Core Viewpoint - 康方生物科技 achieved significant milestones in 2024, including a 25% year-on-year increase in new drug sales revenue, reaching 2 billion yuan, and successfully including two core dual antibodies in the national medical insurance catalog, marking a strategic goal in domestic new drug commercialization [2][3] Commercialization Progress - The company’s dual antibodies, Cardunili (PD-1/CTLA-4) and Ivorosi (PD-1/VEGF), gained entry as star products in the national medical insurance negotiations, indicating a shift from an outpatient market focus to an inpatient market core [3][4] - To support market expansion post-insurance implementation, 康方生物 initiated a commercialization system upgrade, expanding its professional marketing team and enhancing hospital access and academic promotion capabilities [3][4] New Drug Development - 康方生物 received approvals for three new drugs and two new indications during the reporting period, with over 20 ongoing phase III clinical studies [2][5] - The international market expansion of Ivorosi is a focal point, with its international partner, Summit, advancing three international multi-center phase III clinical developments [5][6] Clinical Research and Global Strategy - The HARMONi study for Ivorosi is expected to release phase III data in mid-2025, which could lead to new drug application submissions in the US and Europe if results are positive [6] - The company is conducting a series of clinical therapy explorations covering over 40 indications, establishing a competitive barrier in the field of tumor immunotherapy [6][7] Company Achievements - 康方生物's founder and CEO highlighted the company's historical achievements in drug innovation and the approval of globally competitive products, enhancing its position in the international biopharmaceutical innovation landscape [7]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **pharmaceutical industry** and the **innovative drug sector** in China for the year 2025, highlighting various trends, opportunities, and challenges within the sector [2][4][26]. Core Insights and Arguments - **Policy Support for Innovative Drugs**: The Chinese government has approved a comprehensive plan to support innovative drug development, which includes price management, medical insurance payments, and diversified payment systems. This is expected to accelerate drug approval processes and enhance market opportunities for innovative drugs [2][3]. - **High Growth Potential**: The innovative drug sector is anticipated to maintain a high growth trajectory due to favorable policies and ongoing medical insurance negotiations. Companies like BeiGene and Hengrui Medicine are expected to benefit significantly from these developments [2][4]. - **AI in Healthcare**: The rapid development of AI in healthcare is highlighted, with companies that possess high-quality data expected to lead in AI applications for diagnostics and health management [2][5]. - **Medical Device Sector Recovery**: The medical device sector is showing signs of marginal recovery, particularly in the ophthalmology segment, driven by favorable fertility policies and increased demand for refractive surgeries [2][6]. - **Global Competitiveness of Chinese Firms**: Chinese innovative drug companies are increasingly demonstrating global competitiveness, with a significant share of global upfront payments and R&D milestones [2][8]. - **Transformation of Traditional Pharmaceutical Companies**: Traditional pharmaceutical companies are accelerating their transformation, with a focus on differentiated innovative products. Companies like East China Pharmaceutical and China National Pharmaceutical Group are noted for their promising prospects [2][9]. - **CXO Sector Recovery**: The CXO sector is gradually recovering, with leading companies like WuXi AppTec showing strong fundamentals and rapid order growth [2][27]. - **Technological Innovation in Medical Devices**: The medical device sector is characterized by strong technological innovation, with companies like United Imaging Healthcare expected to achieve significant growth in 2025 [2][38]. Notable Companies and Investment Opportunities - **Recommended Companies**: Key companies to watch include BeiGene, Hengrui Medicine, and Innovent Biologics in the innovative drug space, and United Imaging Healthcare in the medical device sector. These companies are recognized for their differentiated competitive advantages and potential for international expansion [2][7][12]. - **BeiGene's Profitability**: BeiGene is projected to achieve profitability in 2025, with its leading product, Zanubrutinib, expected to continue strong sales growth in the U.S. market [10][11]. - **Hengrui Medicine's Internationalization**: Hengrui is making significant strides in international markets, with a robust pipeline and expected high growth rates [12][15]. - **Innovent Biologics' Breakthroughs**: Innovent is noted for its advancements in tumor immunotherapy, with promising data expected from its overseas trials [16][19]. - **East China Pharmaceutical's Growth**: East China Pharmaceutical is positioned for growth with a diverse pipeline and strong market presence [24][25]. Additional Important Insights - **Market Trends**: The overall pharmaceutical market is expected to see a recovery in 2025, with innovative drugs leading the way due to supportive policies and market dynamics [4][26]. - **Investment Sentiment**: There is a positive sentiment towards the pharmaceutical sector, with expectations of continued growth driven by innovation and policy support [2][26]. - **Challenges and Risks**: While the outlook is positive, potential risks include regulatory changes and market competition, which could impact the performance of certain companies [2][3][4]. This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the pharmaceutical industry's current landscape and future prospects.

