Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The current stock market is characterized by a few multi-trillion dollar market cap companies leading the index, such as NVIDIA, Apple, and Microsoft [2] Group 2 - The article emphasizes the importance of defensive stocks with a medium- to long-term investment horizon [2]

Summary of Hengrui Medicine Conference Call Company Overview - **Company**: Hengrui Medicine (600276.SS) - **Industry**: Pharmaceutical, specifically focusing on innovative drug development and licensing Key Points Licensing Agreement with GSK - Hengrui has licensed out the ex-China rights of HRS-9821, a PDE3/4 inhibitor currently in phase 1 clinical trials, to GSK - The agreement includes options for the ex-China rights of up to 11 early-stage assets targeting oncology, respiratory, autoimmune, and inflammation diseases - The upfront payment for this deal is US$500 million, with potential milestone payments reaching US$12 billion based on development progress, registration, and commercialization, plus tiered royalties based on net sales [1][10] Market Potential for PDE3/4 Inhibitors - Chronic Obstructive Pulmonary Disease (COPD) affects approximately 23 million patients in the US, EU5, and Japan, with around 1.7 million patients uncontrolled on standard therapies - Currently, only three advanced treatments for COPD are approved globally, highlighting a significant unmet clinical need - Hengrui's HRS-9821 could offer advantages over existing treatments, such as a more convenient dosage form, pending further clinical data [2][9] Sales Projections - Risk-adjusted sales estimates for HRS-9821 are projected at RMB 750 million for the China market and RMB 3.2 billion for overseas markets by 2035, assuming a launch in 2030/2031 [3][12] Earnings Revision and Valuation - Earnings estimates have been revised upwards by 29% for 2025E, 0.7% for 2026E, and 0.2% for 2027E due to the licensing agreement - The 12-month price target has been adjusted to RMB 70.26 from RMB 61.74 based on these revisions and market conditions [7][12] Competitive Landscape - The PDE3/4 inhibitor market is competitive, with ensifentrine being a notable product that has achieved global sales of US$114 million in its first eight months of commercialization in 2024 - Hengrui's HRS-9821 is positioned to compete effectively, especially given its potential for broader patient coverage compared to biologic drugs [2][9] Risks and Considerations - Key risks include slower ramp-up of innovative drugs post-NRDL listing, potential failures in late-stage R&D programs, and higher-than-expected R&D expenses for global expansion - There is also a risk of greater-than-expected price cuts for generics and innovative drugs, as well as below-expected progress in licensing and global expansion [12][13] Financial Metrics - Market capitalization is approximately RMB 407 billion (US$56.7 billion) - Projected revenue growth from RMB 27.98 billion in 2024 to RMB 41.86 billion by 2027 [13] Additional Insights - The licensing deal with GSK reflects Hengrui's strategic focus on expanding its global footprint and leveraging partnerships to enhance its pipeline - The company is actively involved in the development of multiple assets, indicating a robust pipeline that could drive future growth [10][12]

Summary of Hengrui - A Conference Call Company Overview - **Company**: Hengrui Pharmaceuticals - **Industry**: Healthcare, specifically pharmaceuticals Key Points Partnership with GSK - Hengrui and GSK entered an agreement granting GSK exclusive global rights (excluding Greater China) to Hengrui's PDE3/4 inhibitor HRS-9821, currently in Phase 1 trials [2][7] - The deal includes collaborative development of up to 11 preclinical projects, with Hengrui leading R&D until Phase 1 completion [2][7] - GSK will pay Hengrui an upfront fee of **US$500 million** and potential milestone payments totaling **US$12 billion** if GSK exercises its option on the projects [2][7] Market Reaction - Following the announcement, Hengrui's H/A shares increased by **17%** and **10%**, outperforming the HSI/SHSZ300 index which saw a **0-1%** increase [2][7] - The positive market reaction indicates growing recognition of Hengrui's early pipeline assets by multinational corporations [2][7] Competitive Landscape - The deal is compared to Merck's recent acquisition of Verona, which also involved a PDE3/4 inhibitor, highlighting a trend of large pharma companies recognizing the value of Hengrui's assets [2][15] Financial Performance and Projections - Hengrui's revenue is projected to grow from **Rmb 27,985 million** in FY24 to **Rmb 35,399 million** in FY26, reflecting a year-over-year growth of **22.6%** in FY24 and **12.4%** in FY25 [9][22] - Adjusted EBITDA is expected to increase from **Rmb 7,468 million** in FY24 to **Rmb 10,393 million** in FY26, with an EBITDA margin improving from **26.7%** to **29.4%** [9][22] Valuation and Investment Thesis - Current price target for Hengrui is set at **Rmb 52.00** based on a DCF valuation, with a terminal growth rate of **4%** and a WACC of **9.3%** [10][11] - Despite strong R&D capabilities and potential for sustained growth, Hengrui's current valuation is higher than many peers, which may limit future upside [10][17] Risks - Key downside risks include potential rejection of PD-1 marketing application by the FDA and underperformance of clinical data from its ADC program [20] - Upside risks involve stronger-than-expected sales growth and earnings [20] Performance Metrics - Hengrui's market cap is approximately **$55.2 billion** with a share price of **Rmb 62.04** as of July 28, 2025 [9][10] - The company has a free float of **50.9%** and a 52-week share price range of **Rmb 62.04 - 39.62** [9][10] Conclusion - Hengrui's strategic partnership with GSK enhances its market position and validates its early-stage assets, while financial projections indicate robust growth potential. However, the company's high valuation relative to peers poses a risk to future upside, warranting a neutral rating from analysts.

