Healthcare

• Mindray has encountered bottleneck in performance growth. So, it urgently hopes to bring “new growth stories”. APT Medical’s current growth momentum is commendable, and could also complement Mindray’s product line.
• We saw poor stock price performance of both after the announcement. High acquisition premium and the possibility that APT Medical’s future performance fall short of expectations are among the reasons. 
• In fact, both sides got what they wanted. We advise investors to be patient.Perhaps, Mindray would indeed make a breakthrough from this acquisition, which is also a blow to Microport.  

Key points (machine generated)

• AVDL is a pharmaceutical company that has recently launched LUMRYZ, a drug used to treat Narcolepsy, a rare sleeping disorder.
• LUMRYZ is an improved version of two existing drugs, Xyrem and Xywav, which generate $1.9 billion in annual revenue and have around 16,000 patients on the drug.
• LUMRYZ aims to address the inconvenience of the unusual dosing profile of Xyrem and Xywav, which require patients to take two doses, with the second dose taken in the middle of the night.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Oryzon hosted a key opinion leader (KOL) event highlighting the potential of vafidemstat in borderline personality disorder (BPD). The KOLs discussed the limited options for treating BPD, as there are no approved drugs, and the current therapies are often ineffective. While the PORTICO trial did not reach statistical significance on its primary endpoints, vafidemstat was favoured over placebo in all efficacy measures, with statistical significance in two key secondary endpoints. During the event, the KOLs shared their perspectives from working with BPD patients, and claimed that improvements of 25% or over, across any measure of overall severity and agitation/aggression, would mark a clinically meaningful outcome. As this was achieved in PORTICO, we believe that vafidemstat has the potential to be an effective treatment option for this underserved patient population. Oryzon is conducting a detailed analysis of the trial results and plans to request an end-of-Phase II (EoP2) meeting with the FDA in Q224 to discuss a registrational Phase III programme.

• The approval rate of Draft Bill is very low. So, it’s more of a “strangulation” of investment sentiment. But considering the 2024 US presidential election, similar negative proposals may resurface. 
• WuXi AppTec has little control over the entire situation.There’s “valuation discount” for China CXOs due to geopolitical conflicts. It’s difficult to completely rule out the possibility of “deliberate short selling”. 
• If look deeper, considering “sensitive situations” at present, to some extent, we may have already been in a financial war.The goal of short selling is to pick up cheap chips. 

• Shouhui Tech (SHOU HK) is looking to raise around US$200m in its upcoming Hong Kong IPO. The bookrunners on the deal are CICC, and Huatai International.
• Shouhui Tech (Shouhui) is an online life and health insurance intermediary service provider in China.
• According to F&S, Shouhui was the third largest online insurance intermediary in China in terms of GWPs of long-term life and health insurance in 2022, with a 7.1% market share. 

• Even good enterprises could be neglected by the market, leading to low valuation. Many people wonder when is the best buying point for pharmaceutical companies. We shared our views.
• If PD-1 sold in China can still achieve a certain scale, the situation of PD-L1 is not the same. In fact, we’re pessimistic about all companies selling PD-L1 in China.
• Beijing Tiantan Biological Products (600161 CH) is a good defensive target in unfriendly external environment. The reasonable market value is RMB45-50 billion. We think Tiantan will maintain stable growth ahead.

• Samsung Biologics (207940 KS) reported 11% YoY growth in revenue to KRW1.07 trillion in 4Q23 driven by the ramp-up of operation of its Plant 4 and robust sales backlog.
• The company closed 2023 with record high revenue and operating profit, bucking the weakening trend in overall global CDMO sector.
• The outlook remains strong, with resilient business performance expected to drive a 10–15% annual growth in revenue for 2024.

• This is our first report on Mirati Therapeutics Inc., a pharmaceutical firm specializing in cancer treatment.
• The company has shown significant potential with a robust pipeline and innovative programs targeting areas of cancer with large unmet needs.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• We believe RemeGen has bottom fishing value because its Systemic Lupus Erythematosus (SLE) drug Telitacicept (RC18) has already been approved for sale in China.
• Earliest data read in US clinical trial for IgA Nephropathy is already available, with SLE data read available in C3Q24 and MS in C4Q24;
• We don’t think a leading biotech from the wealthy city of Yantai will run out of cash. We assume RemeGen will be able to mitigate its liquidity problem.