中信证券 创新药和集采政策趋势 20250330 摘要 Q&A 当前医药板块在政策方面有哪些重要变化？ 近期，医药板块在政策方面出现了显著变化，尤其是集采政策的优化和商保的 快速落地。首先，关于集采政策，上周业内流传的相关内容显示，第十批集采 相关舆情之后，医保监管部门进行了相应调整。在两会期间，总理报告中提到 要"优化集采"和"完善药品价格形成机制"，这表明未来将更多体现市场化 竞争机制。这一变化缓解了过去对行业估值压制的担忧。 具体而言，此次调整 可能使得更多差异化和品牌类型产品能够进入市场，从而重新评估市场模型。 • 集采政策优化及医保支付标准调整：两会期间强调"优化集采"和"完善 药品价格形成机制"，预示着市场化竞争机制的回归，缓解了行业估值压 制，利好差异化和品牌类型产品，降低非医保支付品类的价格干预风险。 • 多元化支付体系加速构建：商业健康险目录的推出，特别是城市定制型商 业医疗保险如上海"全药保"，覆盖更多创新药和进口原料药，为临床刚 需创新药提供新的支付契机，预计商业保险市场规模将超万亿。 • 创新药企迎来发展机遇：恒瑞医药、百济神州、信达生物等企业预计实现 首次或持续盈利，并可能推出重磅产 ...

今日港股回调，创新药再度逆市上涨！港股通创新药ETF（159570）强势大涨近3%，成交额继续爆量，盘中成交近5亿元！上周五成交额再度刷新历史，天 量成交16.49亿元！资金持续乐观，上周累计获资金净流入近2亿元，今日盘中再获净申购4300万份！ 港股通创新药ETF（159570）成分股多数飘红：乐普生物涨超12%，百济神州涨超5%，信达生物涨超3%，晶泰控股涨超2%，康方生物、药明生物、科伦博 泰生物涨超1%。 资金狂涌创新药，港股通创新药ETF（159570）近60日"吸金"近10亿元，融资余额保持历史高位，反映杠杆资金布局意愿！最新规模19.27亿元创上市新 高，1个月实现规模翻倍！ 【机构：医药见底回暖，创新药主线强化】 光大证券认为，医药行情见底回暖，优化集采政策有望稳定资产盈利能力。近期，医药行情整体已显现见底回暖迹象，从2025.1.2~2025.3.27期间，港股创 新药指数上涨26.28%，跑赢恒生科技1.20pp。2025年工作报告提出"优化药品集采政策"，有望优化产业竞争环境，仿制药利润压缩接近尾声，竞争格局趋于 稳定，龙头白马企业凭借技术壁垒与产能优势，盈利能力有望企稳。后集采时代，行 ...

