who use these products.” Cutting-Edge 
Listed on SGX Catalist in 2015, iX Biopharma has established itself as a specialty pharmaceutical and nutraceutical company, operating a fully integrated business model from drug development and manufacturing, to sales and marketing, with facilities in Australia. 
It focuses on the development and commercialisation of novel wafer formulations to improve the quality of life of those suffering from pain and other health conditions, using its cutting-edge, patented sublingual delivery technology, WaferiX. 
The Group’s nutraceuticals division, Entity Health Ltd, is also engaged in the development and commercialisation of nutraceutical products that address specific health conditions and needs. 
Looking ahead, iX Biopharma’s twin growth engines will be its pharmaceutical and nutraceutical divisions, underpinned by its WaferiX delivery technology, said Krishnarajah. 
WaferiX is a multiple drug carrier platform that allows pharmacologically active compounds to be administered sublingually, or under the tongue. Produced via its proprietary freeze-drying technique, the porous and amorphous matrix holding the drug molecules is designed to collapse under the tongue within a minute, thus delivering the active compounds safely, conveniently and rapidly into the blood stream. This technology has also been proven to increase the bioavailability of drug actives as well as predictability of effect. 
The Group’s intellectual property rights for this technology has been secured in key markets such as the United States, China, Australia, New Zealand, Singapore, Japan, South Korea, India, Malaysia, Indonesia, as well as countries in the European Union. 
The Group has also filed corresponding patent applications in other jurisdictions that will allow it to seek similar patent protection in key markets throughout the world. 
This delivery technology is also applied across iX Biopharma’s pipeline of products that include Wafermine, the world’s first ketamine product delivered sublingually, and Wafesil, a sublingual sildenafil drug, which has obtained approval and registration in Australia, for the treatment of male erectile dysfunction. It has also developed a cannabidiol (CBD) drug – Xativa – using WaferiX, making it the world’s first freeze-dried, sublingual medicinal cannabis wafer. Crown Jewel 
Currently, the jewel in iX Biopharma’s crown is Wafermine. The group is in the process of out-licensing the product.  
The Group has made good progress so far, having concluded its End-of-Phase II meeting with the US Food and Drug Administration (FDA) last December, with both parties reaching an agreement on key aspects of the pivotal Phase III clinical trial program to support approval of Wafermine to treat moderate to severe acute pain. 
“We plan to pursue the monetising of Wafermine via partnerships with suitable pharmaceutical, biotech or other partners to advance the clinical development programme beyond Phase II,” Krishnarajah said. 
“Typically, to find a suitable partner to undertake Phase III, it’s an involved process, and COVID-19 has not helped. Things are progressing well, however, and we’re working through a number of interesting candidates,” he added. 
An out-licensing agreement usually involves a host of payments – upfront payment upon contract signing, as well as payments on the achievement of milestones in the Phase III clinical trial, and as the product progresses on its commercialisation path. 
Meanwhile, Xativa, which the Group is evaluating for the treatment of anxiety, tremor and inflammatory conditions, also offers huge potential. 
“CBD alternatives in the market today suffer from poor oral bioavailability,” Krishnarajah said. “Xativa was created to address the shortcomings of alternative delivery methods like smoking and vapourising, or other oral preparations, such as oil extracts.” 
“Sublingual delivery is fast-becoming the most preferred method of consuming CBD, allowing a user to maximise the benefits of its active compounds,” he added. 
Last December, iX Biopharma announced its wholly owned subsidiary iX Syrinx was granted a cannabis manufacture licence from the Office of Drug Control in Australia. Together with import and export licences that were already in hand, this latest licence opens up significant avenues for the Group to participate in the global medicinal cannabis business. 
The legal cannabis industry has seen explosive growth over the last two years. The size of the global cannabis market was estimated at US$13.8 billion in 2018, and is projected to reach US$66.3 billion by end-2025, expanding at a compound annual growth rate (CAGR) of about 24% over the seven years. 
In its most significant milestone to-date, iX Biopharma has inked its maiden agreement with medicinal cannabis enterprise Cannatrek to supply Xativa to the Australian market. Following its roll-out in Australia at the end of April, Xativa’s initial production runs totalling 1,700 boxes have been fully sold. 