Industry Overview - The second-quarter earnings season for the drug and biotech sector is in full swing, with major companies like Pfizer, Eli Lilly, Amgen, Gilead Sciences, and Novo Nordisk set to announce results [1] - The earnings season began mid-July with Johnson & Johnson reporting strong results, exceeding estimates for both earnings and sales [1] Company Performance Pfizer (PFE) - Pfizer has consistently exceeded earnings expectations in the last four quarters, with an average earnings surprise of 43.49% [6] - The Zacks Consensus Estimate for second-quarter sales and earnings is $13.78 billion and 58 cents per share, respectively [6] - Higher sales from products like Vyndaqel and Padcev are expected to offset weaker sales from Prevnar and Ibrance [8] Eli Lilly (LLY) - Eli Lilly's performance has been mixed, exceeding earnings expectations in two of the last four quarters, with an average earnings surprise of 6.69% [11] - The Zacks Consensus Estimate for second-quarter sales and earnings stands at $14.75 billion and $5.61 per share, respectively [11] - Strong demand for Mounjaro and Zepbound is anticipated to drive top-line growth [12] Amgen (AMGN) - Amgen has shown strong performance, beating earnings estimates in each of the last four quarters, with an average earnings surprise of 8.34% [14] - The Zacks Consensus Estimate for second-quarter sales and earnings is $8.86 billion and $5.26 per share, respectively [14] - Sales growth is expected to be driven by products like Evenity and Repatha, despite price declines due to higher rebates [15] Gilead Sciences (GILD) - Gilead's performance has been mixed, with earnings beating estimates in three of the last four quarters, averaging a surprise of 16.48% [17] - The Zacks Consensus Estimate for second-quarter sales and earnings is $6.95 billion and $1.95 per share, respectively [17] - Increased demand for HIV therapies like Biktarvy is expected to boost sales [18] Novo Nordisk (NVO) - Novo Nordisk's performance has been mixed, with earnings beating estimates in one of the last four quarters, delivering an average surprise of 0.02% [20] - The Zacks Consensus Estimate for second-quarter sales and earnings is $11.79 billion and 93 cents per share, respectively [20] - The company lowered its 2025 sales and operating profit growth outlook due to weaker momentum in key markets for its semaglutide-based drugs [21]

Core Viewpoint - The global cell freezing preservation solution market is projected to reach $160 million by 2031, with a compound annual growth rate (CAGR) of 4.8% from 2025 to 2031 [2]. Market Size, Classification, and Application - The global market for cell freezing preservation solutions is expected to grow significantly, driven by advancements in regenerative medicine and cell therapy [15][21]. - The major demand source currently comes from biotechnology companies, accounting for approximately 54.8% of the market share [10]. - The leading product type is serum-free cell freezing culture medium, which holds about 92.7% of the market share [11]. Industry Development Trends - There is a growing demand in niche markets, particularly in stem cell therapy, immune cell therapy (such as CAR-T), and gene therapy, which is driving market diversification [14]. - Serum-free freezing solutions are gaining traction due to their ability to reduce external substance interference and improve cell quality [14]. - Innovations in products and technology, including new cryoprotectants and smart monitoring systems, are enhancing the efficiency and precision of cell freezing [14][20]. Major Driving Factors - The progress in regenerative medicine and cell therapy is leading to an increased demand for high-quality cell freezing solutions [15]. - The rise of precision medicine is creating a growing need for personalized treatment, particularly for patient-specific cell preservation [16]. - The development of biobanks and tissue sample banks is also contributing to the sustained demand for cell freezing solutions [19]. Industry Development Constraints - High production and usage costs of cell freezing solutions pose a challenge, particularly for small and medium enterprises and in developing countries [22]. - The lack of standardization in technology and application can lead to varying preservation outcomes for different cell types [23]. - Despite advancements, cell damage during the freezing process remains a significant issue, particularly affecting cell viability in immune and stem cell therapies [24]. - Regulatory and compliance requirements vary by country, complicating international market expansion [25]. - Limited awareness and education about cell freezing solutions in emerging markets may hinder broader acceptance [26].

