Core Viewpoint - On November 3, 2023, Innovent Biologics announced the termination of the subscription agreement between Lostrancos and Fortvita, following a significant drop in market value of approximately HKD 15 billion over four consecutive days [1][2] Group 1: Company Actions and Responses - The company reiterated its positive vision for international business development and decided not to proceed with the subscription due to mixed feedback from shareholders [1][2] - CFO You Fei stated that Fortvita currently has no financing plans and expressed a willingness to consider investor opinions for more acceptable methods of supporting international development [1][2] - Following the announcement, Innovent's stock price surged by 8.99% to HKD 38.200 per share, with a market capitalization of HKD 62.5 billion [1] Group 2: Financial Details and Market Reactions - The initial subscription involved a capital increase by management through Lostrancos to Fortvita, acquiring 12.8083 million new Pre-A series preferred shares for USD 20.5 million, valuing Fortvita at a net asset basis with no premium [2] - Investors raised concerns about the perceived undervaluation of Fortvita, which holds significant assets that are currently under development [2] - Innovent's product revenue exceeded RMB 2.3 billion in Q3 2023, marking a year-on-year growth of over 40%, with total revenue for the first three quarters of 2024 reaching RMB 6.111 billion, surpassing the full-year revenue of RMB 5.728 billion in 2023 [4] Group 3: Product Pipeline and Market Position - Fortvita has applied for patents related to several key pipelines, including Claudin18.2/CD3 bispecific antibody (IBI389), Claudin18.2 ADC (IBI343), and PD-1/IL-2 bispecific antibody (IBI363), all of which are in the oncology field [3] - IBI363 is noted as a first-in-class product with promising Phase I trial data and is currently undergoing Phase II trials in the U.S., having received FDA fast track designation for melanoma [3] - The company plans to launch four products by 2025, including those in collaboration with partners, ensuring a steady pipeline for future growth [4]

Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted to HKD 42.45 [2][3][10]. Core Insights - The company has shown impressive product sales performance, with a revenue increase of over 40% year-on-year to RMB 2.3 billion in the third quarter, driven by strong sales of its oncology drug, Dabu Shu, and the introduction of a new lung cancer drug, Dabu Te [1][2]. - The company is expected to maintain rapid revenue growth, with a projected annual revenue increase of 43.1% to RMB 8.2 billion for the full year [1]. - Concerns have been raised regarding the company's governance, particularly related to the lack of transparency in the announcement of the sale of a 20.39% stake in its subsidiary Fortvita, which is intended to support international business efforts [1][2]. Financial Summary - The company’s total revenue for 2024 is forecasted at RMB 8.459 billion, with growth rates of 36.2% and 36.3% expected for 2025 and 2026, respectively [2][7]. - Shareholder net loss for 2024 is projected to be RMB 708 million, with a return to profitability expected in 2025 and 2026, with net profits of RMB 1.9 billion and RMB 4.5 billion, respectively [2][7]. - The company’s cash flow projections indicate a gradual improvement, with free cash flow turning positive in the coming years [5][7]. Market Performance - The stock closed at HKD 33.80, with a market capitalization of HKD 55.284 billion and a circulating share ratio of 84.94% [3][10]. - The stock has traded within a 52-week range of HKD 28.3 to HKD 52.15, indicating volatility in market sentiment [3][10]. Valuation Metrics - The report adjusts the DCF model's beta coefficient to 1.1 and the WACC to 8.2%, reflecting governance risks [2][5]. - The intrinsic value per share is estimated at HKD 42.45, aligning with the target price set by the report [5][6].