“We’ve seen tremendous enthusiasm from doctors and patients – they’ve acknowledged that Xativa is different from other products as it offers fixed unit dosing, improved speed and level of absorption, as well as predictability of effect,” Krishnarajah added. 
“Xativa is also expected to be a superior alternative for certain population segments, such as senior citizens and the young, as it’s easy to use and doesn’t require swallowing capsules or ingesting oils, which may be harder to tolerate.” Gold Standard 
The third prong of iX Biopharma’s strategy involves its nutraceutical arm, Entity Health. To address high-growth categories like beauty, anti-ageing and lifestyle needs, the Group aims to roll out two to three new Entity products annually. 
Entity’s nutraceuticals are manufactured in the Group’s Therapeutic Goods Administration- (TGA) approved and Good Manufacturing Practice- (GMP) compliant  facility located in Victoria, Australia, and sold in more than 250 pharmacies and health food stores across Sydney, Melbourne and Perth. Its products have also been available online in Singapore since December 2017. 
Entity Health is currently tapping on e-commerce sales channels in China following the launch of online stores on JD.com and Alibaba’s Tmall Global in April. These two stores provide market access to more than 85% of the total business-to-consumer (B2C) e-commerce market in China. 
“China is a high-priority market and big growth driver for us,” Krishnarajah noted. “Australian-made health supplements are regarded by Chinese consumers as the gold standard of products due to the country’s reputation for safety and quality. We expect this market to grow from strength to strength.” 
Its Entity Health products and the licensing of its pharmaceutical drug Wafesil to Yiling Pharmaceutical for the China market in April this year have placed iX Biopharma “on the map”. “We’re in talks with a couple of Chinese pharmaceutical companies about our WaferiX platform as a result,” he added. 
While the overall outlook remains bright, the Group is grappling with production capacity constraints. 
“COVID-19 lockdowns have hampered our production capacity upgrades by delaying equipment installation, due to restrictions for overseas-based engineers to come onsite to commission the equipment,” Krishnarajah said. “These upgrades would have boosted our manufacturing capability by six-fold.” 
The Group is exploring alternative options, such as getting local engineering contractors to commission its new equipment. “We’re optimistic we can boost production capacity soon, and this in turn will give us the confidence to pursue the numerous deals out there,” he added. 
And when he is not strategising for the Group’s operations, Krishnarajah can be found with his three sons, aged 10 months, five and seven. Family time usually involves playing ball, other sports, and a board game or two. 
“My kids are growing up so quickly – it’s important to spend whatever time I have with them,” he smiled. 
“I want them to have a spirit of positivity,” he added. More importantly, they must cultivate resilience and an indomitable spirit. “I always tell my two older boys – dream big, and never ever, ever give up!” iX Biopharma Ltd 
iX Biopharma is a specialty pharmaceutical and nutraceutical company listed on SGX Catalist, operating a fully integrated business model from drug development to manufacturing and supply, with facilities in Australia. The Group is focused on the development and commercialisation of therapies for diseases of the central nervous system using novel, patent-protected formulations for sublingual delivery. Its pipeline of products under development includes Wafermine (ketamine wafer) for pain management, while drugs for the treatment of erectile dysfunction, Wafesil, a sublingual sildenafil wafer, and Silcap, have been registered in Australia. The Group has also developed Xativa, the world’s first freeze-dried sublingual medicinal cannabis wafer. Its nutraceuticals division, Entity Health, is engaged in the development and commercialisation of nutraceutical products that address specific conditions and improve quality of life. It distributes its Entity line of nutraceutical products in Australia through more than 250 pharmacies and health food shops, in China through its flagship stores on Tmall Global and JD Worldwide, and globally through its online store. 
The company website is: <a href="http://www.ixbiopharma.com">www.ixbiopharma.com</a> 
Click <a href="https://www.sgx.com/securities/equities/42C">here </a>for the company's StockFacts page. 
For the full year ended 30 June 2020 financial results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/4TY3N0RPPL2VQZIW/629811_iX_Press%20Release_4Q20.pdf">here</a>.

