In today’s briefing:
- KRX New Deal Index Rebalance Preview: Interesting Changes Emerging
- Consolidation Likely, But Little Reason to Be Bearish; Buys Within Biotech, Latin American Banks
- 3D Medicines (1244.HK) – The Bubble Will Eventually Burst
- Polaris Group (6550 TT): Preparing for Filing Marketing Approval of First Drug Candidate in US
KRX New Deal Index Rebalance Preview: Interesting Changes Emerging
- The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
- There is one change currently for each of the Secondary Battery, Bio, Internet and Game indices. Plus there are a couple of changes for the BBIG indices.
- SK Biopharmaceuticals Co Ltd (326030 KS) has overtaken SK Bioscience (302440 KS) on average market cap and there will be large flows on both stocks at the rebalance.
Consolidation Likely, But Little Reason to Be Bearish; Buys Within Biotech, Latin American Banks
- The S&P 500 is 1% above the 4300-4325 area which we anticipated would cap upside for 2023.
- Our view since our 5/30/23 ETF Pathfinder is that we cannot be bearish if the SPX is above 4050, and we subsequently moved that line-in-the-sand up to 4165-4200 on 6/6/23.
- We are moving that threshold up to 4300, which is short-term support to watch; a break below it could bring selling pressure.
3D Medicines (1244.HK) – The Bubble Will Eventually Burst
- The pricing of core product Envafolimab doesn’t have an advantage over competitors. Its market opportunities and profit margins are very limited if seen from both production side and sales side.
- 3DMed clearly faces financial pressure, and may not smoothly promote other pipelines. Under current market environment, it’s almost impossible to achieve substantial refinancing. The survival of 3DMed cannot be guaranteed.
- The fundamentals of 3DMed are not strong enough to justify high valuation. Current share price is clearly overvalued.Eventually the market will return to rationality. We recommend investors offload in time.
Polaris Group (6550 TT): Preparing for Filing Marketing Approval of First Drug Candidate in US
- Polaris Group (6550 TT) is in a process to file first BLA to the FDA for its lead drug candidate ADI-PEG 20 as a potential treatment of malignant pleural Mesothelioma.
- Although Polaris announced positive top-line result from Phase 2/3 study of ADI-PEG 20, overall survival was shorter than existing FDA-approved treatment, causing a massive sell-off in Polaris shares.
- However, the results are not fully comparable due to the different mechanism of action of the drugs under trial. Future growth prospect is not reflected in current share price performance.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
