Daily Brief Health Care: Yichang HEC Changjiang Pharma, Livzon Pharmaceutical Group In, Basilea Pharmaceutica Ag, China Shineway Pharmaceutical, InMed Pharmaceuticals and more

• Yichang HEC Changjiang Pharma (1558 HK) reported a whopping 148% YoY growth in revenue to RMB3,209M in 1H23. Net profit rebounded to RMB3,209M from a loss of RMB33M in 1H22.
• In H1 2023, revenue from Kewei, approved for first-line treatment of influenza, jumped 186% YoY to RMB2,881M, representing ~90% of total revenue, mainly due to spiking flu cases in China.
• Recently, the company obtained approval for premixed Protamine human insulin injection and submitted marketing application for its self-developed product, Yiqibuvir for the treatment of chronic Hepatitis C in China.

• Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. 
• This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year’s financial results.
• We analyzed the performance of Livzon Pharmaceutical Group In (000513 CH),BGI Genomics (300676 CH) and Jinxin Fertility Group (1951 HK) based on their 23H1 reports, and adjusted our forecast accordingly.

Basilea has announced that the results from its Phase III trial (ERADICATE) for ceftobiprole have been published the New England Journal of Medicine, a high-impact peer-reviewed medical journal. While these trial results were first shared in July 2022, we believe that the publication highlights positive data from the study as management awaits a regulatory decision on US approval. Basilea filed its new drug application (NDA) with the FDA for ceftobiprole in August 2023, and the ERADICATE study evaluated its application for Staphylococcus aureus bacteraemia (SAB), one of the three indications Basilea is seeking approval for. Management expects a decision from the FDA by Q224, potentially representing a significant catalyst for the company.

• Shineway’s 23H1 performance exceeded expectations. High growth of injection products/TCM formula granules was commendable.But as pandemic is under control, sales of Shineway’s respiratory system prescription medications would decrease in 23H2.
• The national VBP of TCM formula granules and the anti-corruption campaign in 23H2 could be the short-term headwinds to Shineway’s performance, which could lead to lower-than-expected 23H2 performance growth. 
• China’s favorable policies will provide strong support for the development of TCM industry. Shineway’s TCM formula granules business would have outstanding future growth. So, we’re optimistic about Shineway’s long-term outlook.