 About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="http://edm.sgx.com/a/hBd-CspB86%24MfB90noBAABR54ZH/link10">here</a>.  
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    IX-COO


Dr Janakan Krishnarajah has never shied away from thinking – or dreaming – big. In fact, setting bold targets is par for the course with him.  
“Be aware of self-imposed limitations,” said the Chief Medical Officer and Chief Operating Officer of SGX-listed specialty pharmaceutical company iX Biopharma Ltd. “You only have one life – pursue it with your whole heart, and live without regrets.”  
For the last 20 years, Krishnarajah, a Bachelor of Medicine and Bachelor of Surgery with Honours graduate from the University of Western Australia, has relentlessly followed his passion. A Fellow of the Royal Australasian College of Physicians, he is a specialist in the fields of Clinical Pharmacology and Internal Medicine.  
“Internal medicine deals with a broad and complex range of issues – you get to develop expertise in the diagnosis and treatment of chronic illnesses – there’s quite a bit of detective work involved,” he said.   
“Clinical Pharmacology focuses on drugs and their optimal use to treat disease. If not used correctly, they can cause the patient more harm than good.”  
Krishnarajah feels privileged to be able to make a positive impact on the lives of others. “By producing safe and effective medicines in the drug development process, we help improve the health of thousands. It’s also intellectually challenging and satisfying to come up with solutions for patients and fulfill unmet clinical needs.”  
Between 2013 and 2016, the 42-year-old held the position of CEO and Medical Director at Linear Clinical Research Ltd, a leading Australian early phase clinical trials facility. There, he developed extensive experience in Phases I-IV clinical trials, and acted as Principal or Co-Investigator in more than a hundred Phase I-II clinical trials.  
In April 2016, Krishnarajah joined iX Biopharma as CMO, and was subsequently promoted to COO three years later. “Previously, although I designed and ran the clinical trials, I never got to see the final stage, as companies would take the successful products to register them in their respective countries. Now at iX, I’m involved in the end-to-end process of drug development – from discovery to registration, manufacturing and marketing,” he said.  
“It’s deeply satisfying to see all that design and planning come to fruition through the patients who use these products.”  Cutting-Edge  
Listed on SGX Catalist in 2015, iX Biopharma has established itself as a specialty pharmaceutical and nutraceutical company, operating a fully integrated business model from drug development and manufacturing, to sales and marketing, with facilities in Australia.  
It focuses on the development and commercialisation of novel wafer formulations to improve the quality of life of those suffering from pain and other health conditions, using its cutting-edge, patented sublingual delivery technology, WaferiX.  
The Group’s nutraceuticals division, Entity Health Ltd, is also engaged in the development and commercialisation of nutraceutical products that address specific health conditions and needs.  
Looking ahead, iX Biopharma’s twin growth engines will be its pharmaceutical and nutraceutical divisions, underpinned by its WaferiX delivery technology, said Krishnarajah.  
WaferiX is a multiple drug carrier platform that allows pharmacologically active compounds to be administered sublingually, or under the tongue. Produced via its proprietary freeze-drying technique, the porous and amorphous matrix holding the drug molecules is designed to collapse under the tongue within a minute, thus delivering the active compounds safely, conveniently and rapidly into the blood stream. This technology has also been proven to increase the bioavailability of drug actives as well as predictability of effect.  
The Group’s intellectual property rights for this technology has been secured in key markets such as the United States, China, Australia, New Zealand, Singapore, Japan, South Korea, India, Malaysia, Indonesia, as well as countries in the European Union.  
The Group has also filed corresponding patent applications in other jurisdictions that will allow it to seek similar patent protection in key markets throughout the world.  
This delivery technology is also applied across iX Biopharma’s pipeline of products that include Wafermine, the world’s first ketamine product delivered sublingually, and Wafesil, a sublingual sildenafil drug, which has obtained approval and registration in Australia, for the treatment of male erectile dysfunction. It has also developed a cannabidiol (CBD) drug – Xativa – using WaferiX, making it the world’s first freeze-dried, sublingual medicinal cannabis wafer.  Crown Jewel   
Currently, the jewel in iX Biopharma’s crown is Wafermine. The group is in the process of out-licensing the product.   
The Group has made good progress so far, having concluded its End-of-Phase II meeting with the US Food and Drug Administration (FDA) last December, with both parties reaching an agreement on key aspects of the pivotal Phase III clinical trial program to support approval of Wafermine to treat moderate to severe acute pain.  
“We plan to pursue the monetising of Wafermine via partnerships with suitable pharmaceutical, biotech or other partners to advance the clinical development programme beyond Phase II,” Krishnarajah said.  
“Typically, to find a suitable partner to undertake Phase III, it’s an involved process, and COVID-19 has not helped. Things are progressing well, however, and we’re working through a number of interesting candidates,” he added.  
An out-licensing agreement usually involves a host of payments – upfront payment upon contract signing, as well as payments on the achievement of milestones in the Phase III clinical trial, and as the product progresses on its commercialisation path.  