Key points (machine generated)

• Integra enjoys a high level of trust in the quality and reliability of its products, particularly in the neurosurgical equipment and wound healing grafts segments.
• The acquisition of Codman in 2017 resulted in a significant expansion of Integra’s neurosurgery sub-segment.
• Surgeons prefer Integra’s brands due to their superior performance and the trust they have in the company’s products. The tissue segment uses a variety of raw materials, including animal sources and synthetic materials.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Basilea has announced receipt of its first sales-related milestone (for an undisclosed amount) from distribution partner Knight Therapeutics. The payment was triggered by combined Cresemba sales in Latin America exceeding a pre-defined sales threshold. Cresemba continues to see strong market traction for the treatment of invasive aspergillosis and mucormycosis, with the drug reporting in-market sales of US$445m in the 12 months ending September 2023 (+22% y-o-y), reflecting a growing market share in value terms (15% globally and 38% in the US among best-in-class antifungals). In FY23 Basilea recorded around CHF30m in milestone payments for lead product Cresemba, including CHF25m from Pfizer in Europe (>CHF355m in upfront and milestone payments received to date). In December 2023, Cresemba was granted a paediatric label expansion in the US, extending market exclusivity to September 2027 (EU decision anticipated in Q124), by which time we estimate sales to peak at c US$700m.

• This is our first report on clinical diagnostic products manufacturer, Bio-Rad Laboratories.
• The company’s financial results for the third quarter of 2023 show varying performances across segments.
• The call highlighted key issues including the impacts of Bio-pharma and the challenges in the economic conditions in China on the company’s performances.

• This is our first report on healthcare tech solutions provider, Catalent Inc.
• The company’s first quarter of fiscal year 2024 earnings call highlighted a solid start to the fiscal year despite turbulence in several markets.
• The management noted improved focus on cash flow, citing benefits from better working capital management and increased analytical rigor around capital expenditure spending.

• I want to close a few positions. First Homology (FIXX) a busted biotech mentioned here about 2 months ago.
• A terrible reverse merger was inflicted on FIXX shareholders, and I was hoping the deal would be changed or some activist shareholder would jump in.
• So far that has not happened while the stock is up 18%, so I am closing it here. 

• Geopolitical risks have led to foreign companies planning to withdraw from China.It’s also difficult to allow foreign companies to control China’s core strategic assets.So, Grifols and RAAS’ “breakup” is inevitable.
• This acquisition is an important milestone in the development of Haier’s big health industry. RAAS’s valuation also has room to rise further after being acquire by Haier due to synergies.
• In the case of slowing growth in the home appliance market, this is a wise move for Haier.However, potential goodwill impairment in GDS is a risk for Haier/RAAS and investors.

• New Horizon Health announced a positive profit alert yesterday after market close and held a conference call.
• We participated in the call and spoke with the management to understand the recent developments.
• The company upgraded ’23 revenue guidance and provided revenue guidance for ’24.

• The essence of Shouhui’s business model is to “sell insurance” rather than provide services with technological attributes. So, Shouhui has relatively single business composition and lacks diversified sources of revenue.
• The trend of “disintermediation” is becoming increasingly evident, which may lead to customers deciding to purchase insurance directly from insurance companies not from Shouhui, resulting declining demand for Shouhui’s services/products.
• The business nature of insurance is incompatible with the Internet’s pursuit of rapid expansion. Cooling “Internet +insurance” investment in recent years proves the decline of market’s enthusiasm for this business.

• Like everyone else on the planet, Calcbench has been relieved to see the covid-19 pandemic recede into the background of daily life.
• Now, however, Johnson & Johnson ’s latest earnings report gives us a glimpse of what that fade means for corporate earnings.
• J&J ($JNJ) filed its earnings report on Tuesday morning .

