Healthcare

• Considering DS-8201’s outstanding data and strong competing drugs, RC48 would probably contribute revenue to RemeGen mainly from GC and UC indications in China.Overseas revenue would be mainly from UC indication.
• After Pfizer acquired Seagen, there are concerns that RC48 (a “Me-Worse”) may be returned by Pfizer. If it is the case, only the revenue in China market should be considered.
• Based on 2022 annual results, we think it is time to reassess the outlook and sales forecast of RC48 and RC18, because the story has changed for RemeGen.

• The 8th national VBP released results, with an average price reduction of 56%. On the whole, the peak period of the impact of VBP on pharmaceutical companies has passed.
• VBP document of Chinese patent medicines was released, which would affect a market with scale of RMB300 billion. Enterprises with rich product matrices/new products can better cope with this VBP.
• For AIM, we listed several key points. Since the management are more interested in short term capital gains rather than developing a superior portfolio, AIM doesn’t have long-term investment value.

• This is our first report on ResMed, a leading medical equipment company that specializes in the treatment of sleep apnea and other respiratory disorders.
• The company delivered financial results in the last quarter with revenues below par but managed an earnings beat.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• ResMed is a leading medical technology player that specializes in the treatment of sleep apnea and other respiratory disorders.
• Globally, the demand for masks increased significantly, which is indicative of a post-COVID pandemic knowledge of the value and necessity of respiratory hygiene and respiratory health.
• Baptista Research looks to evaluate the different credit strengths and credit risks of the company as well as a line-by-line analysis of the financial statements of the company for the past four years.

• Siloam International Hospitals (SILO IJ) is coming out of the COVID period with guns blazing as base case revenues continue to grow, surpassing pre-pandemic levels and with margins improving. 
• 2022 was a year of two halves and 2H2022 saw a clear resumption of base case patient activity, Siloam also saw the benefits of unified pricing and improved efficiencies.
• Siloam looks well-positioned to grow its base case revenues further in the coming year, with a healthy cost base and more beneficial pricing. Valuations are attractive on 9.4x FY2023E EV/EBITDA.

The US Food and Drug Administration (FDA) has granted Breakthrough Device designation (BDD) to Pixium’s wireless Prima bionic vision system (BVS), which is currently being assessed in the European PRIMAvera pivotal study in patients with geographic atrophy due to age-related macular degeneration (GA-AMD). This achievement suggests that the FDA recognises GA-AMD is an irreversibly debilitating human disease and that Prima BVS has the potential to provide an effective treatment in this area of unmet need. Pixium remains on track to report top-line data from PRIMAvera in or around year-end 2023. If positive, a CE Mark regulatory marketing submission can be filed in 2024, which we estimate could lead to commercialisation of the Prima system in H125.

• Universal Vision Biotechnology (3218 TT) reported continued growth in 2022, with revenue, operating profit, and net profit increasing 33%, 41%, and 43%, YoY, respectively.
• Revenue from high-margin technical service grew 45% YoY, driven by increasing number of refractive and cataract surgeries performed in Taiwan.
• UVB remains on a steady growth path and started 2023 on a strong note. During the first two months of 2023, the company recorded revenue of NT$661M, up 18% YoY.

• JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
• A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
• Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-March 2023.

• Prodia (PRDA IJ) FY2022 results saw declines in revenues and profits but from a COVID-high base and the numbers are now well-above 2019, with strong prospects ahead.
• The company is seeing a return to routine testing with tests per visit back to pre-COVID and revenues per visit also rising strongly, with a diverse customer base providing comfort.
• Prodia also has an increasing digital angle with the rising use of its app and a new app that tracks patients’ health just launched. Prodia (PRDA IJ) is too cheap.

• Dr Lal PathLabs Ltd (DLPL IN) reported 2% and 8% revenue and net profit decline in Q3FY23, respectively. Q3 results were dragged by an 80% YoY decline in COVID-19 revenue.
• While non-COVID revenue increased 9% YoY to INR4.78 billion, it declined 7% QoQ. In fact, Q3FY23 non-COVID revenue was the lowest over the last three quarters.
• Although diagnostics is a big and attractive market opportunity in India, the sector is overcrowded, leading to heated price competition and declining realization per test.

• RemeGen reported C2H22 top line in-line with our estimate but 9.4% below consensus. Gross margin, however, beat our estimate by 21ppt. Net-net, non-IFRS operating income missed our expectation by 15%; 
• The result highlighted RemeGen’s investment case hinging on successful license out. Product revenue itself cannot carry the company to profitability; 
• With WACC of 17%, we have already provisioned for the license out absence. But we still cut TP by HK$6 to reflect the increasing spending going forward.

