Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

<ul>
<li>PegBio, a VC-backed biotech company, plans to tap capital markets in Hong Kong. CICC is leading the offering, and an IPO date has yet to be announced.</li>
<li>The company's pipeline features promising drug candidates designed for the treatment of type 2 diabetes mellitus (T2DM), obesity, NASH, OIC and congenital hyperinsulinemia. </li>
<li>PegBio employs a proprietary technology platform, called HECTOR, and has six drug candidates in the pipeline portfolio. PB-119 is their core product with the purpose to treat T2DM and obesity.</li>
</ul>


PegBio, a VC-backed biotech company, plans to tap capital markets in Hong Kong. CICC is leading the offering, and an IPO date has yet to be announced.
The company's pipeline features promising drug candidates designed for the treatment of type 2 diabetes mellitus (T2DM), obesity, NASH, OIC and congenital hyperinsulinemia. 
PegBio employs a proprietary technology platform, called HECTOR, and has six drug candidates in the pipeline portfolio. PB-119 is their core product with the purpose to treat T2DM and obesity.


PegBio IPO Preview: A Founder-Led Biopharma Player Fighting T2DM and Obesity in China

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.

CARSgen Therapeutics / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/carsgen-therapeutics-ltd" target="_blank" data-smartkarma-citation="entities:32213:1" rel="noopener">CARSgen Therapeutics (2171 HK)</a> is a biopharma focused on innovative CAR-T cell therapies for the treatment of haematological malignancies and solid tumours. CARsgen opines that it is a key player in the field of CAR-T cell therapies. Pre-IPO investors include Hillhouse Capital, <a href="https://www.smartkarma.com/entities/zhejiang-jolly-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:7333:1" rel="noopener">Zhejiang Jolly Pharmaceutical (300181 CH)</a>, KTB Network, <a href="https://www.smartkarma.com/entities/tasly-pharmaceutical-group-co-ltd" target="_blank" data-smartkarma-citation="entities:9569:1" rel="noopener">Tasly Pharmaceutical Group (600535 CH)</a>, Loyal Valley Capital, Shiyu Investment Management and Lilly Asia Ventures.</p></div><div><p>CARsgen has launched an HKEx IPO to raise net proceeds of HK$2,795 million ($360 million) at the mid-point of the IPO price range of HK$29.60-32.80 per share.</p></div><div><p>Nine cornerstone investors have agreed to invest about $230 million in the IPO (60.38% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are LAV Group, New China Capital Management, CloudAlpha Capital Management, Orient Asset Management, WT Asset Management, GF Fund, Dymon Asia, IvyRock and China Southern Asset Management. </p></div><div><div>
<p>In <a href="https://www.smartkarma.com/insights/carsgen-therapeutics-ipo-initiation-choosing-therapies-a-la-car-t" target="_blank" data-smartkarma-citation="insights:52072" rel="noopener">CARsgen Therapeutics IPO Initiation: Choosing Therapies À La CAR-T</a>, we stated that the promising prospects for the lead product, a credible management team and a good shareholder register make the IPO worth a closer look. </p>
<div class="content-highlight"><p>Our SoTP value is HK$31.74 per share which is a 2% upside to the mid-point of the IPO price range. Due to the limited upside to our SoTP valuation, we think that the IPO price range is full. Overall, while we like CARsgen's fundamentals, due to the full IPO price range, lack of blue-chip cornerstone support and the current weak market sentiment on IPOs, we are inclined to wait on the sidelines for a more attractive entry point. </p></div>
</div></div>

