Daily Brief Health Care: AFT Pharmaceuticals, OSE Immuno, Remegen and more

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.