Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 53.2 million, a decrease of 12.5% from RMB 60.8 million for the same period in 2024[8]. - Loss for the period decreased significantly by 54.5% to RMB 76.4 million from RMB 167.0 million in the previous year[10]. - Adjusted loss for the period was RMB 72.9 million, a reduction of 52.2% from RMB 152.6 million in the same period last year[11]. - Total comprehensive loss for the period was RMB 87,994,000, compared to RMB 168,242,000 in 2024, marking a 47.8% decrease[123]. - The company reported a loss attributable to ordinary shareholders of RMB 76,378,000 for the six months ended June 30, 2025, a significant improvement from a loss of RMB 167,033,000 in the same period of 2024[157]. Income and Expenses - Other income and gains increased to RMB 38.1 million, up 39.5% from RMB 27.3 million in the prior year[9]. - R&D expenses decreased by 38.9% to RMB 79.9 million from RMB 130.8 million in the previous year[10]. - Sales and distribution expenses reduced by 33.9% to RMB 37.0 million compared to RMB 56.0 million in the same period last year[10]. - Administrative expenses fell by 32.8% to RMB 39.3 million from RMB 58.5 million in the prior year[10]. - The cost of goods sold for the six months ended June 30, 2025, was RMB 10,274 thousand, an increase from RMB 8,856 thousand in 2024, reflecting a rise of approximately 16%[143]. Product Development and Pipeline - The company’s product pipeline and business operations achieved significant progress during the reporting period[12]. - The commercialized asset includes ATG-022, a Claudin 18.2 antibody-drug conjugate, which is in clinical development[13]. - ATG-031 is currently undergoing a Phase I trial in the U.S. for advanced solid tumors[16]. - The company is developing multiple bispecific antibodies targeting various cancers, including ATG-201 for B-cell related autoimmune diseases and ATG-106 for ovarian and kidney cancers[27]. - The company has ongoing global clinical trials in collaboration with partners for its pipeline products[27]. Regulatory Approvals and Market Expansion - XPOVIO® (Selinexor) has been approved for inclusion in Taiwan's National Health Insurance as of March 1, 2025, for adult patients with relapsed/refractory multiple myeloma (rrMM) who have received at least two prior lines of therapy[14]. - The company has received NDA approvals for XPOVIO® in multiple regions including mainland China, Taiwan, Hong Kong, Macau, South Korea, Singapore, Malaysia, Thailand, Indonesia, and Australia[25]. - The company is focused on expanding its market presence in the Asia-Pacific region with its pipeline products[27]. - The company entered a commercialization agreement with Hansoh Pharmaceutical for the drug Xivivo® (Selinexor) in mainland China, with a potential upfront payment of up to RMB 200 million[33]. Corporate Governance and Leadership - The board of directors has committed to maintaining high standards of corporate governance to protect shareholder interests[89]. - The roles of the chairman and CEO are currently held by the same individual, Dr. Mei Jianming, which the board believes facilitates effective execution of strategic initiatives[89]. - The company has a strong leadership team, including CFO Long Zhen Guo, who has over 20 years of experience in investment banking and asset management[77]. - The management team is committed to strategic planning and market expansion to drive future growth[85]. - The company aims to leverage its experienced board and management team to navigate market challenges and capitalize on growth opportunities[85]. Shareholder Information and Equity Incentives - As of June 30, 2025, Dr. Jay Mei holds a total of 184,267,994 shares, representing approximately 27.12% of the company's equity[98]. - The total number of shares held by major shareholders includes 175,927,994 shares owned by JAY MEI 2025 GRAT, accounting for 25.89% of the equity[101]. - The company has various stock options and restricted share units granted to executives, which may influence future shareholdings[98]. - The company has granted a total of 42,814,766 stock options, with 2,048,000 options being canceled or expired during the reporting period[107]. - The company aims to retain and attract talent through the Restricted Share Unit Plan, which vests over a four-year period[170].

Core Viewpoint - The announcement of a 100% tariff on all branded/patented drugs by Trump starting in October is expected to have limited impact on China's innovative drug industry chain, with no excessive concerns warranted [1] Group 1: Impact on Innovative Drugs - Most Chinese innovative drugs that are currently being exported have either established production capacity in the U.S. or have outsourced production to local CMO companies [1] - The majority of domestic innovative drugs are exported using a business development (BD) model, which mitigates the impact of the tariff [1] Group 2: Impact on CXO Sector - The export products in the CXO sector primarily consist of raw materials and biological raw liquids, which are not affected by the new tariff; the proportion of finished dosage forms exported is low [1] - The investment timeline for multinational corporations (MNCs) to build factories in China will take time, leading to limited direct impact on CXO orders in the short term [1] - Long-term policy changes may influence the pace of factory construction by MNCs [1] Group 3: Upcoming Catalysts - The ESMO conference will take place in mid to late October, with a focus on companies like CanSino Biologics (09926), Kelun-Biotech (06990), and Rongchang Biologics (09995) that are expected to release significant data [1] - The results of medical insurance negotiations and the first version of the commercial insurance innovative drug directory are expected to be announced in October-November [1] Group 4: Mid to Long-term Recommendations - Recommended stocks in the innovative drug sector include 3SBio (01530) and Eucure Biopharma-B (06996), which have rich short-term catalysts and their valuations do not yet reflect the core value of major products [2] - Companies like Ascletis Pharma (02096), Hutchison China MediTech (00013), and Legend Biotech are considered undervalued with clear long-term growth logic [2] - In the CXO sector, WuXi AppTec (02268) is highlighted as a leading player benefiting from high downstream demand and improving financing conditions [2]