Meanwhile, Xativa, which the Group is evaluating for the treatment of anxiety, tremor and inflammatory conditions, also offers huge potential.  
“CBD alternatives in the market today suffer from poor oral bioavailability,” Krishnarajah said. “Xativa was created to address the shortcomings of alternative delivery methods like smoking and vapourising, or other oral preparations, such as oil extracts.”  
“Sublingual delivery is fast-becoming the most preferred method of consuming CBD, allowing a user to maximise the benefits of its active compounds,” he added.  
Last December, iX Biopharma announced its wholly owned subsidiary iX Syrinx was granted a cannabis manufacture licence from the Office of Drug Control in Australia. Together with import and export licences that were already in hand, this latest licence opens up significant avenues for the Group to participate in the global medicinal cannabis business.  
The legal cannabis industry has seen explosive growth over the last two years. The size of the global cannabis market was estimated at US$13.8 billion in 2018, and is projected to reach US$66.3 billion by end-2025, expanding at a compound annual growth rate (CAGR) of about 24% over the seven years.  
In its most significant milestone to-date, iX Biopharma has inked its maiden agreement with medicinal cannabis enterprise Cannatrek to supply Xativa to the Australian market. Following its roll-out in Australia at the end of April, Xativa’s initial production runs totalling 1,700 boxes have been fully sold.  
“We’ve seen tremendous enthusiasm from doctors and patients – they’ve acknowledged that Xativa is different from other products as it offers fixed unit dosing, improved speed and level of absorption, as well as predictability of effect,” Krishnarajah added.  
“Xativa is also expected to be a superior alternative for certain population segments, such as senior citizens and the young, as it’s easy to use and doesn’t require swallowing capsules or ingesting oils, which may be harder to tolerate.”  Gold Standard  
The third prong of iX Biopharma’s strategy involves its nutraceutical arm, Entity Health. To address high-growth categories like beauty, anti-ageing and lifestyle needs, the Group aims to roll out two to three new Entity products annually.  
Entity’s nutraceuticals are manufactured in the Group’s Therapeutic Goods Administration- (TGA) approved and Good Manufacturing Practice- (GMP) compliant  facility located in Victoria, Australia, and sold in more than 250 pharmacies and health food stores across Sydney, Melbourne and Perth. Its products have also been available online in Singapore since December 2017.  
Entity Health is currently tapping on e-commerce sales channels in China following the launch of online stores on JD.com and Alibaba’s Tmall Global in April. These two stores provide market access to more than 85% of the total business-to-consumer (B2C) e-commerce market in China.  
“China is a high-priority market and big growth driver for us,” Krishnarajah noted. “Australian-made health supplements are regarded by Chinese consumers as the gold standard of products due to the country’s reputation for safety and quality. We expect this market to grow from strength to strength.”  
Its Entity Health products and the licensing of its pharmaceutical drug Wafesil to Yiling Pharmaceutical for the China market in April this year have placed iX Biopharma “on the map”. “We’re in talks with a couple of Chinese pharmaceutical companies about our WaferiX platform as a result,” he added.  
While the overall outlook remains bright, the Group is grappling with production capacity constraints.  
“COVID-19 lockdowns have hampered our production capacity upgrades by delaying equipment installation, due to restrictions for overseas-based engineers to come onsite to commission the equipment,” Krishnarajah said. “These upgrades would have boosted our manufacturing capability by six-fold.”  
The Group is exploring alternative options, such as getting local engineering contractors to commission its new equipment. “We’re optimistic we can boost production capacity soon, and this in turn will give us the confidence to pursue the numerous deals out there,” he added.  
And when he is not strategising for the Group’s operations, Krishnarajah can be found with his three sons, aged 10 months, five and seven. Family time usually involves playing ball, other sports, and a board game or two.  
“My kids are growing up so quickly – it’s important to spend whatever time I have with them,” he smiled.  
“I want them to have a spirit of positivity,” he added. More importantly, they must cultivate resilience and an indomitable spirit. “I always tell my two older boys – dream big, and never ever, ever give up!”   iX Biopharma Ltd  
iX Biopharma is a specialty pharmaceutical and nutraceutical company listed on SGX Catalist, operating a fully integrated business model from drug development to manufacturing and supply, with facilities in Australia. The Group is focused on the development and commercialisation of therapies for diseases of the central nervous system using novel, patent-protected formulations for sublingual delivery. Its pipeline of products under development includes Wafermine (ketamine wafer) for pain management, while drugs for the treatment of erectile dysfunction, Wafesil, a sublingual sildenafil wafer, and Silcap, have been registered in Australia. The Group has also developed Xativa, the world’s first freeze-dried sublingual medicinal cannabis wafer. Its nutraceuticals division, Entity Health, is engaged in the development and commercialisation of nutraceutical products that address specific conditions and improve quality of life. It distributes its Entity line of nutraceutical products in Australia through more than 250 pharmacies and health food shops, in China through its flagship stores on Tmall Global and JD Worldwide, and globally through its online store.  
The company website is: www.ixbiopharma.com  
Click here for the company's StockFacts page.  
For the full year ended 30 June 2020 financial results, click here.

