The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. Application Proof of Alebund Pharmaceuticals (Jiangsu) Limited 禮邦醫藥(江蘇)股份有限公司 (the "Company") (A joint stock company incorporated in the ...

Core Insights - The MedTech industry is experiencing a decline in M&A deals and venture financing rounds, highlighting a need for investment in early-stage companies [1][2] M&A and Financing Trends - There is a notable downward trend in the number of M&A, partnerships, and venture financing deals in the MedTech sector since 2015 [2] - Despite the decrease in deal volume, the average size of M&A deals has increased, with major companies favoring acquisitions of advanced, later-stage firms [4] - The median M&A deal size for top MedTech companies rose to $895 million from 2021 to 2025, over four times higher than the median from 2016 to 2020 [5] Investment Focus - Companies that secure multiple investments are typically in growth phases, indicating strong interest in funding scalable businesses [6] - MedTech firms are strategically focusing investments on areas with significant innovation and growth potential [8] Divestment Strategies - Larger MedTech companies are divesting or spinning off non-core divisions to streamline portfolios and concentrate on higher-growth markets [8][9] - Recent examples include Medtronic's spin-off of its Diabetes business, Becton Dickinson's separation of its Biosciences and Diagnostics division, and Johnson & Johnson's divestment of its orthopedic business [9]

Core Insights - The event is titled "Pharma Day 2025" and is being held in London with a record attendance both in-person and online [1] Session Overview - The agenda includes two sessions: a 2-hour morning session focused on strategy and a 2-hour, 10-minute afternoon session centered on the evolving pipelines across five therapeutic areas [2] - Each session will conclude with a 30-minute Q&A segment, allowing participants to engage and ask questions both in the room and via the web [2]

Core Insights - Shanghai Henlius Biotech is negotiating with major pharmaceutical companies, including Johnson & Johnson and Roche Holding AG, for the rights to an experimental cancer drug [1] Company Developments - The potential agreement with pharmaceutical giants indicates a strategic move for Shanghai Henlius Biotech to expand its market presence and leverage partnerships with established companies in the industry [1]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Life Sciences and Healthcare sector, particularly in developed markets, with a notable emphasis on the impact of US tariffs and the Most Favored Nation (MFN) policy on investor sentiment and positioning in the healthcare sector [2][10]. Core Insights and Arguments 1. **Investor Sentiment**: The healthcare sector is currently viewed negatively, with investors adopting a bearish stance due to uncertainties surrounding MFN and tariffs. There is anticipation for clarity on these issues, which may influence investment decisions in the sector [2][10]. 2. **GLP Therapeutics**: Recent disappointing data on oral GLP therapies has led to diminished growth expectations in obesity treatments. Concerns about pricing and access are prevalent, suggesting a potential shift in investor focus away from GLP players to other therapeutic areas [3][10]. 3. **Life Sciences Tools vs. PBMs**: The traditional investment strategy of focusing on payers and Pharmacy Benefit Managers (PBMs) is being questioned. Increased scrutiny on medical loss ratios and drug pricing may hinder earnings growth in this area. In contrast, the Life Sciences tools sector is showing signs of recovery, with positive book-to-bill ratios indicating potential for growth [4][5][10]. 4. **Oncology and Immunology Investments**: There is a cautious interest in oncology and immunology stocks, with some companies trading at reasonable multiples. Growth-at-a-reasonable-price (GARP) strategies may attract more investor attention, particularly for companies like AstraZeneca and Sanofi [6][10]. 5. **Company-Specific Updates**: - **Eli Lilly**: The company reported Q2 results that exceeded expectations, but concerns remain regarding competition in the obesity treatment market. The market share debate is heavily tilted in favor of Eli Lilly compared to competitors [19][20]. - **Gilead**: Strong performance in the HIV segment, with a 5% revenue beat, has led to an optimistic outlook for the year. The focus will be on the launch of new products and their market acceptance [19][20]. - **Merck KGaA**: Despite a slight miss in Q2 results, the company maintains a positive outlook for Life Sciences growth, indicating a return to structural growth despite challenges in the electronics segment [19][20]. - **Novo Nordisk**: The company faces scrutiny over its growth strategy and market execution, particularly in the GLP market, where expectations may be overly optimistic [19][20]. Additional Important Insights - **Market Dynamics**: The healthcare sector is experiencing a shift in focus from GLP therapies to Life Sciences tools and oncology/immunology investments, reflecting changing investor priorities and market conditions [3][4][5][10]. - **Regulatory Environment**: The evolving regulatory landscape, particularly concerning drug pricing and market access, is a critical factor influencing investor sentiment and company performance in the healthcare sector [4][10]. - **Future Outlook**: The potential for recovery in the Life Sciences tools sector and the ongoing developments in oncology and immunology present opportunities for selective investment, although caution is advised due to market volatility and regulatory challenges [5][6][10].