• Korea FSC will accept financial institutions’ LOC and LPs’ investment performance agreements as certifying documents for securing funds. This revision will be effective right from April 1 this year.
• The impact from a preemptive trading perspective is likely to be significant. Additional stake purchases through tender offers will increase more aggressively, particularly when purchasing shares from the majority shareholder.
• We should first pay attention to companies where private equity (PE) is the largest shareholder whose stake is relatively low (less than 50%): Hugel, Hana Tour Service, & Hanssem

• Terumo Corp (4543 JP) raised FY23 revenue guidance due to greater than expected depreciation of Yen. However, excluding Fx, revenue growth expectation has been lowered to 5% from 6% earlier.
• New guidance implies Q4FY23 revenue of ¥197B (-8% QoQ) and operating profit of ¥28.5B (-24% QoQ). Terumo assumed exchange rate of ¥130/USD for Q4FY23, similar level realized in Q1FY23.
• Terumo has reduced FY23 operating and net profit guidance by ¥10B and ¥8.5B, respectively due to higher-than-expected inflation. Excluding Fx, operating profit is expected to decline 2% in FY23.

• IQVIA Holdings is an global healthcare-tech major providing services to the clinical research and health information technology sectors.
• In partnership with Tasso, they have launched the first self-collection safety lab panel for clinical trial participants in the United States, enhancing their decentralized clinical trial capabilities.
• Our focus is on analyzing the financial strength and the debt servicing capability of the company and the analysis does not differentiate among debt instruments.

• The investment logic of vaccine companies is different that of biotech. Generally speaking, vaccine companies cannot develop to large scale without successfully betting on big vaccine varieties.
• The most fatal problem of CanSino is that there’re no other blockbuster varieties except COVID-19 vaccine. So, either CanSino develops a big variety,or it would gradually enter a vicious circle.
• CanSino’s current valuation is at a low level. Even with many negative factors, that doesn’t mean CanSino’s stock price won’t rebound. 

• This is our first report on an IQVIA Holdings, an international player providing services to the clinical research and health information technology sectors.
• IQVIA expanded access to clinical research.
• We initiate coverage on the stock of IQVIA Holdings Inc. with a ‘Buy’ rating.

• The sustainability/stability of Sipai’s performance and growth potential are worrying. Sipai doesn’t have a business with core competitiveness as its foundation, thus leading to potential problems in its business model.
• It is useless to have fast revenue growth because Sipai’s profitability is very weak, which is actually closely related to its business characteristics. Sipai is far from being breakeven.
• Sipai is overvalued. Such high valuation is not reasonable based on our analysis. We are conservative about Sipai’s outlook and we think there are much better investment opportunities.

AFT Pharmaceuticals (AFT) has announced that it has signed three additional licensing agreements for Maxigesic IV – with Labatec in Switzerland and Pharma Bavaria in Argentina and Paraguay. The product franchise continues its international expansion, with the deals following the recent launches of Maxigesic IV in five European countries. To date (FY23, ending 31 March) AFT’s flagship product, Maxigesic, is available in 61 countries (across all dose forms), up 15 from the prior year. This is marginally lower than the target of 63 countries for FY23, but the company also announced achieving its first product registration in China with Crystawash Extend, its long-lasting sanitiser. China launches are generally highly sought after, and this announcement should provide access to the larger offline retail and hospitals segments (c 75% of the over-the-counter (OTC) market in China). Currently AFT only has an online retail presence in China (under the Cross Border E-Commerce OTC scheme).

• Aged care provider Estia Health (EHE AU) has appointed UBS to advise on Bain Capital’s $3.00/share non-binding proposal.
• The indicative  Offer arrives a little over two months after Kerry Stokes-backed Seven Group Holdings (SVW AU) off-loaded its 10% stake at ~ $2.00/share.
• Separately, Regal Fund announced it has taken a 7% stake.

• Zydus Lifesciences Ltd (ZYDUSLIF IN) reported total revenue of INR43.6B, up by 20% YoY and 6% QoQ, in Q3FY23. Key markets, India and the U.S. continued to deliver robust performance.
• U.S. business is on track to register QoQ growth in near-term, with the launches of new products. Zydus plans to launch 2–3 transdermal products in U.S. in FY24.
• For its India business, the company aims to outperform the industry growth sustainably in the medium to long term. Lipaglyn is expected to be among top 25 products of India.

• This is our first report on Hologic, Inc., a renowned medical technology giant focused on women’s health.
• However, Breast Health lost 5.2%, indicating that its recovery from supply chain headwinds caused by chips is in progress.
• Their Women’s Health molecular diagnostics and cytology basis enable sustainable growth, foster beneficial connections with leading labs and key opinion leaders, and open the door for further innovative products.

• Hologic, Inc. is a well-known medical technology giant focused on women’s health.
• In Diagnostics, they maintained top positions in key product categories for women’s health, like STIs and cervical cancer.
• Their Women’s Health molecular diagnostics and cytology basis enable sustainable growth, foster beneficial connections with leading labs and key opinion leaders, and open the door for further innovative products.

• WuXi Bio’s performance growth is obviously decreasing. Based on customer structure/development trend, overseas biotech is the main growth point,which means WuXi Bio would be more vulnerable to the external financing environment.
• WuXi Bio expands manufacturing capacity aggressively through new construction/acquisitions. An important assumption is WuXi Bio can continue receiving overseas orders, otherwise its CDMO production capacity would be considered excessive.
• Due to IRA,whether US market would reflect a slowdown in growth of healthcare spending, thereby depressing the potential return on drug R&D? This is a fatal blow to China CXO.