Group 1 - The core viewpoint is that the new 100% tariff on all branded/patented drugs announced by Trump will have limited impact on China's innovative drug industry chain, and there is no need for excessive concern [1] - For innovative drugs, most products currently being exported are either produced in the U.S. or outsourced to U.S. CMO, and most domestic innovative drugs are exported using the BD model [1] - For CXO, the main export products are raw materials and herbal extracts, which are not affected by the new tariff; the proportion of finished drug exports is low, and the investment timeline for MNC clients to build factories will take time, leading to limited short-term impact on CXO orders [1] Group 2 - Mid to long-term recommendations include innovative drugs such as 3SBio (01530) and Eucure Biopharma-B (06996), which have rich short-term catalysts and their valuations do not yet reflect the core value of major products [2] - Other recommended companies include Ascletis Pharma (02096), Hutchison China MediTech (00013), and Legend Biotech, which are considered significantly undervalued with clear long-term growth logic [2] - For CXO, companies like WuXi AppTec (02268) are expected to benefit from high downstream demand and improving financing conditions [2]

Core Viewpoint - The Hang Seng Healthcare Index fell by 1.4% this week, underperforming the market, with internet medicine, CXO, and traditional Chinese medicine sectors showing better performance [1] Group 1: Market Trends - Since September, the proportion of domestic holdings through the Hong Kong Stock Connect has remained stable, while foreign holdings have slightly decreased since mid-year [1] - Both domestic and foreign investors continue to increase their positions in innovative pharmaceutical companies, indicating a consistent long-term strategy [1] Group 2: Investment Recommendations - The report suggests focusing on companies with significant data releases at the upcoming ESMO conference in mid to late October, specifically mentioning Kangfang Biotech (09926), Kelun-Biotech (06990), and Rongchang Biotech (09995) [1] - The importance of timing and stock selection has increased following a broad rise in the innovative drug sector, with recommendations to gradually build positions during market corrections [1] Group 3: Sector Focus - For the innovative drug sector, the report highlights companies such as 3SBio (01530) and Eucure Biopharma-B (06996) as having rich short-term catalysts and undervalued core products, while companies like Ascletis Pharma (02096), Hutchison China MediTech (00013), and Legend Biotech are noted as significantly undervalued with clear long-term growth logic [1] - In the CXO sector, the report points to leading companies benefiting from high downstream demand and marginal recovery in financing, specifically mentioning WuXi AppTec (02268) [1]

Core Viewpoint - The Hang Seng Healthcare Index declined by 1.4% this week, underperforming the market, with internet medicine, CXO, and traditional Chinese medicine sectors showing better performance [1] Group 1: Market Trends - Since September, the proportion of domestic holdings through the Hong Kong Stock Connect has remained stable, while foreign holdings have slightly decreased since mid-year [1] - Both domestic and foreign investors continue to increase their positions in innovative pharmaceutical companies, indicating a consistent long-term strategy [1] Group 2: Investment Opportunities - Domestic investors are focusing on rebound opportunities, while foreign investors are increasing positions in innovative drug targets with high long-term potential and current cost-effectiveness [1] - The innovative drug guarantee model is gradually taking shape, which is expected to alleviate challenges such as hospital access and reimbursement difficulties for companies [1] Group 3: Upcoming Events - The ESMO conference will be held in mid to late October, and the report suggests focusing on companies like CanSino Biologics (09926), Kelun-Biotech (06990), and Rongchang Biologics (09995) that are expected to release significant data [1] Group 4: Stock Recommendations - The importance of timing and stock selection has increased after a broad rise in the innovative drug sector, with recommendations to gradually build positions during sector pullbacks [1] - Specific recommendations include: 1. Innovative drugs: 3SBio (01530), Eucure Biopharma-B (06996) with rich short-term catalysts and undervalued long-term growth logic [1] 2. CXO: Leaders in high-demand segments benefiting from improved financing conditions, such as WuXi AppTec (02268) [1]