Core Insights - 康方生物 reported an annual revenue of 2.124 billion RMB for the year ending December 31, 2024, with commercial sales revenue of 2.044 billion RMB, reflecting a year-on-year increase of 25.34% [1] - The company has over 50 innovative projects in development, including 61 self-developed products approved for market and 2 products under NMPA review, with 12 products in Phase III clinical trials and 12 in Phase I/II trials [1] - The company aims to become a leading global biopharmaceutical enterprise through efficient and innovative R&D, production, and commercialization platforms [1] Revenue and Sales Performance - The increase in commercial sales revenue is primarily attributed to the sustained growth in sales of 开坦尼 (卡度尼利, PD-1/CTLA-4) and the positive sales contribution from 依达方 (依沃西, PD-1/VEGF) after its approval in May 2024 [1] - The two products generated significant market demand due to their excellent clinical data and innovative clinical value [1] - The company also received approximately 122 million RMB in commercial licensing income from various product partners, mainly from upfront payments by SUMMIT [1] Production Capacity and Compliance - The company currently has a production capacity of 94,000 liters, ensuring large-scale supply and a stable expansion plan to meet future clinical and commercialization needs [2] - The group's GMP-compliant production facilities are designed and validated according to regulations from the FDA, EMA, and NMPA, supporting the entire drug development process from discovery to commercial production [2]

Financial Performance - For the fiscal year ending December 31, 2024, the total revenue of the company was RMB 2,123.9 million, a decrease of 53.08% compared to RMB 4,526.3 million for the fiscal year ending December 31, 2023[4]. - The company recorded a loss of RMB 501.1 million for the fiscal year ending December 31, 2024, compared to a profit of RMB 1,942.4 million for the fiscal year ending December 31, 2023[6]. - The gross profit for the fiscal year ending December 31, 2024, was RMB 1,834.9 million, down 58.23% from RMB 4,393.0 million in the previous year[5]. - The commercial licensing income for the year ending December 31, 2024, was RMB 121.6 million, a significant decrease from RMB 2,922.8 million for the year ending December 31, 2023[65]. - The total employee compensation cost for the year ending December 31, 2024, was RMB 944.7 million, an increase from RMB 847.1 million for the year ending December 31, 2023, attributed to an increase in employee numbers[85]. - The company reported a net loss of RMB 501,093 thousand for the year ending December 31, 2024, compared to a profit of RMB 1,942,351 thousand in the previous year[103]. Research and Development - The company has over 50 innovative projects under research, with 61 self-developed products approved for market and 12 products undergoing Phase III clinical trials[8]. - Research and development expenses for the year ending December 31, 2024, were RMB 1,187.7 million, a 5.29% decrease from RMB 1,254.0 million for the year ending December 31, 2023, as the company strengthened its clinical team and reduced reliance on external clinical service providers[69]. - The company achieved key milestones in its R&D pipeline, with the global launch of the first-in-class bispecific antibody Iwoshib (PD–1/VEGF) approved in May 2024, and multiple new lines receiving IND approval, including AK135 (IL–1RAP biologic) and AK138D1 (HER3 ADC)[70]. - The company is focusing on tumor immunotherapy, with several products in clinical trials, including approved drugs like Ketanil® and Yidafang®[48]. Product Development and Clinical Trials - Cardunili's sNDA for first-line treatment of cervical cancer is in the final review stage at NMPA, with III phase clinical trial results presented at the 2024 IGCS global conference[14]. - Yidafang® (Ivosidenib, PD-1/VEGF) has been deployed in 18 indications with over 27 clinical trials, including 12 III phase trials covering various cancers[18]. - The Phase III clinical trial for the combination therapy of Ivoris in treating pancreatic cancer is underway, demonstrating superior efficacy and safety, establishing its potential as a cornerstone in tumor immunotherapy[25]. - The III phase clinical trial results for Yidafang® were published at the 2024 ASCO conference and included in major treatment guidelines[21]. - The company has successfully developed Tetrabody technology to overcome challenges in the development and production of bispecific antibodies[7]. Market Strategy and Commercialization - The company expects to become a