Company Overview - Innovent Biologics (01801 HK) experienced a significant market value drop of over HKD 17 billion (approximately RMB 15 57 billion) in the first four trading days of the week despite releasing a strong earnings report [1] - The company's stock rebounded on the last trading day of the week after a controversial transaction involving the purchase of a subsidiary's shares by the chairman at a perceived low price [1] Controversial Transaction - The chairman and CEO Yu Dechao through his company Lostrancos acquired 20 39% of Fortvita a subsidiary of Innovent Biologics for USD 20 5 million (approximately RMB 146 million) diluting Innovent's stake to 79 61% [1] - The transaction was valued using the net asset method with Fortvita's total assets valued at approximately USD 234 million and total liabilities at USD 154 million resulting in a valuation of USD 80 026 million [2] - Investors were concerned about the lack of premium based on future development expectations as the valuation was essentially the total assets minus total liabilities [2] Market Reaction - The stock price of Innovent Biologics fell for four consecutive trading days starting from October 28 despite the company reporting a 40% year-over-year increase in total product revenue to over RMB 2 3 billion in Q3 [3] - The company's market value dropped from HKD 72 377 billion to HKD 55 284 billion by October 31 before slightly recovering to HKD 57 329 billion on November 1 [4] Management Response - Yu Dechao apologized for not communicating the related-party transaction with investors earlier and emphasized the early-stage nature of Fortvita's pipeline assets [5] - The management explained that using their own funds to invest in Fortvita demonstrated their commitment to internationalization and avoided further dilution of the company's shares [5] - The CFO You Fei stated that the valuation of Fortvita was based on an independent third-party assessment reflecting the current state of the assets [5] Internationalization Strategy - Fortvita holds the overseas rights to several promising R&D products including IBI363 and IBI343 with IBI363 recently receiving Fast Track designation from the US FDA [3] - The company has been focusing on international expansion as a key strategy for revenue generation with Fortvita serving as the platform for overseas business [2] - Despite the challenges Innovent Biologics has a cash reserve of approximately RMB 10 1 billion as of the end of June which may support its international expansion efforts [6] Challenges in Overseas Markets - Innovent Biologics has faced setbacks in its internationalization efforts including the rejection of its PD1 drug sintilimab by the US FDA in early 2022 [7] - The company has not yet achieved Proof of Concept (POC) recognition from the FDA for any of its overseas assets [7] - Some high-potential products such as CD47 and TIGIT have been removed from the company's pipeline due to lack of progress [7]

财联社10月30日讯（编辑 冯轶） 近日，港股生物医药明星个股信达生物(01801.HK)因深陷"资产贱 卖"舆论漩涡持续受到市场关注，公司股价也连续重挫。 截至10月30日收盘，信达生物连续3个交易日走低，累跌约20%，市值蒸发超过140亿港元。而这一切仅 仅是源于一桩约合1.6亿港元的收购交易。 公告发布后，这笔交易迅速引来市场和公司小股东的质疑。 一方面，由管理层收购上市公司资产本身就涉及关联交易，但信达生物甚至没有提前举行股东大会进行 商议，便直接公告。 另一方面，资料显示Fortvita作为信达生物推动国际业务的平台，承担着市场对公司业务出海的预期。 据了解Fortvita目前还持有信达生物研发管线中PD-1/IL2α融合蛋白IBI363的部分海外权益。9月4日， IBI363刚刚获得美国FDA授予快速通道资格。信达生物正在中国、美国、澳大利亚同时开展临床研究。 更令市场不解的是，本次收购标的资产Fortvita的估值采用的是净资产价格。这也意味着，本次交易中 收购方基本不需要支付任何溢价，从而也引发了市场关于"贱卖资产"的担忧。 面对市场的诸多质疑，信达生物在10月29日举行的"中信建投医药|信达 ...

