Anxin International - Pharmaceutical Industry Biweekly Report: The results of Chinese medicine decoction pieces combined selection landing, 2023ASCO abstract released

1. Hang Seng Index fell 2.57% in the first two weeks (2023/05/22 to 2023/06/02), with all 12 Hang Seng industries falling. Among them, the Hang Seng healthcare sector fell 1.51%, outperforming the Hang Seng Index by 1.06 percentage points, ranking third among the 12 Hang Seng industries

2. On May 22, the results of the first provincial alliance procurement of traditional Chinese medicine decoction pieces were released, 21 varieties of traditional Chinese medicine decoction pieces, a total of 100 enterprises of the product to be selected, the price to be selected fell by an average of 29.5%, the largest drop of 56.5%, the price reduction will promote the industry to the direction of high quality price development.

3. On May 26, 2023 ASCO abstract was published online, and a number of Hong Kong listed pharmaceutical companies announced the progress of core pipelines. The clinical progress data of many pharmaceutical companies' product pipelines, such as Cinda Biological IBI110, Colombotai (which has passed the hearing of the Hong Kong Stock Exchange) SKB-264, Kang Fong Biological AK104/AK117, and Keji Pharmaceutical CTO181, are worthy of attention.

Last week's market review:

The Hang Seng Index fell 2.57% in the first two weeks (2023/05/22 to 2023/06/02), with all 12 Hang Seng industries falling. Among them, the Hang Seng healthcare sector fell 1.51%, outperforming the Hang Seng Index by 1.06 percentage points, ranking third among the 12 Hang Seng industries.

In terms of individual stocks, 75 Hang Seng healthcare companies rose and 149 fell. Among them, Yongtai Biological B(6978.HK) increased by 28.29% in a single week, ranking first in the industry. In addition, Mace Health (2415.HK), Lepu Bio-B (2157.HK), Beihai Kangcheng-B (1228.HK) led the gains, up 25.12%, 22.44% and 20.81% respectively. Liangqing Holdings (8603.HK) fell 43.13% in a week, ranking first in the industry decline. In addition, Runmaide -B(2297.HK), Beikang Medical -B(2170.HK), Yeju Medical (6929.HK) fell relatively large.

1) On May 22, the results of the first provincial alliance procurement of traditional Chinese medicine decoction pieces were released, and the products of 21 varieties of traditional Chinese medicine decoction pieces were selected by 100 enterprises, and the average price of the selected products fell by 29.5%, with the largest drop of 56.5%. (Shandong Government Website)

2) On May 22, Novo Nordisk announced the results of the Phase 3a OASIS study of Smetaglur 50mq tablets for weight loss, which included a total of 667 patients to evaluate the weight loss and safety of oral Smetaglur (50mg QD) versus placebo. The results showed that after 68 weeks, patients in the experimental and placebo groups lost 17.4% and 1.8% of their body weight, respectively, and 89.2% and 24.5% of patients in the experimental and placebo groups lost more than 5% of their body weight after 68 weeks. The 50mg tablet has a good safety and tolerability profile, with the most common adverse event being gastrointestinal reactions, consistent with GLP-1 receptor agonist class drugs. (Novo Nordisk website)

3) On May 26, the 2023ASCO abstract was published online, and a number of Hong Kong listed pharmaceutical companies announced the progress of the core pipeline:

1. Beigene announced Zanidatamab(Her2 double antibody), BGB11417(Bc-2 inhibitor), ociperlimab(TIGl monoclonal antibody), BGB-A445 (OX40 monoclonal antibody), Tirellizumab (PD1 monoclonal antibody) and Zbutinib (BTK) Inhibitor), a number of clinical data;

2. Kangfang Biological announced a number of clinical research data of Apdun, Cardonilide (PD1/CTLA4 dual antibody), Evoxil (PD1NEGF dual antibody), AK117(CD47 monoantibody);

3. Zaiding Pharmaceutical announced a number of clinical evidences of nilapalib (PARP inhibitor), rapitinib (KIT/PDGFRa inhibitor), ZL-1211(Claudin 18.2 mab);

4. Corning & Jerry's announced the Phase 2 clinical data of the combination of KN026 (Her2 double antibody) and KNO46 (PDL1/CTLA4 double antibody) for the first-line treatment of locally advanced unresectable or metastatic HER2-positive solid tumors;

5 Cinda Biological announced a number of clinical data of B1351 (Cinda/Jingfang Kras G12c inhibitor), Sindelimab (PD1 monoclonal antibody), B1110(LAG3 monoclonal antibody), IB1939 (TIGIT monoclonal antibody), CT103A(Cinda/Tsim,BCMACART);

6. Fuhong Hanlin announced multiple clinical study data of HLX26 (LAG-3 monoclonal antibody), HLXO7 (EGFR monoclonal antibody), HLX208(BRAF V600E small molecule) and Srulizumab (PD1 monoclonal antibody);

7. Hanson Pharma announced multiple clinical study data of HS-20093(B7-H3ADC), HS-10241 (c-Met inhibitor), and HS-10382 (BCRABL inhibitor);

8. Colombotech (which has passed the HKEX hearing) has published a number of clinical research papers on SKB-264 (TROP-2 ADC) and KL590586 (RET inhibitor);

9. APG-2449 (FAK/ROS1/ALK inhibitor), Orebatinib (BCR-ABL inhibitor), APG-2575 (Bc-2 inhibitor), and APG-115(MDM2 inhibitor) have been published in a number of clinical studies.