 About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.  



iX Biopharma: Blazing New Trails in Healthcare

Shijiazhuang Yiling Pharmaceutical / Equity Bottom-Up

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Singapore’s most traded primary-listed stocks that represent medical equipment manufacturing, biotech and pharmaceuticals all generated gains in the 2020 year to 15 May, averaging 37% gains: Biolidics (+80%), iX Biopharma (+13%) and Hyphens Pharma (+17%). 
	 </li>
	<li>
By comparison, this genre of Healthcare stocks generated 2% median gains across Asia Pacific, and flat median returns across the globe. The Singapore trio also average lower debt-to-asset ratios than their regional and global peers. 
	 </li>
	<li>
A top 250 stock by market value, Biolidics has ranked just outside the top 50 stocks by turnover in the 2020 year to 15 May. Since announcing the launch of its rapid test kit for COVID-19 on 30 March, turnover participation in the stock has soared 50-Fold. 
	 </li>
	<li>Both iX Biopharma and Hyphens Pharma have expanded e-commerce operations, with the former reporting exceptional demand for its LumeniX and RestoriX nutraceutical products less than three weeks into the opening of flagship stores on JD Worldwide and Tmall Global.</li>
</ul>
 

 A key part of the Healthcare Sector, global stocks with a medical equipment manufacturing, biotech and pharmaceutical focus, have defended their 2019 returns in 2020, with flat median returns in the 2020 year through to 15 May. This Healthcare Sector genre is associated with big household names such as Johnson &amp; Johnson, Pfizer and Roche Holding AG. Moderna Inc, which has been working on a potential vaccine against COVID-19 since January, is within the top 40 medical equipment manufacturing, biotech and pharmaceutical stocks by market value. 

Across the region, medical equipment manufacturing, biotech and pharmaceuticals stocks have marginally outpaced their global peers with 2% median total returns over the 19 weeks. While such stocks can maintain comparatively smaller market value, for the purpose of this report, stocks with a market value of less than S$10 million are omitted from the analysis. In Singapore, there are three primary-listings that represent the group: Biolidics, iX Biopharma and Hyphens Pharma. The comparative total returns of the three stocks are illustrated below.
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Singapore’s Medical Equipment Manufacturing, Biotech and Pharmaceutical Stocks

Listed on Catalist, Biolidics, iX Biopharma and Hyphens Pharma rank outside Singapore’s 200 largest stocks by market value, however have all ranked within Singapore’s top 200 stocks by average daily turnover in the 2020 year to 15 May.

The average and median market capitalisation of Biolidics, iX Biopharma and Hyphens Pharma is S$118 million and S$115 million respectively as of the 15 May. This compares to a median market capitalisation of S$220 million for the more than 2,000 medical equipment manufacturing, biotech and pharmaceuticals stocks listed across the globe. At the same time, the Singapore trio also maintain lower debt to asset ratios as there regional and global peers.

The key segment of Healthcare stocks also command higher than average valuations. Across the region and the globe, medical equipment manufacturing, biotech and pharmaceuticals stocks maintain a median Price-to-Book ratio of 3x with median Price-to-Earnings ratios between 25x and 30x.
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On 18 May, Singapore's non-oil domestic exports was reported to grow 9.7% YoY in April, easing from a 17.6% rise in March. This was the third straight month of growth as sales of non-electronics products continuing to gain. Pharmaceutical exports, which are typically volatile, were up 174% YoY in April, following 49% YoY growth in March and 24% growth in February.

Biolidics Daily Trading Turnover Up 50-Fold in QTD

Biolidics has led the Catalist-listed trio of Medical Equipment Manufacturing, Biotech and Pharmaceutical stocks, in the 2020 year to 15 May returns with an 80% total return. For the first quarter of 2020, average daily turnover of Biolidics was less than S$200,000. From 1 April through to 15 May, average daily turnover of Biolidics had soared to more than S$10 million.

The catalyst for the surge in participation was the announcement that Biolidics had launched its rapid test kit for the COVID-19 and had entered into a manufacturer agreement with a diagnostic kit manufacturer to customise and manufacture the rapid test kits. 

Furthermore, with time of the essence, the first batch of Biolidics’ rapid test kits was expected to be available in April 2020  (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/PU1O1BC9MQBEAQIH/83a31c938431096b31bda3c62a049305977fc70746b9ea4ef506eb9b8106994b">here</a> for more). Biolidics has since released multiple announcements on distribution partners in addition to updates on processes with relevant authorities, which can be found <a href="https://www.sgx.com/securities/company-announcements?value=BIOLIDICS%20LIMITED&amp;type=company&amp;page=1&amp;pagesize=100">here</a>.

iX Biopharma Stores on JD.com and Tmall Global

iX Biopharma is a specialty pharmaceutical company with expertise in drug delivery systems that has developed a proprietary sublingual wafer delivery, WaferiX. Since releasing its Financial Statements for its 2HFY20 (ended 31 Dec, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/0CL340QXA5ORZX37/3ac5015ae25803f14def46d99e6e22114e67c3fe77955fc97d99e28c4f8eec6f">here</a> for more) the company has made a number of announcements on it products including:

<ul>
<li>6 April - the opening of the Entity flagship store on JD Worldwide, JD.com’s cross-border e-commerce platform (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/EAO65DRG8402PXT3/9684ecbf7e3b4f8cdf4ad38dcc311cb9ce8927cd9edeac35e2a7e8d41b7847d3">here</a> for more).</li>
	<li>13 April - opening of Entity’s new flagship store on Tmall Global, Alibaba Group’s cross-border B2C e-commerce platform (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/7GV1RUZB5YOAQ7DJ/e0a08c40391ae4c1477f94a40f4db3b07b033cb25051d775b020954809cdbc5c">here</a> for more).</li>
	<li>27 April - entered into a licensing agreement with Yiling Pharmaceutical Ltd for the licensing, supply and distribution of Wafesil, a sublingual sildenafil wafer for the treatment of male erectile dysfunction, in China (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/J1EMHMCDA0A94PAP/b4e6a447c9c3984bdb8db44a6322b9dde37d2c9af549d8a2ef6639eb9d8fd621">here</a> for more).</li>
	<li>29 April – agreement with Cannatrek to supply Xativa, the world’s first freeze-dried sublingual medicinal cannabis wafer, to the Australian market (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/8ULLB5IU8ME5U7FL/cb765934676862240a3bf766b90a30e150a0f675a53b46a173baa8f0375bcc55">here</a> for more).</li>
</ul>
On 4 May, iX Biopharma announced it had seen exceptional demand for its LumeniX and RestoriX nutraceutical products less than three weeks into the opening of Entity flagship stores on JD Worldwide and Tmall Global. The company noted the initial stock of LumeniX has sold out on both of Entity’s Tmall Global and JD Worldwide stores, and RestoriX is sold out on its JD Worldwide store, ahead of initial forecasts provided by its marketing agencies in China. The company also provided an update on the impact of COVID-19 on business operations on 8 May (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/FUVW9TMRL3DYWHCL/0bb1d2dd80ea5ce57a2ce2cabbe31f424827b83b4a6fc4cb644c065927dfc9b4">here</a> for more).

Hyphens Pharma Reports 1QFY20 Revenue &amp; Profit Growth

On 14 May, Hyphens Pharma released a 1QFY20 results briefing (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/12RH943NHTEFUYF4/305f5636e009eec1a773f9e3acad54b8d54c4d0a12d549052ce541dddb225c97">here</a> for more) noting its 1QFY20 (ended 31 Mar) revenue increased 16% YoY to S$31.4 million with quarterly profit up 49% YoY to S$2.1 million. 

The results briefing also highlighted a digital theme with new websites, and dermatological products under the Ceradan brand, health supplement products under the Ocean Health brand and the Stérimar nasal sprays were available on digital platforms Shopee, Qoo10, Lazada and redmart.

As part of the measures introduced by Singapore’s Multi-Ministry Taskforce, the company also noted that most physical workplace premises had been closed and only essential services that support daily needs remain open with safe-distancing measures in place. However, Pan-Malayan Pharmaceuticals Pte Ltd, a wholly-owned subsidiary, had obtained approval for an exemption from suspension of business activities during the circuit breaker period as the medical wholesale and distribution business is considered as part of the essential supply chain to support healthcare services.

More Medical Equipment Manufacturing, Biotech and Pharmaceutical Stocks

Singapore also lists Tianjin Zhong Xin Pharma Co, a secondary listing, with more information found <a href="https://www.sgx.com/securities/equities/T14">here</a>, in addition to three stocks with market capitalisation below S$10 million: QT Vascular (click <a href="https://www.sgx.com/securities/equities/5I0">here</a> for more), Pharmesis International (click <a href="https://www.sgx.com/securities/equities/BFK">here</a> for more) and Nutryfarm International (click <a href="https://www.sgx.com/securities/equities/AZT">here</a> for more). Also note for the purpose of this report Medical Equipment Manufacturing does not include Medical supplies such as rubber gloves, which will be covered in a separate Market Update.

The iEdge SG All Healthcare Index has gained 16% in the 2020 year through to 15 May. 
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Singapore’s most traded primary-listed stocks that represent medical equipment manufacturing, biotech and pharmaceuticals all generated gains in the 2020 year to 15 May, averaging 37% gains: Biolidics (+80%), iX Biopharma (+13%) and Hyphens Pharma (+17%).  
	 
	
By comparison, this genre of Healthcare stocks generated 2% median gains across Asia Pacific, and flat median returns across the globe. The Singapore trio also average lower debt-to-asset ratios than their regional and global peers.  
	 