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **China Healthcare** sector, particularly the **innovative drug out-licensing** activities in China compared to global trends [1][4][8]. Performance Metrics - The **Hang Seng Healthcare Index** has increased by over **75% YTD**, significantly outperforming the broader **Hang Seng Index**, which rose by approximately **23%** [1]. - China's out-licensing deals accounted for about **15%** of total global deals and **21%** of multinational corporation (MNC) deals in the last two years [4][11]. Strategic Insights - The analysis indicates that foreign companies are not solely attracted to China for low-cost benefits; they are increasingly interested in the **quality of assets**. Upfront payments for Chinese deals are often comparable to or exceed global averages, with **US$213 million** for oncology compared to **US$195 million** globally [4][11]. - **Oncology** remains the primary focus for MNCs in both global and China-specific agreements, followed closely by **cardiometabolism** [4][11]. Licensing Potential - There is significant potential for out-licensing in areas beyond oncology, particularly in **autoimmune diseases** and **cardiometabolism**. The report suggests that investments in **CNS (central nervous system)** could lead to more out-licensing deals from China [4][5][24]. - Advanced drug modalities such as **ADCs (antibody-drug conjugates)** and **bsAb (bispecific antibodies)** are becoming prominent in out-licensing from China [5][24]. Company-Specific Insights - **Innovent** has been highlighted as a top pick in the biotech sector due to its strong out-licensing potential and asset quality. The price target for Innovent has been increased based on favorable licensing income projections [1][5]. - **AstraZeneca** and **Merck** are leading companies in terms of licensing deals from China, with AstraZeneca having the highest number of deals and Merck leading in total upfront payments [4][30]. Financial Health of MNCs - Despite macroeconomic uncertainties, MNCs like **Pfizer** and **Merck** are in strong financial positions, with significant free cash flow available for business development activities, including licensing and M&A [22][23]. Emerging Trends - The report notes a shift in focus for MNCs towards **autoimmune** and **metabolic diseases**, driven by the expiration of patents on blockbuster drugs and the rising sales of **GLP-1** drugs [24][25]. - The average deal value for Chinese assets in oncology is on par with global averages, while the average upfront payment for oncology and immunology is higher than the global average [30]. Conclusion - The findings underscore the growing competitiveness of Chinese biotech assets and the increasing interest from MNCs in out-licensing deals, indicating a robust future for the China healthcare sector [1][4][11].

Core Viewpoint - Roche has entered a $5.3 billion deal with Zealand Pharma to develop a new obesity treatment, petrelintide, aiming to compete in the growing obesity drug market dominated by Novo Nordisk and Eli Lilly [1][2]. Company Developments - The Roche-Zealand partnership will involve co-development and co-commercialization of petrelintide, with Zealand receiving $1.65 billion upfront and potential milestone payments up to $5.3 billion based on trial outcomes and sales [6][7]. - Zealand Pharma's stock surged by 38% on the announcement day, while Roche's shares increased by approximately 4% [7]. Product Insights - Petrelintide is an amylin analog, a new class of weight loss treatment that may offer comparable weight reduction to GLP-1 drugs but with better tolerability and preservation of lean muscle [3][4]. - Analysts project that petrelintide could achieve a 15-20% weight loss in phase 3 trials as a monotherapy, with Zealand calling it a potential "future backbone therapy" for weight management [5][6]. Competitive Landscape - The obesity drug market is becoming increasingly competitive, with Roche's deal positioning it against established players like Novo Nordisk and Eli Lilly, who are also advancing their own obesity treatments [15][16]. - Zealand's CEO indicated that the partnership with Roche could accelerate the timeline for bringing petrelintide to market, potentially ahead of competitors [14][17]. Strategic Fit - The collaboration was driven by a strong scientific and cultural alignment between Roche and Zealand, with both companies emphasizing the importance of a true partnership in the development process [12][9]. - Roche has been actively expanding its obesity treatment portfolio, including the acquisition of Carmot Therapeutics to enhance its capabilities in this area [10][11].