• Hanmi Pharm (128940 KS) posted revenue of KRW1.33T in 2022, the largest ever in the company’s history. Strong product competitiveness driven by high R&D investment strengthened Hanmi’s dominant industry positioning.
• In October 2022, Hanmi’s US partner Spectrum Pharmaceuticals launched Rolvedon in the U.S. market. During 4Q22, Rolvedon generated revenue of $10.1M. Rolvedon is expected to report $100M revenue this year.
• By leveraging on its biopharmaceutical development and manufacturing capabilities, Hanmi plans to launch a large-scale CMO and CDMO, which can be the new growth engines of the company.

• Kelun-Biotech did not get widespread attention until it reached three license and collaboration agreements with Merck, with upfront and milestone payments totaling up to US$11.8 billion.
• The remaining products have limited investment value. After Kelun-Biotech out-licensed all of its valuable core assets in pipeline, it could mainly remain at the stage of biotech in the future.
• The original core R&D team members have left, which means the “root of Kelun-Biotech is broken”. The lack of sustainable follow-up R&D capability would have negative impact on valuation performance.  

• Estia Health (EHE AU) confirmed it has received a non-binding indicative proposal from Bain Capital at A$3.00 per share, a 28.2% premium to the undisturbed price (23 March).
• The offer is attractive in comparison to historical share prices and multiples and implies a premium to Regis Healthcare (REG AU)’s (the key peer) multiples.  
• However, the offer is light in comparison to precedent transactions multiples. The largest shareholder has also suggested the terms are light, which suggests a requirement for a bump.

• Following Cellivery Therapeutics (268600 KS) designation as an Administrative Issue and an Investment Attention Issue, the stock will be deleted from the KOSDAQ 150 Index and replaced with Humasis (205470 KS).
• The timing of the index change is currently uncertain but will be implemented latest by the close of trading on 17 April.
• Humasis (205470 KS) was limit up on Friday following the ex-date of a 1:3 scrip issue. The stock could continue to move higher over the next week.

• 2023 will be a transitional year for SD Biosensor (137310 KS), with revenue and earnings taking a massive hit due to the declining revenue contribution of the COVID-19 tests.
• The company is reaping the benefits of its continuous effort in adding new growth engines through M&A and global expansion of its all-in-one molecular diagnostic system called the Standard M10.
• SD Biosensor is set to enter the US market through the acquisition of Meridian. With ~40% share of the global IVD market, the US has big potential.

Immix Biopharma has announced additional data from the ongoing Phase Ib/II open-label NEXICART-1 trial investigating the company’s CAR-T therapy, NXC-201, for the treatment of multiple myeloma (MM) and light chain amyloidosis (ALA). The latest data from the study are related to a subset of the trial population with ALA (n=8) in which all patients have demonstrated a 100% complete hematologic response and 100% organ response rate. NXC-201 also continues to demonstrate a favorable safety profile, which management believes provides the therapy with potential to be used as an outpatient treatment. In our view, this could be an advantage compared to existing CAR-T therapies, which require specialized dosing centers and diligent patient monitoring post treatment.

• China approved its first homegrown Covid-19 vaccine using the advanced mRNA technology, months after the country pivoted from its “zero-Covid” strategy toward living with the virus.
• The vaccine, developed by CSPC Pharmaceutical Group Ltd., was approved for emergency use by the National Medical Products Administration.
• The shot, known as SYS6006, primarily targets the omicron variant BA.5 and can be stored at 2 to 8 degrees Celsius (36 to 46 degrees Fahrenheit) “for a long time,”.

• If WuXi Chemistry’s performance shows downward trend, the overall performance growth won’t be satisfactory. The negative growth of WuXi DDSU means that ineffective competition for domestic innovative drugs is decreasing.
• The asset structure is shifting from light asset to heavy asset.It’s particularly crucial whether business model of “one-stop end-to-end service+royalty income” can enable WuXi AppTec to explore new growth points. 
• The current sentiment on CXO is “fragile” because CXO doesn’t have performance sustainability and stability, with “risk discount” problem. Its valuation haven’t reached inflection point. Without industry beta,alpha is useless.

In an unexpected move, Context Therapeutics has announced that it will be discontinuing further development work on its ONA-XR program and prioritize the development of its novel preclinical bispecific CLDN6xCD3 antibody, CTIM-76. While we view the news as disappointing given efficacy data in the OATH study were encouraging, we understand the need to prioritize safety for patients. With a market cap of $11m, Context is trading well below cash levels (end-FY22 cash balance of $35.5m). We have withdrawn our estimates and will revisit our model assumptions and overall valuation in due course. We note that the discontinuation of the ONA-XR programs allows Context to extend its cash runway to late 2024 (versus early 2024 previously), well past the planned IND filing of CTIM-76 in Q124.