leading global biopharmaceutical enterprise through efficient and innovative research, development, and commercialization platforms[8]. - The commercial system has undergone a comprehensive upgrade, focusing on a "patient-centric" approach to achieve rapid market entry and growth[58]. - The company aims to leverage its foundational drugs Ketanil® and Yidafang® to cover a broader market space through extensive combination therapies[48]. - The company anticipates significant market demand for its products due to excellent clinical data and innovative clinical value[9]. Financial Position and Assets - As of December 31, 2024, the group's current assets amounted to RMB 8,691.6 million, with cash and cash equivalents, time deposits, and financial products totaling RMB 7,343.9 million, an increase of RMB 2,449.4 million from RMB 4,894.4 million as of December 31, 2023[76]. - The group's current liabilities as of December 31, 2024, were RMB 1,686.6 million, including trade payables of RMB 425.2 million and other payables of RMB 715.1 million[77]. - The total assets minus current liabilities amounted to RMB 11,068,335,000 in 2024, up from RMB 7,976,508,000 in 2023, indicating an increase of approximately 38.5%[105]. - The company reported cash and cash equivalents of RMB 6,918,065,000 in 2024, compared to RMB 4,041,986,000 in 2023, reflecting a growth of about 71.2%[105]. Corporate Governance and Compliance - The company has complied with all applicable corporate governance codes during the reporting period, except for C.2.1[90]. - The audit committee has been established to assist the board in providing independent opinions on financial reporting processes and internal controls[98]. - The company plans to continue reviewing and monitoring its corporate governance practices[92]. - The chairman and CEO roles are currently held by the same individual, which the board believes provides strong and consistent leadership[91].

Group 1 - The Hang Seng Healthcare Index (HSHCI) has seen a strong increase of 1.80%, with notable gains from companies such as Lepu Biopharma-B (up 16.56%) and Zai Lab (up 10.27%) [1] - The Hang Seng Medical ETF (513060) has risen by 2.11%, marking its third consecutive increase, with a trading volume of 4.69 billion yuan [1][2] - The second Boao Lecheng Stem Cell Conference has opened, marking a new phase of standardized and high-quality development in China's stem cell industry [2] Group 2 - Financial analysts predict that the approval and implementation of more projects in the stem cell sector will lead to advanced treatment methods benefiting the public [2] - The domestic medical innovation industry is expected to experience multiple growth opportunities, particularly for companies with true innovation capabilities in new drug development [2] - The Hang Seng Medical ETF has seen a significant growth in scale, increasing by 34.09 billion yuan over the past year, ranking in the top third among comparable funds [2] Group 3 - Since its inception, the Hang Seng Medical ETF has achieved a maximum monthly return of 28.34% and an average monthly return of 7.00% [3] - The ETF has outperformed its benchmark with an annualized excess return of 2.02% over the past year [3] - The ETF's management fee is 0.50%, and the custody fee is 0.15% [3] Group 4 - The tracking error of the Hang Seng Medical ETF is 0.033%, the highest tracking precision among comparable funds [4] - The latest price-to-earnings ratio (PE-TTM) of the Hang Seng Medical Healthcare Index is 24.97, indicating it is at a historical low compared to the past year [4] - The top ten weighted stocks in the Hang Seng Medical Healthcare Index account for 55.64% of the index, with companies like WuXi Biologics and BeiGene among the leaders [4][6]

Investment Rating - The report maintains an "Accumulate" rating for the pharmaceutical industry [7] Core Insights - The report emphasizes the leadership of Chinese companies in the PD-(L)1 bispecific antibody sector, highlighting it as a representative technology platform for new drug development in China [21][13] - The overall performance of the pharmaceutical sector has shown a 1.77% increase, outperforming both the ChiNext Index and the CSI 300 Index during the week of March 10-14 [13][14] Summary by Sections Recent Performance - The market experienced an upward trend with a notable surge on Friday, reflecting a shift from technology to non-technology sectors, particularly in consumer healthcare and policies related to the three-child policy [2][14] - The report notes that while innovative drugs and AI healthcare showed signs of correction, other