SIGA Technologies has appointed Dr Diem Nguyen as its new chief executive officer (CEO), effective 27 January 2024. She will be spearheading the company efforts to expand its commercial operations, following the retirement of incumbent CEO, Dr Phil Gomez (who had announced plans to retire in January 2023). Dr Nguyen has over 25 years of experience in the pharmaceutical industry and joins from Xalud Therapeutics, a clinical-stage biotechnology company, where she was the CEO. Prior to Xalud, she served as executive vice president of PPD Inc, a global contract research organization (CRO) and had previously been associated with Pfizer across various commercial roles. We expect SIGA to benefit from her broad industry exposure and commercial know-how in scaling the international footprint of SIGA’s antiviral treatment, TPOXX, the only approved antiviral treatment for smallpox globally.

AFT Pharmaceuticals has announced the addition of another candidate, HY-091, to its R&D pipeline, for the management of vulvar lichen sclerosus (VLS), a skin condition with no curative treatments available. We note that HY-091 is one of the three R&D assets under diligence by AFT, with evaluation ongoing in another two. An active R&D pipeline is a key focus area for AFT, which will support management’s objective to expand its global footprint and achieve its long-term goal to have international markets represent 35% of sales (8% in FY23). HY-091 will be developed as a mucoadhesive film, an extended-release formulation of a known (albeit undisclosed) molecule, and will target alleviation of symptoms such as pain, itching and inflammation. The asset will be developed and commercialised in collaboration with Hyloris (existing partner for Maxigesic IV and HY-090) with similar collaboration terms for HY-090.

OSE has refreshed its outlook for 2024, including the commencement of the confirmatory Phase III trial for lead asset Tedopi (an off-the-shelf, neoepitope-based cancer vaccine) in second-line non-small cell lung cancer (Q224 in the US and extension to European sites in H224), with the recent FDA review and slight timeline adjustment for its lead immuno-inflammation asset, OSE-127, currently in a Phase II trial for ulcerative colitis (UC). Across these proprietary programmes and alongside ongoing partnered programmes, we believe 2024 will be an active year for OSE, with several anticipated milestones and catalysts.

• One direct reason for the sharp drop in stock prices is that RemeGen’s performance in 23Q4 would miss expectation, thus leading to disappointing performance for the entire year of 2023.
• Due to low competitiveness of pipelines, product sales are hard to bring sufficient cashflow.Prospects for future license-out deals are still uncertain. RemeGen may find it difficult to turn the tide.
• Reasonable market value of Remegen should be above RMB12 billion. Investors can participate in the rebounds after stock price plunge, but we do not recommend holding for the long term.

• 23Q3 revenue would increase by 15% QoQ/over 40% YoY. 23Q4 revenue would increase 8-10% QoQ/over 45% YoY. 2023 full-year revenue growth would be 42-43%.Profit growth is more optimistic than revenue.
• In the first week of January 2024, YoY high growth momentum continued from December 2023, without any impact of consumption downgrades so far.In 2024, Gushengtang would accelerate pace of M&A.
• Gushengtang’s business model has been successfully validated. Different from Aier, Gushengtang is still in a period of rapid expansion. The Company remains our top pick in China’s medical service sector.

• GUPPY’s Inc (5127 JP) has recommended Medley (4480 JP)’s tender offer of JPY3,250 per share, an 81.0% premium to the undisturbed price (19 January). 
• The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 10.19% ownership ratio. 
• Despite the premium, the offer is light vs the IFA DCF valuation. Based on the irrevocables, the minimum acceptance condition requires a 23.4% minority acceptance rate, which is achievable. 

• Genetron Holdings Ltd (GTH US) shareholders will vote on the consortium’s US$4.08 per ADS offer on 21 February. The offer is light in comparison to historical trading ranges.
• Completion is conditional on shareholder approval, dissenting shareholders representing less than 15% of outstanding shares and regulatory approvals (NDRC, MoC and SAFE). 
• Despite the light offer, the completion conditions should be met. At the last close price and end of March completion, the gross and annualised spread is 7.7% and 45.5%, respectively.

• As more and more China’s drugs successfully obtained FDA approval, we analyzed the “style” of the US FDA, aiming to help investors understand the prospects of domestic companies’ internationalization strategies.
• For mature pharmaceutical companies, we analyzed the benchmarks for some key financial indicators in terms of both revenue and cost. On these basis, companies’ profit performance would be decent. 
• As a top pharmaceutical SOE, China Resources Pharmaceutical (CRP) wouldn’t go bankrupt.This is the bottom line.Together with stable dividends, CRP is a worthwhile investment target to hold in bear market.