Daily Brief Health Care: Mankind Pharma, Boryung Pharmaceutical, ADICON Holdings Limited, EMIS Group PLC, Shanghai Junshi Bioscience Co. Ltd., Unitedhealth Group and more

• Mankind Pharma (6596876Z IN), a pharmaceutical company, is seeking to raise up to Rs45 billion (US$550 million) in April, according to press reports.
• In Mankind Pharma IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The key elements of the bear case rest on worrying recent developments, FCF burn, rise in inventory days and a steady decline in RoCE.   

• Boryung Pharmaceutical (003850 KS) reported stellar Q4 results, with revenue increasing 21% YoY, driven prescription drugs. 2022 revenue and operating profit surged 20%+ YoY and surpassed guidance.
• Boryung has guided for 2023 revenue and operating profit of KRW810 billion and KRW61 billion, representing growth of 12% and 1%, YoY, respectively.
• Driven by in-licensed drugs and pipeline progress, Boryung’s target of KRW1 trillion revenue and KRW200 billion operating profit by 2026, seems achievable.

• ADICON Holdings Limited (ADI HK) is looking to raise about US$400m in its upcoming HK IPO. 
• Adicon Holdings is one of the top three independent clinical laboratory (ICL) service providers in China in terms of total revenue during the Track Record Period, according to F&S. 
• In our previous notes, we looked at the company’s past performance. In this note, we talk about peer comparison.

The Competition and Markets Authority (CMA) has rejected the remedy proposed by United Health (the bidder) and EMIS to reduce the risks to competition and has announced it is launching a Phase 2 investigation into the acquisition. The bidder and EMIS have confirmed they will proceed with the Phase 2 investigation. Due to the investigation, they have extended the long stop date for the deal and extended the period during which EMIS shareholders will be entitled to dividends by one year.

• We continue to view JUNSHI’s Phase III pipeline, consisting of Senaparib (JS109/IMP4297)(PARP), Ongericimab (JS002)(PCSK9), Bevacizumab (biosimilar) and VV116 (COVID)(RdRp) as unexciting; 
• Phase I/II drug Tifcemalimab (TAB004/JS004)(BTLA mAb) is interesting, but may not last to reach product sales;
• We acknowledge the bad news has already been priced in and raise the TP to HK$21, but JUNSHI still has unfavourable risk reward profile in our opinion.

• UnitedHealth Group Inc.’s first-quarter earnings report might settle lower than anticipated as prices on long-term solutions have softened.
• The company has a rich history of beating earnings estimates, and its cash-based earnings exceeded its accrual-based income in 2022.
• UnitedHealth Group Incorporated (NYSE:UNH) is set to release its first-quarter earnings results before trading opens on Friday, the 14th.