Core Viewpoint - Innovent Biologics announced promising results from a Phase 2 clinical study of picankibart, an IL-23p19 antibody, showing robust efficacy and a favorable safety profile in patients with plaque psoriasis who had inadequate responses to previous biologic treatments [1][2][5]. Clinical Study Results - The study involved 152 patients who switched from other biologics to picankibart, with 64.6% of patients achieving skin clearance or near clearance after 16 weeks of treatment [2][3]. - The primary endpoint was met with nearly half (48.2%) of patients with prior inadequate responses achieving an sPGA score of 0 or 1 and BSA of <3% [5]. - Secondary endpoints showed that 64.6% of patients with baseline sPGA of ≥2 and BSA of ≥3% achieved sPGA of 0 or 1 [5]. Patient Demographics - Among the 152 enrolled patients, 54.6% were classified as inadequate responders, with a median disease duration of 12 years [4]. - A significant majority (96.4%) of these patients had previously been treated with IL-17 inhibitors [4]. Safety Profile - The safety profile of picankibart was favorable, comparable to other studies, with no new safety signals identified [6]. - Long-term follow-up is ongoing to assess the full data on efficacy and safety [6]. Future Developments - Innovent plans to advance the Phase 3 clinical trial of picankibart, which is currently under review for a New Drug Application (NDA) by the NMPA [7][9]. - The company aims to address unmet clinical needs in psoriasis treatment and provide more options for patients with inadequate responses to existing biologics [7][9]. About Psoriasis - Psoriasis is a chronic inflammatory disease affecting a significant portion of the population, with over 7 million patients in China alone [8]. - Biologics have become the primary systemic treatment for moderate to severe psoriasis, with IL-23 inhibitors showing rapid onset and robust efficacy [8]. About Picankibart - Picankibart (IBI112) is a monoclonal antibody developed by Innovent, targeting the IL-23p19 subunit, with potential applications in treating psoriasis and other autoimmune diseases [9]. - Multiple clinical studies are ongoing, including a Phase 3 study for moderate to severe plaque psoriasis, which has already met its endpoints [9]. About Innovent - Innovent is a leading biopharmaceutical company focused on developing high-quality medicines for various diseases, having launched 11 products and with several new drug applications under regulatory review [10][11].

Investment Rating - The report assigns a "Buy" rating for the company, Xinda Biopharma (01801.HK), marking its first coverage [2][6]. Core Insights - Xinda Biopharma has established itself as a comprehensive biopharma entity with significant commercialization achievements. The company is expected to reach a profitability inflection point as new products continue to receive approvals [3][4]. - The company has a robust pipeline in oncology, particularly focusing on IO+ADC strategies, with promising data emerging from its self-developed products [3][4]. - In non-oncology areas, the company is advancing treatments for obesity and Type 2 Diabetes Mellitus (T2DM), with major products expected to be approved within 1-2 years, providing new growth momentum [3][4]. - Overall, the company is viewed as undervalued in the market, with strong growth potential as a leading innovative drug company [3][4]. Summary by Sections Company Overview - Founded in August 2011, Xinda Biopharma has become a significant player in the biopharma sector, with 11 commercialized products and several others in various stages of clinical development [18][19]. - The company has established strategic partnerships with major international firms, enhancing its research and development capabilities [18][19]. Oncology Pipeline - The company has a deep focus on the oncology pipeline, with its PD-1 monoclonal antibody, Sintilimab, achieving nearly 2.8 billion yuan in sales in 2023, leading the domestic market [3][4]. - The PD-1/IL-2 dual antibody, IBI363, shows significant efficacy in PD-1 resistant cancer patients, positioning it as a potential leader in second-generation IO therapies [3][4]. - Multiple ADCs are in clinical stages, including IBI343 targeting CLDN18.2, which is in Phase III trials [3][4]. Cardiovascular and Metabolic Pipeline - The GLP-1 dual-target product, Masitide, is progressing well, with NDAs submitted for obesity and T2DM treatments, indicating a substantial market opportunity [3][4]. - The company has also received approval for its PCSK9 monoclonal antibody, marking a significant milestone in treating high cholesterol [3][4]. Autoimmune and Ophthalmology Pipeline - The company is expanding its autoimmune and ophthalmology product lines, with several innovative drugs entering clinical trials [3][4]. - Notable products include IBI302 for age-related macular degeneration and IBI112 for plaque psoriasis, both showing promising clinical data [3][4]. Financial Projections and Valuation - Revenue projections for 2024-2026 are estimated at 80.19 billion, 108.53 billion, and 139.04 billion yuan, with growth rates of 29.22%, 35.34%, and 28.11% respectively [4][6]. - The company is expected to achieve profitability by 2025, with a reasonable equity value estimated at 966.1 billion yuan, corresponding to a target stock price of 64.91 HKD [4][6].

