Market Reaction - On September 11, the innovative drug concept stocks opened lower, with companies like BeiGene and Tigermed experiencing declines of over 10% [1] - WuXi AppTec fell over 7%, while other companies such as HengRui Medicine, Yuandong Bio, Huahai Pharmaceutical, and Sihuan Pharmaceutical saw declines exceeding 5% [1] - After half an hour of trading, BeiGene's decline narrowed to below 7%, but its latest market value evaporated by over 30 billion CNY compared to the previous trading day [1]

PresentationSean LaamanHead of Healthcare Research & Equity Analyst Okay. I think we're okay. Good afternoon, everyone, and welcome to Morgan Stanley Global Healthcare Conference. I'm Sean Laaman, Head of U.S. Mid-Cap Biotech Equity Research here at the firm. Before we begin, for important disclosures, please see Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you do have any questions on that, please reach out to your Morgan Stanley sales representative. For ...

Core Viewpoint - The innovative drug sector is expected to continue as a strong investment theme, with significant clinical data releases from Chinese innovative drugs anticipated in the upcoming months, coinciding with a peak season for licensing agreements with multinational pharmaceutical companies [1] Group 1: Market Performance - BeiGene (ONC.US) saw a 6% increase in stock price, reaching $338.19 [1] - The innovative drug sector is projected to maintain rapid revenue growth and a trend of reduced losses year-on-year, with some leading companies approaching breakeven points [1] Group 2: Upcoming Events - Major conferences such as the World Lung Cancer Conference, European Society for Medical Oncology, and American Society of Hematology are scheduled for the second half of the year, where key clinical data for Chinese innovative drugs will be presented [1] Group 3: International Collaboration - There is an increasing trend of active licensing transactions for Chinese innovative drugs, with both the number and value reaching new highs [1] - Global multinational pharmaceutical companies are expected to focus more on Chinese pipelines as many blockbuster drug patents will expire in the next two to three years, creating a demand for new research pipelines [1]

Core Viewpoint - The innovative drug sector is expected to continue its strong growth trajectory, with significant clinical data releases and potential licensing agreements on the horizon, particularly for Chinese companies [1] Group 1: Market Performance - BeiGene (ONC.US) saw a 6% increase in stock price, reaching $338.19 [1] - The innovative drug sector is highlighted as the strongest investment theme, with expectations for sustained performance [1] Group 2: Upcoming Events - Major conferences such as the World Lung Cancer Conference, European Society for Medical Oncology, and American Society of Hematology are set to showcase key clinical data for Chinese innovative drugs in the latter half of the year [1] - The end of the year is anticipated to bring a peak in licensing activities from multinational pharmaceutical companies, with several Chinese potential BICs in advanced negotiations [1] Group 3: Financial Outlook - The innovative drug sector is projected to maintain high revenue growth and a trend of reduced losses year-on-year, with some leading companies approaching breakeven points [1] - The overall industry is showing signs of improving profitability [1] Group 4: International Expansion - Chinese innovative drugs are gaining international recognition for their innovative capabilities, with a surge in outbound licensing transactions in terms of both quantity and value [1] - In the next two to three years, a significant number of blockbuster drug patents from global pharmaceutical companies will expire, creating a demand for new research pipelines [1] - Increased collaboration between multinational companies and Chinese firms is expected to enhance market valuation expectations for the innovative drug sector [1]

Market Overview - The global stock markets showed mixed performance, with the Hang Seng Index closing at 25,059, down 1.12% for the day but up 24.92% year-to-date [1] - The US markets, including the Dow Jones and S&P 500, experienced gains of 0.77% and 0.83% respectively, while the Nasdaq rose by 0.98% [1] - Chinese stock markets faced declines, particularly in hardware technology, with the Shenzhen Composite Index down 2.05% [1][3] Sector Performance - In the Hong Kong market, the Hang Seng Financial Index decreased by 0.42%, while the Hang Seng Industrial Index fell by 1.58% [2] - The hardware technology sector in China led the declines, while sectors such as retail and food saw gains [3] - The US market saw a rise in consumer discretionary, banking, and solar sectors, while utilities and AI-related stocks lagged [3] Company Analysis - Salesforce reported a 10% year-on-year revenue growth to $10.2 billion for Q2 FY26, with non-GAAP net profit increasing by 12% to $2.8 billion, aligning with Bloomberg consensus [4] - The company’s cRPO grew by 11% to $29.4 billion, driven by strong orders from small and medium-sized enterprises [4] - Salesforce's AI and data cloud business saw an impressive annual recurring revenue growth of approximately 120% [4] Investment Recommendations - The report maintains a "Buy" rating for several companies, including Geely Automobile, Li Auto, and Tencent, with target prices indicating significant upside potential [5] - Geely Automobile is rated "Buy" with a target price of 25.00 HKD, representing a 37% upside from its current price of 18.24 HKD [5] - Tencent is also rated "Buy" with a target price of 705.00 HKD, suggesting an 18% upside from its current price of 599.50 HKD [5]