10. The company announced the Phase B clinical study data of Dorustobar(CTLA4 heavy chain antibody) for hepatocellular carcinoma;

11. Cstone Pharmaceutical announced Phase 112 clinical study data of avapitinib (PDGFRA/Kit inhibitor) for GIST (gastrointestinal stromal tumor);

12. Monobiotics announced data from a number of clinical studies of triprilizumab (PD1mab);

13. Rongchang Bio-announced multiple clinical study data of Vedicetuzumab (HER2ADC);

14. Chi-med announced a number of clinical study data of vermonitinib (VEGFR inhibitor);

15. Fosun Pharmaceutical announced a number of clinical study data of FCN-159 (MEK112 inhibitor) and FS-1502 (Her2 ADC);

16. Stone Pharmaceutical Group announced multiple clinical study data of ALMB-0168 (connexin 43 monoclonal antibody) and SYSA1801 (Claudin 18.2ADC);

17. Keji Pharmaceutical announced two clinical study data of CT041 (Claudin 18.2 CAR-T) and CTO180(GPC3 CAR-T);

18. Release of data from two clinical studies of ABSK021 (CSF-1R inhibitor);

19. Transun Group announced data from multiple clinical studies of TST001 (Claudin 18.2 monoclonal antibody) and TSTO05 (PD-L1/TGF-B double antibody). (ASCO official website)

[1877.HK/688180.SH] Today, the company announced that its new NDA application for anti-PD1 triplimab in combination with albumin-binding paclitaxel for initial treatment of metastatic or relapsed metastatic mTNBC with PDL1 positive (CPS≥1) was accepted by the NMPA.

[China Biopharmaceutical (1177.HK)] On May 23, the company announced that its Class 1 anti-tumor innovative drug TQ-B3525 tablets of PI3Ko/a dual inhibitor) submitted an NDA application to NMPA and was accepted. The therapeutic indication is for relapsed or refractory follicular lymphoma that has failed at least two previous systemic therapies.

[Kang Zhe Pharmaceutical (0867.HK)] On May 30, the Company announced that its Tiricizumab targeting the L-23D19 subunit was approved by NMPA for the treatment of moderate to severe plaque Silver Shield disease suitable for systemic therapy or phototherapy.

[Conoa (2162.HK)] On May 30, the company announced that its Phase III confirmatory clinical study of IL4R monoclonal antibody CM310 for the treatment of moderate to severe atopic dermatitis has completed the unblinding and preliminary statistical analysis, and the company is continuing to advance and collect the long-term efficacy and safety data of this phase III clinical study according to the clinical protocol. There is no need to recruit additional patients for the data collection.

On June 2, the Company announced that its NDA application against PCSK9 Inucidumab (AK102) for the treatment of primary hypercholesterolemia and mixed hyperlipidemia and heterozygous familial hypercholesterolemia was accepted by the NMPA.

In the future, it is recommended to focus on the following tracks:

1) Innovative drugs: Innovation is still the main theme, and it is necessary to closely track the progress of clinical trials, the volume of commercial varieties and the overseas authorization of products of relevant enterprises. It is recommended to pay attention to the sufficient cash in hand and collect the negative impact of the basic clearing of backup innovative varieties to open the second growth curve of Bigpharma, such as China Biopharmaceutical (1177.HK). Biopharma with rich pipeline layout and commercial products in the rapid volume stage, such as Xinda Biology (1801.HK), Hutchison Pharmaceutical (0013.HK), and Nuocheng Jianhua (9969.HK) : Blockbuster potential varieties will soon be submitted for approval, and Biotech products in the research and clinical progress are smooth, such as Konoya (2162.HK).

2) Medical devices: there are many subdivisions, focusing on sub-industries with low localization rate, good competition pattern and high technical barriers. It is recommended to pay attention to minimally invasive medical treatment (0853.HK).

3) Medical services and Chinese medicine: The policy supports the inheritance and innovative development of Chinese medicine. There are broad prospects for future growth in related demand. Pay attention to the performance resilience of the medical service sector after the outbreak has eased. It is recommended to pay attention to Gu Sheng Tang (2273.HK), Hygia Medical (6078.HK), etc.

4)CXO: The current valuation of the CXO industry is relatively reasonable, the configuration of cost-effective, the domestic industrial chain has global competitive advantages, benefiting from the growth of downstream demand at home and abroad, the industry boom can be maintained. Long-term recommended integration industry leaders Pharmatech (2359.HK), Pharmatech (3759.HK) and so on.

5) Medical beauty: In the future, under the catalyst of multiple factors such as more scientific and accurate epidemic prevention and control policies, government issuance of consumer vouchers to stimulate consumption and expand domestic demand, and relatively reasonable valuation of the medical beauty sector, the medical beauty sector is expected to usher in valuation restoration. It is recommended to pay attention to Juzi Biology (2367.HK), Beauty Farm Medical health (2373.HK) and so on.