	
A top 250 stock by market value, Biolidics has ranked just outside the top 50 stocks by turnover in the 2020 year to 15 May. Since announcing the launch of its rapid test kit for COVID-19 on 30 March, turnover participation in the stock has soared 50-Fold. 
	 
	Both iX Biopharma and Hyphens Pharma have expanded e-commerce operations, with the former reporting exceptional demand for its LumeniX and RestoriX nutraceutical products less than three weeks into the opening of flagship stores on JD Worldwide and Tmall Global.

 

 A key part of the Healthcare Sector, global stocks with a medical equipment manufacturing, biotech and pharmaceutical focus, have defended their 2019 returns in 2020, with flat median returns in the 2020 year through to 15 May. This Healthcare Sector genre is associated with big household names such as Johnson &amp; Johnson, Pfizer and Roche Holding AG. Moderna Inc, which has been working on a potential vaccine against COVID-19 since January, is within the top 40 medical equipment manufacturing, biotech and pharmaceutical stocks by market value. 

Across the region, medical equipment manufacturing, biotech and pharmaceuticals stocks have marginally outpaced their global peers with 2% median total returns over the 19 weeks. While such stocks can maintain comparatively smaller market value, for the purpose of this report, stocks with a market value of less than S$10 million are omitted from the analysis. In Singapore, there are three primary-listings that represent the group: Biolidics, iX Biopharma and Hyphens Pharma. The comparative total returns of the three stocks are illustrated below.



      
    
    Primary Listings


Singapore’s Medical Equipment Manufacturing, Biotech and Pharmaceutical Stocks

Listed on Catalist, Biolidics, iX Biopharma and Hyphens Pharma rank outside Singapore’s 200 largest stocks by market value, however have all ranked within Singapore’s top 200 stocks by average daily turnover in the 2020 year to 15 May.

The average and median market capitalisation of Biolidics, iX Biopharma and Hyphens Pharma is S$118 million and S$115 million respectively as of the 15 May. This compares to a median market capitalisation of S$220 million for the more than 2,000 medical equipment manufacturing, biotech and pharmaceuticals stocks listed across the globe. At the same time, the Singapore trio also maintain lower debt to asset ratios as there regional and global peers.

The key segment of Healthcare stocks also command higher than average valuations. Across the region and the globe, medical equipment manufacturing, biotech and pharmaceuticals stocks maintain a median Price-to-Book ratio of 3x with median Price-to-Earnings ratios between 25x and 30x.



      
    
    Mkt Cap


On 18 May, Singapore's non-oil domestic exports was reported to grow 9.7% YoY in April, easing from a 17.6% rise in March. This was the third straight month of growth as sales of non-electronics products continuing to gain. Pharmaceutical exports, which are typically volatile, were up 174% YoY in April, following 49% YoY growth in March and 24% growth in February.

Biolidics Daily Trading Turnover Up 50-Fold in QTD

Biolidics has led the Catalist-listed trio of Medical Equipment Manufacturing, Biotech and Pharmaceutical stocks, in the 2020 year to 15 May returns with an 80% total return. For the first quarter of 2020, average daily turnover of Biolidics was less than S$200,000. From 1 April through to 15 May, average daily turnover of Biolidics had soared to more than S$10 million.

The catalyst for the surge in participation was the announcement that Biolidics had launched its rapid test kit for the COVID-19 and had entered into a manufacturer agreement with a diagnostic kit manufacturer to customise and manufacture the rapid test kits. 

Furthermore, with time of the essence, the first batch of Biolidics’ rapid test kits was expected to be available in April 2020  (click here for more). Biolidics has since released multiple announcements on distribution partners in addition to updates on processes with relevant authorities, which can be found here.

iX Biopharma Stores on JD.com and Tmall Global

iX Biopharma is a specialty pharmaceutical company with expertise in drug delivery systems that has developed a proprietary sublingual wafer delivery, WaferiX. Since releasing its Financial Statements for its 2HFY20 (ended 31 Dec, click here for more) the company has made a number of announcements on it products including:


6 April - the opening of the Entity flagship store on JD Worldwide, JD.com’s cross-border e-commerce platform (click here for more).
	13 April - opening of Entity’s new flagship store on Tmall Global, Alibaba Group’s cross-border B2C e-commerce platform (click here for more).
	27 April - entered into a licensing agreement with Yiling Pharmaceutical Ltd for the licensing, supply and distribution of Wafesil, a sublingual sildenafil wafer for the treatment of male erectile dysfunction, in China (click here for more).
	29 April – agreement with Cannatrek to supply Xativa, the world’s first freeze-dried sublingual medicinal cannabis wafer, to the Australian market (click here for more).