Core Viewpoint - BeiGene (ONC.US) experienced a significant increase of over 9%, closing at $334.20, following the release of its financial report for the first half of 2025, which showed a total revenue of 17.518 billion yuan, a year-on-year growth of 46.03% [1] Financial Performance - The total revenue for the first half of 2025 reached 17.518 billion yuan, with product revenue accounting for 17.36 billion yuan, reflecting a year-on-year increase of 45.8% [1] - The company achieved a net profit of 450 million yuan, marking its first profitable quarter of the year [1] Product Performance - The growth in product revenue was driven by sales increases of self-developed products, namely Brukinsa (Zebutinib capsules) and Tislelizumab (anti-PD-1 monoclonal antibody), as well as increased sales from Amgen licensed products [1] - Brukinsa demonstrated outstanding performance, becoming the leading BTK inhibitor in both the U.S. and global markets [1] Sales Breakdown - Global sales of Brukinsa reached 12.527 billion yuan, representing a year-on-year growth of 56.2% [1] - In the U.S. market, sales of Brukinsa amounted to 8.958 billion yuan, with a year-on-year increase of 51.7% [1] - Brukinsa has rapidly gained adoption among patients and physicians in the U.S. due to its best-in-class clinical characteristics, making it the largest and fastest-growing product in the market [1]

Core Viewpoint - BeiGene (ONC.US) experienced a significant increase of over 9%, closing at $334.20, following the release of its financial report for the first half of 2025, which showed a total revenue of 17.518 billion yuan, a year-on-year growth of 46.03% [1] Financial Performance - The company reported total revenue of 17.518 billion yuan for the first half of 2025, marking a 46.03% increase year-on-year [1] - Product revenue reached 17.36 billion yuan, reflecting a year-on-year growth of 45.8% [1] - The net profit for the company was 450 million yuan, marking its first return to profitability this year [1] Product Performance - The growth in product revenue was driven by sales increases of self-developed products, namely Brukinsa (Zebutinib) and Tazverik (Tazemetostat), as well as increased sales from Amgen licensed products [1] - Zebutinib demonstrated outstanding performance, becoming the leading BTK inhibitor in both the U.S. and global markets [1] Sales Data - Global sales of Zebutinib reached 12.527 billion yuan, representing a year-on-year growth of 56.2% [1] - In the U.S. market, Zebutinib sales amounted to 8.958 billion yuan, with a year-on-year increase of 51.7% [1] - Zebutinib has rapidly gained adoption among patients and physicians in the U.S. due to its best-in-class clinical characteristics, making it the largest and fastest-growing product in the market [1]

Core Viewpoint - BeiGene (ONC.US) experienced a significant increase of over 9%, closing at $334.20, following the release of its financial report indicating a strong revenue growth and a return to profitability in the first half of 2025 [1] Financial Performance - In the first half of 2025, the company achieved total revenue of 17.518 billion yuan, representing a year-on-year growth of 46.03% [1] - Product revenue reached 17.36 billion yuan, with a year-on-year increase of 45.8% [1] - The company reported a net profit of 450 million yuan, marking its first return to profitability this year [1] Product Performance - The growth in product revenue was driven by sales increases of self-developed products, namely Brukinsa® (Zebutinib capsules) and Tislelizumab, as well as increased sales from Amgen licensed products [1] - Zebutinib demonstrated outstanding performance, becoming the leading BTK inhibitor in both the U.S. and global markets [1] Sales Data - Global sales of Zebutinib reached 12.527 billion yuan, reflecting a year-on-year growth of 56.2% [1] - In the U.S. market, sales of Zebutinib amounted to 8.958 billion yuan, with a year-on-year increase of 51.7% [1] - Zebutinib has rapidly gained adoption among patients and physicians in the U.S. due to its best-in-class clinical characteristics, making it the largest and fastest-growing product in the market [1]

BeOne Medicines Announces Second Quarter 2025 Financial Results and Business Updates SAN CARLOS, Calif. – August 6, 2025 – BeOne Medicines Ltd. (NASDAQ: ONC; HKEX: 06160; SSE: 688235), a global oncology company, today announced financial results and corporate updates from the second quarter of 2025. "Our strong second quarter performance reinforces our trajectory as a global oncology powerhouse and underscores our proven ability to deliver sustainable, long-term growth," said John V. Oyler, Co-Founder, Chai ...

Core Viewpoint - The recent BD transaction by BeiGene is perceived as weak in attractiveness for investors, as it does not create value but is akin to a debt financing operation [1][10]. Group 1: Transaction Details - BeiGene announced the sale of partial royalty rights for a cancer drug for up to $950 million, with an upfront payment of $885 million [2][3]. - The upfront payment represents 36% of BeiGene's revenue for the first half of the year [3]. - The drug involved, Talazoparib, is set to launch in the U.S. in May 2024 for small cell lung cancer treatment [5]. Group 2: Financial Implications - The transaction is expected to enhance BeiGene's balance sheet stability and provide a steady cash flow, which is a critical goal for the company [10]. - As of June 30, 2025, BeiGene had approximately $2.8 billion in cash, a decrease of $170 million year-over-year, with liabilities around $2.5 billion [11]. Group 3: Market Reaction and Comparisons - Following the announcement, BeiGene's stock price declined alongside the broader innovative drug sector, contrasting with other companies that saw stock price increases after similar transactions [3][9]. - The transaction structure is unique as it only involves the sale of royalty rights, differing from typical BD transactions that include upfront payments, milestone payments, and royalties over the drug's lifecycle [9]. Group 4: Future Outlook - Royalty Pharma, the buyer, anticipates a return on investment of 10%-15% from this transaction, with projected total sales of Talazoparib estimated at $19.6 billion from 2025 to 2035 [4][7]. - The deal is seen as a significant move for BeiGene, marking its first drug rights sale in four years, and it sets a precedent in the Chinese innovative drug industry [3][10].