Daily Brief Health Care: WuXi XDC Cayman , TSE Tokyo Price Index TOPIX, HighTide Therapeutics, CanSino Biologics , Oryzon Genomics, Fresenius Medical Care & and more

• WuXi XDC Cayman (1877628D HK), a leading contract research, development and manufacturing organization (CRDMO), is pre-marketing an HKEx IPO to raise US$500 million, according to press reports.
• We previously discussed the IPO in WuXi XDC IPO: The Bull Case and WuXi XDC IPO: The Bear Case.
• In this note, we present our forecasts and take the first look at WuXi XDC’s potential valuation range.

• WuXi XDC Cayman (1877628D HK) is looking to raise around US$500m in its upcoming Hong Kong IPO.
• WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
• In this note, we share our updated thoughts on valuation and look at bull/bear scenarios for WXDC’s earnings.

• Even after the “TSE’s request,” the average P/B of listed companies has not increased. In addition, ROE, which can be considered a driver for corporate value expansion, has remained flat.
• Japanese managers tend to be caught up in formalistic thinking about whether or not a company is listed, and whether or not it’s listed on the highest market or not.
• Instead of being caught up in formalistic thinking, I would like managers to seriously rethink the value of the company and what it means to be listed.

• WuXi XDC, a leading CRDMO focused on the global ADC and bioconjugate market, filed to go public in Hong Kong and plans to raise up to $500M.
• The company is expected to IPO in November or December at the latest. Morgan Stanley, Goldman Sachs, and J.P. Morgan are the lead underwriters. The offering may attract investor interest.
• WuXi Biologics will spin off its ADC business, and WuXi XDC will raise capital through IPO to finance the construction of new facilities in Singapore and expand capacity in China.

• HighTide Therapeutics, a China-based clinical-stage biotechnology company, plans to raise up to US$200m via a Hong Kong listing.
• In this note, we examine the company’s core products, namely HTD1801, for the indication of NASH and T2DM.
• We are not yet convinced of the product’s prospects. We also think the management and pre-IPO investors are of mediocre quality.

• In 23Q3, CanSino’s revenue returned to positive growth and net loss narrowed as MCV4 sales exceeded expectations. Such strong growth momentum is expected to continue in 2024.
• As negative impact of COVID-19 assets impairment on revenue/asset sides would basically come to an end this year,2024 performance would reflect growth on the basis of this year’s low base.
• The potential resurgence of pandemic/influenza virus and PCV13i NDA submission could be catalysts. Performance turning point could appear in 2025.The cooperation with Gates Foundation would open up the internationalization prospect.

Oryzon’s Q323 results recapped the clinical progression across its drug development pipeline. The company continues to develop therapies that address unmet needs related to the central nervous system (CNS) and oncology. As noted previously, an important development was the positive safety data for the PORTICO trial, assessing vafidemstat in patients with borderline personality disorder (BPD). Oryzon continues to enrol patients for its lead oncology trial (FRIDA), investigating iadademstat as a potential treatment for acute myeloid leukaemia (AML) and an update is expected in Q224. Based on current visibility, we have adjusted our FY23 operating loss estimates to €5.4m (vs €3.8m previously). Top-line data from PORTICO and FRIDA are expected to be the next key catalysts. Gross cash at the end of Q323 stood at US$8.8m (€8.4m), down from US$14.6m in H123, which we anticipate should fund the company’s operations into Q124. We value Oryzon at €900.3m or €15.4/share (up from €874.1m or €15.6/share).

• Underlying market is set to double – 7m people on maintenance dialysis by 2035, implying a CAGR of 6%
• Stock price decline is “irrational”. There will be no impact for 10-15 years!
• Lots of investor interest, with many IR roadshows in the coming weeks. IR believes the share price overhang will remain for longer.