Investment Rating - Buy (First Coverage) [2] Core Views - The company is a leading Biopharma in China, transitioning successfully from Biotech to Biopharma with 11 approved products and a robust pipeline in oncology, immunology, metabolism, and ophthalmology [2] - The oncology segment is a key driver, with a strategy combining IO (Immuno-Oncology) and ADC (Antibody-Drug Conjugate) to solidify its leadership position [2] - Non-oncology pipelines, particularly in cardiovascular, metabolic, and autoimmune diseases, are expected to open new growth curves [3] - The company's revenue is projected to grow significantly, with 2024-2026 revenue estimates of 8.094 billion, 11.327 billion, and 14.551 billion RMB, respectively, representing a CAGR of 30.43%, 39.94%, and 28.46% [3][6] Oncology Segment - The company's PD-1 inhibitor, Sintilimab, is the only PD-1 drug in China that covers first-line treatment for five major cancer types and is included in the national medical insurance [2] - The company is advancing its IO+ADC strategy with promising candidates like IBI363 (PD-1/IL-2), IBI343 (CLDN18.2 ADC), and IBI389 (CLDN18.2/CD3 bispecific antibody), which show potential in overcoming immune resistance and treating cold tumors [2] - IBI363, a PD-1/IL-2 bispecific fusion protein, has shown promising efficacy and safety in clinical trials, particularly in treating immune-resistant non-small cell lung cancer (NSCLC) and melanoma [23][29][34] Non-Oncology Segment - The company's GLP-1R/GCGR dual-target drug, Mazdutide, is a key growth driver, with NDA submissions for obesity and type 2 diabetes in 2024 [3] - In the autoimmune space, the IL-23p19 inhibitor, IBI112, has shown potential as a best-in-class drug for psoriasis, with its NDA submitted in September 2024 [3] - In ophthalmology, IBI311 (IGF-1R) for thyroid eye disease (TED) has submitted its NDA in May 2024, giving the company a first-mover advantage [3] Financial Projections and Valuation - The company's revenue is expected to grow from 8.094 billion RMB in 2024 to 14.551 billion RMB in 2026, with a DCF-based valuation of 93.9 billion RMB, equivalent to 101.5 billion HKD [3][6] - The company is projected to achieve profitability by 2025, driven by its diversified product portfolio and operational efficiency improvements [6][8] Key Catalysts - The commercialization of Mazdutide in 2025 is expected to be a significant growth driver, leveraging the large market potential for GLP-1 drugs in China [3][8] - The advancement of IBI363 in clinical trials and its potential for global expansion could further enhance the company's oncology portfolio [2][29] - The company's focus on operational efficiency and commercialization capabilities is expected to drive sustained growth [6][8]

Clinical Study Results - The primary endpoint of the 12-week induction period was met in a Phase 2 clinical study of picankibart (IBI112) for treating moderately to severely active ulcerative colitis (UC) in Chinese subjects [1] - The study enrolled 150 subjects randomized to receive placebo, picankibart 200 mg, or picankibart 600 mg during the induction period [2] - Clinical remission rates at week 12 were 20.0% for the 200 mg group and 14.0% for the 600 mg group, significantly higher than the 2.0% in the placebo group (p < 0.05) [3] - Clinical response rates were 54.0% for the 200 mg group and 68.0% for the 600 mg group, significantly higher than the 22.0% in the placebo group (p < 0.001) [3] - The maintenance period is ongoing, with continued increases in clinical remission, response, and other efficacy measures compared to the induction period [4] Picankibart (IBI112) Development - Picankibart is a recombinant anti-IL-23p19 antibody injection developed by Innovent [1] - It has shown potential for treating psoriasis, ulcerative colitis, and other autoimmune diseases [7] - Multiple clinical studies are underway, including Phase 3 studies for plaque psoriasis and Phase 2 studies for UC [7] - The NMPA accepted the first NDA for picankibart for treating moderate to severe plaque psoriasis in September 2024 [8] Ulcerative Colitis Market - UC is a chronic inflammatory disease with increasing prevalence in China, currently at 11.6/100,000 [6] - Current treatments include traditional immunosuppressants and biologics, but there are unmet needs due to adverse reactions and loss of response [6] - No IL-23p19 targeted drugs are approved for UC treatment in China, representing a significant market opportunity [6] Innovent Biologics Overview - Innovent is a leading biopharmaceutical company founded in 2011, focusing on oncology, autoimmune, cardiovascular, metabolic, and ophthalmology diseases [9] - The company has launched 11 products, with 5 NDAs under regulatory review and 3 assets in Phase III or pivotal trials [9] - Innovent has partnerships with over 30 global healthcare companies, including Eli Lilly, Sanofi, and Incyte [9]