CARSgen Therapeutics (2171 HK) is a biopharma focused on innovative CAR-T cell therapies for the treatment of haematological malignancies and solid tumours. CARsgen opines that it is a key player in the field of CAR-T cell therapies. Pre-IPO investors include Hillhouse Capital, Zhejiang Jolly Pharmaceutical (300181 CH), KTB Network, Tasly Pharmaceutical Group (600535 CH), Loyal Valley Capital, Shiyu Investment Management and Lilly Asia Ventures.CARsgen has launched an HKEx IPO to raise net proceeds of HK$2,795 million ($360 million) at the mid-point of the IPO price range of HK$29.60-32.80 per share.Nine cornerstone investors have agreed to invest about $230 million in the IPO (60.38% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are LAV Group, New China Capital Management, CloudAlpha Capital Management, Orient Asset Management, WT Asset Management, GF Fund, Dymon Asia, IvyRock and China Southern Asset Management. 
In CARsgen Therapeutics IPO Initiation: Choosing Therapies À La CAR-T, we stated that the promising prospects for the lead product, a credible management team and a good shareholder register make the IPO worth a closer look. 
Our SoTP value is HK$31.74 per share which is a 2% upside to the mid-point of the IPO price range. Due to the limited upside to our SoTP valuation, we think that the IPO price range is full. Overall, while we like CARsgen's fundamentals, due to the full IPO price range, lack of blue-chip cornerstone support and the current weak market sentiment on IPOs, we are inclined to wait on the sidelines for a more attractive entry point. 


CARsgen Therapeutics IPO: Valuation Insights

<p><a href="https://www.smartkarma.com/entities/carsgen-therapeutics-ltd" target="_blank" data-smartkarma-citation="entities:32213:1" rel="noopener">CARSgen Therapeutics (1186504D CH)</a> is a biopharma focused on innovative CAR-T cell therapies for the treatment of haematological malignancies and solid tumours. CARsgen opines that is a key player in the field of CAR-T cell therapies. CARsgen is pre-marketing an HKEx IPO to raise proceeds of $400-500 million, according to press reports. </p><p>Five CAR-T products, <em>Kymriah, Yescarta, Tecartus, Breyanzi</em> and <em>Abecma</em>, have been approved by the FDA for marketing in the US. However, there is no CAR-T cell therapy approved by the NMPA for marketing in China. The total revenue of <em>Kymriah, Yescarta</em> and <em>Tecartus</em> in 2020 was $1.1 billion (source: Frost &amp; Sullivan) which highlights the market opportunity. </p><div class="content-highlight"><p>CARsgen has developed a pipeline of 11 product candidates, including six at the clinical stage. CARsgen owns the global rights to its product candidates and technologies, all of which are developed in-house. The sole core product candidate is CT053. Overall, we believe that the promising prospects for the lead product, a credible management team and a good shareholder register make the IPO worth a closer look. </p></div>

CARSgen Therapeutics (1186504D CH) is a biopharma focused on innovative CAR-T cell therapies for the treatment of haematological malignancies and solid tumours. CARsgen opines that is a key player in the field of CAR-T cell therapies. CARsgen is pre-marketing an HKEx IPO to raise proceeds of $400-500 million, according to press reports. Five CAR-T products, Kymriah, Yescarta, Tecartus, Breyanzi and Abecma, have been approved by the FDA for marketing in the US. However, there is no CAR-T cell therapy approved by the NMPA for marketing in China. The total revenue of Kymriah, Yescarta and Tecartus in 2020 was $1.1 billion (source: Frost &amp; Sullivan) which highlights the market opportunity. CARsgen has developed a pipeline of 11 product candidates, including six at the clinical stage. CARsgen owns the global rights to its product candidates and technologies, all of which are developed in-house. The sole core product candidate is CT053. Overall, we believe that the promising prospects for the lead product, a credible management team and a good shareholder register make the IPO worth a closer look. 