themes such as consumer healthcare and small-cap innovations in Hong Kong gained traction [2][14] Future Outlook - In the short to medium term, the focus is on identifying opportunities in consumer healthcare, particularly those with attributes appealing to children and those positioned for consumption upgrades [15] - For 2025, the report anticipates improvements in the pharmaceutical payment sector due to supportive policies for commercial health insurance, indicating a gradual accumulation of positive changes [15] Strategic Allocation Thoughts - The report outlines two main strategies for investment: 1. **Pharmaceutical Style Rhythm**: Focus on consumer healthcare companies like Angelalign and Aier Eye Hospital, and innovative drug companies such as Innovent Biologics and BeiGene [16] 2. **Pharmaceutical Industry Logic**: Emphasizes the commercialization of innovative drugs and the integration of new technologies, with a focus on companies like CStone Pharmaceuticals and Zymeworks [17][19] Key Companies to Watch - The report suggests monitoring companies involved in PD-(L)1 bispecific antibodies, including CanSino Biologics, Innovent Biologics, and I-Mab Biopharma, as they are positioned at the forefront of clinical advancements [21][34]

Investment Rating - The report maintains a "Buy" rating for 康方生物 (9926 HK) with a target price of 87 HKD, indicating a potential upside of 26.7% from the current price of 68.65 HKD [4][5]. Core Insights - 康方生物 has entered a clinical trial collaboration with Pfizer to explore the potential of combining its PD-1/VEGF dual antibody, 依沃西, with multiple vedotin ADCs from Pfizer for treating various solid tumors. The clinical trials are expected to start in mid-2025, primarily focusing on Phase Ib/II studies [1][3]. - The collaboration is significant as Pfizer has a robust pipeline of vedotin ADCs, which have shown promising preliminary clinical results when combined with PD-1 targeted therapies, suggesting a synergistic anti-tumor effect [2][3]. - 康方生物 is also advancing its clinical trials in multiple indications, including biliary cancer, head and neck squamous cell carcinoma, pancreatic cancer, and triple-negative breast cancer, with several key catalysts expected in 2025 [3]. Summary by Sections - **Clinical Collaboration**: 康方生物's partnership with Pfizer aims to leverage the strengths of both companies in developing innovative cancer therapies, with a focus on the efficacy of 依沃西 in combination with vedotin ADCs [1][3]. - **Pipeline and Milestones**: Key milestones for 康方生物 in 2025 include the readout of the HARMONi trial for EGFR TKI-treated NSCLC, the initiation of the ADC combination trials, and ongoing patient enrollment in important Phase III studies [3]. - **Market Position**: 康方生物 is positioned as a key player in the oncology sector, with a strong emphasis on expanding its clinical development efforts and maintaining a competitive edge in the market [3].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 87.00, indicating a potential upside of 45.9% from the current price of HKD 59.65 [1][6][12]. Core Insights - The company has recently submitted its third non-oncology product for market approval and has initiated multiple Phase III trials for its product, Ivoris, in various indications beyond lung cancer, reaffirming the "Buy" rating [2][6]. - The financial forecasts have been adjusted, reflecting a more cautious short-term sales outlook, but the long-term peak sales estimates for key products have been maintained or increased [6][7]. Financial Overview - Revenue projections for 2024, 2025, and 2026 are revised to RMB 2,411 million, RMB 4,096 million, and RMB 5,861 million respectively, with significant growth expected in the following years [5][14]. - The net profit is expected to improve from a loss of RMB 509 million in 2024 to a profit of RMB 595 million in 2025, and further to RMB 1,707 million in 2026 [5][14]. - The company’s market capitalization is approximately HKD 53.42 billion, with a 52-week high of HKD 77.55 and a low of HKD 31.80 [4][6]. Product Development - The company has successfully submitted its eighth innovative drug application, targeting moderate to severe plaque psoriasis, enhancing its product portfolio in the autoimmune field [6][7]. - The ongoing Phase III studies for Ivoris in various cancers are expected to expand its market opportunities significantly, particularly in indications with limited current treatment options [6][7]. Valuation Model - The DCF valuation model estimates the equity value at approximately RMB 70,990 million, translating to a per-share value of HKD 87.00 [8].