Investment Rating - The report assigns a "Buy" rating for the company with a 6-month outlook [1] Core Viewpoints - The company's 2024 interim report met expectations with strong product sales growth and multi-sector breakthroughs [1] - Total revenue for 2024H1 reached 3.95 billion yuan, a 46.3% year-on-year increase [1] - Product revenue grew to 3.81 billion yuan, up 55.1% year-on-year [1] - The company demonstrated significant sales efficiency improvements with multiple quarters of high growth [1] Financial Performance - Gross margin improved to 84.1%, up 1.8 percentage points [1] - Sales and marketing expense ratio decreased to 48.6%, down 5.9 percentage points [1] - Management expense ratio reduced to 5.2%, down 4.9 percentage points [1] Pipeline Development - The company made significant progress in weight loss, oncology (ADC, next-gen IO), autoimmune, and ophthalmology fields [1] - Masdutide is expected to become the first domestic GLP-1 dual-target weight loss drug, with NDA submissions in 2024 [1] - IBI343 (CLDN18.2 ADC) and IBI363 (PD-1/IL-2α-bias) showed promising early data in oncology [1] - Picankibart (IL-23p19) is expected to submit NDA in H2 2024 for psoriasis treatment [1] - IBI311 (IGF-1R) is under NDA review, while IBI302 (VEGF/C) 8mg is in Phase III trials [1] Revenue Projections - 2024 revenue forecast increased from 7.225 billion yuan to 7.970 billion yuan [1] - 2025 revenue forecast raised from 9.193 billion yuan to 10.235 billion yuan [1] - 2026 revenue is projected to reach 13.143 billion yuan [1] Profit Projections - 2024 net loss forecast adjusted from -766 million yuan to -756 million yuan [1] - 2025 net profit forecast changed from -170 million yuan to 89 million yuan [1] - 2026 net profit is projected to be 1.003 billion yuan [1]

Core Viewpoint - Innovent Biologics and Jiangsu Aosaikang Pharmaceutical have entered a strategic collaboration for limertinib, a third-generation EGFR TKI for lung cancer treatment, with Innovent obtaining exclusive commercialization rights in mainland China [1][2][4]. Company Overview - Innovent Biologics is a leading biopharmaceutical company founded in 2011, focusing on developing high-quality medicines for various diseases, including oncology [8]. - Jiangsu Aosaikang Pharmaceutical Co. Ltd. specializes in innovative research and development in oncology and other therapeutic areas, with a strong emphasis on small-molecule targeted drugs and biologics [10][11]. Product Details - Limertinib is an orally administered, third-generation EGFR TKI, currently under review by China's National Drug Administration for two indications related to NSCLC [2][6]. - The drug targets adult patients with specific EGFR mutations, which are prevalent in the Chinese population, addressing a significant medical need [5][6]. Clinical Trial Results - A Phase 3 clinical trial comparing limertinib to gefitinib met its primary endpoint, with results expected to be presented at future academic conferences [3][7]. Strategic Collaboration - Under the agreement, Innovent will receive a commercialization service fee based on net sales, while ASK Pharm will handle production and supply, along with receiving milestone payments [2][4]. - Both companies aim to leverage their strengths to enhance the accessibility and effectiveness of lung cancer treatments in China [4][11].