Core Viewpoint - The innovative drug sector in Hong Kong has become a market focus again, with significant stock price increases following a prolonged period of adjustment and low valuations [2][3]. Group 1: Market Performance - Beihai Kangcheng-B (01228.HK) has surged nearly 19 times, while other companies like Deqi Pharmaceutical-B (06996.HK) and Hengrui Medicine (01276.HK) have also shown impressive gains, with some stocks increasing over four times [2]. - The overall profitability of the Hong Kong innovative drug sector has significantly improved in 2025, with many companies reporting substantial increases in net profit [6][7]. Group 2: Policy Support - The Chinese government has included "innovative drugs" in key emerging industries, with policies introduced to support the development of innovative drugs, including price management and financing [3]. - In June 2025, the National Healthcare Security Administration and the National Health Commission launched measures to support the high-quality development of innovative drugs, providing robust policy backing [3]. Group 3: Company Performance - Hengrui Medicine reported a 29.67% increase in net profit to 4.45 billion RMB in the first half of the year, achieving record highs in revenue and profit [4]. - Baijie Shenzhou's net profit increased by 115.63% to 450 million RMB, marking its first half-year profit, primarily due to the strong performance of its core product [5]. Group 4: Financing Trends - Many innovative drug companies are launching placement financing plans to raise funds for ongoing research and daily operations, driven by improved stock prices [8][10]. - As of 2025, nearly 60 companies in the Hong Kong medical and biopharmaceutical sectors have announced placement financing plans, with innovative drug companies being the main contributors [8]. Group 5: Future Outlook - The innovative drug sector is expected to continue its rapid development, supported by favorable external conditions and ongoing policy support [12][14]. - The recent interest rate cuts by the Federal Reserve may facilitate easier financing for innovative drug companies, which is crucial for those yet to achieve commercialization [13].

Core Viewpoint - The Trump administration is drafting an executive order that will impose three major restrictions on commercial transactions involving Chinese innovative drug patents or rights, focusing on national security reviews by the Committee on Foreign Investment in the United States (CFIUS) [1][2]. Summary by Sections Executive Order Details - The draft includes three main provisions: 1. Inclusion of Chinese innovative drug BD transactions in the CFIUS mandatory review list, ending the previous "low-risk automatic exemption" practice [2]. 2. FDA will implement "racial sensitivity supplementary reviews" for drugs relying on Chinese clinical data, requiring at least 20% comparative data from non-Asian populations [2]. 3. Establishment of a "key drug domestic production fund" to provide production subsidies for 15 categories of drugs, including antibiotics and acetaminophen, while implementing a "domestic priority" principle in federal procurement [2]. Market Reaction - The market reacted swiftly to the policy risks, with the Hong Kong innovative drug index (HK1105) dropping 3.82% on September 11, 2025, and the A-share innovative drug sector (BK1106) declining 2.17%, with over 80% of stocks in the sector experiencing pullbacks [3]. - The following day, the indices showed signs of recovery, indicating investors' responses to policy uncertainties and rational corrections [3]. Globalization Trends - Despite the geopolitical risks, the trend of Chinese innovative drugs going global remains intact, with total license-out transactions to Europe and the U.S. reaching $9.43 billion as of September 2025 [3]. - Major transactions include a $950 million licensing deal between BeiGene and Royalty Pharma, and a $6 billion global licensing agreement between 3SBio and Pfizer, highlighting a shift towards milestone payments and regional licensing [3]. Industry Challenges - The domestic market faces challenges, with annual growth in medical insurance fund spending (approximately 12%) lagging behind the growth in innovative drug R&D investment (approximately 25%) [4]. - The average reduction in medical negotiations remains high at 54%, and commercial health insurance coverage for innovative drugs is below 15%, creating a supply-demand imbalance that necessitates going global [4]. Risk Resilience Assessment - Goldman Sachs has categorized Chinese innovative drug companies into three risk resilience tiers based on their sensitivity to policy changes and operational capabilities [4][5]. - Companies with mature global layouts exhibit the strongest resilience, while those heavily reliant on domestic markets show the weakest resilience [5][10]. Strategic Defense Framework - A three-dimensional defense system is proposed to address risks associated with the executive order, focusing on transaction review, data compliance, and supply chain security [13]. - Strategies include conducting national security risk pre-assessments for transactions over $50 million and establishing partnerships with U.S. law firms to navigate regulatory challenges [14][15]. Conclusion - The construction of a quantifiable "risk resilience index" is essential for Chinese innovative drugs in the global 2.0 era, emphasizing the need for companies to embed policy hedging clauses in transaction structures and consider racial diversity data in clinical stages [23].

Core Viewpoint - 德琪医药-B (06996) announced a share buyback of 29,500 shares at a cost of HKD 197,700 on September 16, 2025 [1] Group 1 - The company is engaging in a share repurchase program, indicating confidence in its own stock value [1] - The total expenditure for the buyback is approximately HKD 197,700, which reflects the company's strategy to enhance shareholder value [1] - The number of shares being repurchased is 29,500, which may impact the stock's liquidity and market perception [1]

Group 1 - The company, Deqi Pharmaceutical (06996.HK), announced a share buyback on September 16, spending HKD 198,000 to repurchase 30,000 shares [1]

Core Viewpoint - 德琪医药-B (06996) announced a share buyback plan, indicating confidence in its stock value and future prospects [1] Group 1 - The company will spend HKD 197,700 to repurchase 29,500 shares [1]