On 4 May, iX Biopharma announced it had seen exceptional demand for its LumeniX and RestoriX nutraceutical products less than three weeks into the opening of Entity flagship stores on JD Worldwide and Tmall Global. The company noted the initial stock of LumeniX has sold out on both of Entity’s Tmall Global and JD Worldwide stores, and RestoriX is sold out on its JD Worldwide store, ahead of initial forecasts provided by its marketing agencies in China. The company also provided an update on the impact of COVID-19 on business operations on 8 May (click here for more).

Hyphens Pharma Reports 1QFY20 Revenue &amp; Profit Growth

On 14 May, Hyphens Pharma released a 1QFY20 results briefing (click here for more) noting its 1QFY20 (ended 31 Mar) revenue increased 16% YoY to S$31.4 million with quarterly profit up 49% YoY to S$2.1 million. 

The results briefing also highlighted a digital theme with new websites, and dermatological products under the Ceradan brand, health supplement products under the Ocean Health brand and the Stérimar nasal sprays were available on digital platforms Shopee, Qoo10, Lazada and redmart.

As part of the measures introduced by Singapore’s Multi-Ministry Taskforce, the company also noted that most physical workplace premises had been closed and only essential services that support daily needs remain open with safe-distancing measures in place. However, Pan-Malayan Pharmaceuticals Pte Ltd, a wholly-owned subsidiary, had obtained approval for an exemption from suspension of business activities during the circuit breaker period as the medical wholesale and distribution business is considered as part of the essential supply chain to support healthcare services.

More Medical Equipment Manufacturing, Biotech and Pharmaceutical Stocks

Singapore also lists Tianjin Zhong Xin Pharma Co, a secondary listing, with more information found here, in addition to three stocks with market capitalisation below S$10 million: QT Vascular (click here for more), Pharmesis International (click here for more) and Nutryfarm International (click here for more). Also note for the purpose of this report Medical Equipment Manufacturing does not include Medical supplies such as rubber gloves, which will be covered in a separate Market Update.

The iEdge SG All Healthcare Index has gained 16% in the 2020 year through to 15 May. 



Biolidics, iX Biopharma & Hyphens Pharma Outpace Peers in 2020 YTD

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Our prior Insight regarding production halts in Shijiazhuang City highlighted the differences between the impacted companies' disclosures. SSY Group (2005 HK) has particularly high exposure to the halt because their factories in Shijiazhuang City generate 90%+ of revenue.Management had hoped to receive approval to resume production by the end of November (which apparently hasn't occured). Shenzhen-listed Shijiazhuang Yiling Pharmaceutical Co., Ltd. (002603:CN) filed a disclosure on 1 December that not only provides additional general perspective, but suggests that some companies are preparing for the production ban to continue into January 2017.

Our prior Insight regarding production halts in Shijiazhuang City highlighted the differences between the impacted companies' disclosures. SSY Group (2005 HK) has particularly high exposure to the halt because their factories in Shijiazhuang City generate 90%+ of revenue.Management had hoped to receive approval to resume production by the end of November (which apparently hasn't occured). Shenzhen-listed Shijiazhuang Yiling Pharmaceutical Co., Ltd. (002603:CN) filed a disclosure on 1 December that not only provides additional general perspective, but suggests that some companies are preparing for the production ban to continue into January 2017.

Bespoke Research on China and neighbouring regions, Bixmoor

Bixmoor

Bespoke Research on China and neighbouring regions

Bixmoor specialises in providing bespoke research to business, governments and the financial community on China and neighbouring regions. We seek to build long-term relationships with our clients, based on our expertise, our reliability and our determination to find the right solution.

Thematic (Sector/Industry)

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of urban living mean that existing policies are unlikely to deliver a baby boom.

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of urban living mean that existing policies are unlikely to deliver a baby boom.

Falling Fertility Adds to China's Population Woes

Faced with dramatically falling birth rates, Iran has introduced a wide range of pro-natalist policies. In contrast, China has been half-hearted in the policies it has introduced and continues to boast about its family planning services.

Faced with dramatically falling birth rates, Iran has introduced a wide range of pro-natalist policies. In contrast, China has been half-hearted in the policies it has introduced and continues to boast about its family planning services.

Iran Shows China the Way on Population Expansion

China

Shijiangzhuang Yiling Pharmaceutical Co Ltd develops, produces and sells Chinese patent medicine. The Company's major products include Tongxinluo capsules, Shensongyangxin capsules, Lotus Qingwen capsules, Qili Qiangxin capsules and Bazi Bushen capsules.

Shijiazhuang Yiling Pharmaceutical (002603 CH)

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Shijiazhuang Yiling Pharmaceutical (002603 CH)

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Market Cap (USDm)

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