CARsgen Therapeutics IPO Initiation: Choosing Therapies À La CAR-T

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<p><strong>1. Industry viewpoints:</strong></p><ul>
<li>In the aspect of Chinese patent medicines, the main varieties of proprietary Chinese medicine are expected to be the first to be included in VBP, and medicines of stable quality are a higher priority.</li>
<li>Chemiluminescence is in the stage of rapid growth and the trend of intensive procurement of IVD consumables could drive import substitution.</li>
<li>The wellness tourism market has a good development environment and a huge growth potential.</li>
</ul><p><strong>2. Company news:</strong></p><p style="text-align: start;">News about the updated progress of COVID-19 vaccine and new drugs from <a href="https://www.smartkarma.com/entities/cansino-biologics-inc" target="_blank" data-smartkarma-citation="entities:27739:1" rel="noopener">CanSino Biologics Inc (6185 HK)</a>, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a>, <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a>, and <a href="https://www.smartkarma.com/entities/akeso-biopharma-inc" target="_blank" data-smartkarma-citation="entities:28830:1" rel="noopener">Akeso Biopharma Inc (9926 HK)</a>.</p><p><strong>3. Market review:</strong></p><p style="text-align: start;">Last week, stock price for healthcare sector in A share decreased 8.2%, while CSI 300 decreased 7.65% 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:
In the aspect of Chinese patent medicines, the main varieties of proprietary Chinese medicine are expected to be the first to be included in VBP, and medicines of stable quality are a higher priority.
Chemiluminescence is in the stage of rapid growth and the trend of intensive procurement of IVD consumables could drive import substitution.
The wellness tourism market has a good development environment and a huge growth potential.
2. Company news:News about the updated progress of COVID-19 vaccine and new drugs from CanSino Biologics Inc (6185 HK), Innovent Biologics Inc (1801 HK), Antengene (6996 HK), and Akeso Biopharma Inc (9926 HK).3. Market review:Last week, stock price for healthcare sector in A share decreased 8.2%, while CSI 300 decreased 7.65% over the same period of time. 4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

<div>
<p>A group of shareholders plans to raise around US$200m via selling a 4.6% stake in <a href="https://www.smartkarma.com/entities/i-mab" target="_blank" data-smartkarma-citation="entities:28384:1" rel="noopener">I-Mab (IMAB US).</a></p>
<p>We have previously covered the IPO in:</p>
</div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/i-mab-pre-ipo-strong-management-and-investor-backing-with-differentiated-products" target="_blank" rel="noopener">I-Mab (天境生物) Pre-IPO: Strong management and investor backing with differentiated products</a></li>
<li><a href="https://www.smartkarma.com/insights/i-mab-ipo-everest-deal-a-valuation-booster" target="_blank" rel="noopener">I-Mab (天境生物) IPO: Everest Deal a Valuation Booster</a></li>
<li><a href="https://www.smartkarma.com/insights/i-mab-ipo-trading-tiny-float-and-undemanding-valuation" target="_blank" rel="noopener">I-Mab (天境生物) IPO Trading: Tiny Float and Undemanding Valuation</a></li>
</ul></div><div><p>In this insight, we will talk about updates since then and run the deal through our ECM framework.</p></div>


A group of shareholders plans to raise around US$200m via selling a 4.6% stake in I-Mab (IMAB US).
We have previously covered the IPO in:

I-Mab (天境生物) Pre-IPO: Strong management and investor backing with differentiated products
I-Mab (天境生物) IPO: Everest Deal a Valuation Booster
I-Mab (天境生物) IPO Trading: Tiny Float and Undemanding Valuation
In this insight, we will talk about updates since then and run the deal through our ECM framework.

I-Mab Placement - Heading in the Right Direction

China

Tasly Pharmaceutical Group Co.,Ltd. manufactures drug products. The Company develops and sells traditional Chinese medicine, biological medicine, chemical medicine, and other related products. Tasly Pharmaceutical Group markets its products throughout China.

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Tasly Pharmaceutical Group (600535 CH)

PegBio IPO Preview: A Founder-Led Biopharma Player Fighting T2DM and Obesity in China

PegBio, a promising founder-led biotech company, is seeking to tap capital markets in Hong Kong. Their core product for the treatment of T2DM is at...

Andrei Zakharov

CARsgen Therapeutics IPO: Valuation Insights

Due to the full IPO price range, lack of blue-chip cornerstone support and the current weak market sentiment on IPOs, we are inclined to wait on...

Arun George

CARsgen Therapeutics IPO Initiation: Choosing Therapies À La CAR-T

CARsgen is pre-marketing an HKEx IPO to raise proceeds of $400-500m. The promising prospects for the lead product, credible management and a good...

Arun George

China Healthcare Weekly (Feb.26)

This article analyzed the VBP policy on Chinese patent medicines, the growth potential in the chemiluminescence and intensive procurement of IVD...

Xinyao (Criss) Wang

I-Mab Placement - Heading in the Right Direction

A group of shareholders plans to raise around US$200m via selling a 4.6% stake in I-Mab (IMAB US). We have previously covered the IPO as well.

Sumeet Singh

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