Core Insights - Ascentage Pharma Group International is participating in the Evercore China Biotech Summit from August 19 to 21, 2025, in Shanghai, China [1][2] - The company is focused on addressing unmet medical needs in cancers and has developed a pipeline of innovative drug candidates [3] Company Overview - Ascentage Pharma is a global biopharmaceutical company with a rich pipeline targeting key proteins in the apoptotic pathway and next-generation kinase inhibitors [3] - The lead asset, olverembatinib, is the first third-generation BCR-ABL1 inhibitor approved in China for specific types of chronic myeloid leukemia (CML) and is included in the China National Reimbursement Drug List [4] - The second lead asset, lisaftoclax, is a novel Bcl-2 inhibitor recently approved for treating relapsed and/or refractory chronic lymphocytic leukemia (CLL) and small lymphocytic lymphoma (SLL) [5] Clinical Trials and Research - Ascentage Pharma is conducting several global registrational Phase III trials for olverembatinib and lisaftoclax, targeting various patient populations and conditions [4][5] - The company has established partnerships with leading biotechnology and pharmaceutical companies, enhancing its research and development capabilities [6]

Conference call begins at 4:30 p.m. Eastern time today Highlights from the second quarter of 2025 and recent weeks include the following: Merck advanced Phase 1 Epstein-Barr virus vaccine trial (NCT06655324). This investigational vaccine candidate is being developed in collaboration with Merck and evaluates safety and tolerability in up to 200 healthy adults. Based on analysis of these results, Merck will determine whether and how to proceed with Phase 2 studies. ModeX continued to advance its immuno-oncolo ...

Core Insights - Merck (MRK) announced a multi-year optimization initiative aimed at saving $3 billion in annual costs by the end of 2027, coinciding with its second-quarter results on July 29 [1][12] - The restructuring will involve job cuts in administrative, sales, and R&D sectors, as well as a reduction in global real estate footprint, with savings reinvested into high-growth areas of pipeline development [2][12] - The initiative is part of Merck's strategy to diversify its revenue base, which is currently heavily reliant on Keytruda, a PD-L1 inhibitor that accounts for approximately 50% of its pharmaceutical sales [3][4] Financial Performance - Keytruda generated sales of $7.96 billion in Q2 2025, reflecting a 9% year-over-year increase [4] - Sales of Gardasil, Merck's second-largest product, fell by 55% in Q2 2025 to $1.13 billion, primarily due to decreased demand in China and timing of public-sector purchases [5] - Merck's new products, including Capvaxive and Winrevair, are showing promising sales growth, with Capvaxive generating $129 million (up 20.6% sequentially) and Winrevair generating $336 million (up 20% sequentially) in Q2 2025 [10] Strategic Initiatives - Merck is actively pursuing mergers and acquisitions (M&A) to bolster its pipeline, with its phase III pipeline nearly tripling since 2021 [6] - The company announced a definitive agreement to acquire Verona Pharma for approximately $10 billion, expected to close in Q4 2025, which will enhance its cardio-pulmonary portfolio [7][8] - Recent multi-billion-dollar deals with Chinese biotechs aim to diversify Merck's product offerings across various therapeutic areas [9] Market Position - Year-to-date, Merck's shares have declined by 16.9%, contrasting with a 1% increase in the industry [15] - Merck's price/earnings ratio stands at 8.87, which is lower than the industry average of 15.11 and its 5-year mean of 12.80, indicating an attractive valuation relative to peers [16] Earnings Estimates - The Zacks Consensus Estimate for Merck's 2025 earnings has decreased from $8.93 to $8.87 per share, while the estimate for 2026 has dropped from $9.74 to $9.64 over the past 60 days [19]

Core Insights - Merck (MRK) reported Q2 2025 adjusted EPS of $2.13, exceeding estimates, but a 7% decline year-over-year on a reported basis due to a $200 million upfront payment for a license agreement with Hengrui Pharma [2][9][17] - Revenues decreased 2% year-over-year to $15.81 billion, aligning with consensus estimates [3][9] Sales Performance of Oncology Drugs - Keytruda sales reached $7.96 billion, a 9% increase, driven by strong uptake in various cancer indications, surpassing estimates [4][9] - Alliance revenues from Lynparza and Lenvima contributed positively, with Lynparza sales up 15% to $370 million and Lenvima revenues totaling $265 million, up 5% [5] Sales Performance of Other Key Products - HPV vaccine sales (Gardasil and Gardasil 9) fell 55% to $1.13 billion due to reduced demand in China, missing estimates [7] - Sales of other vaccines showed mixed results, with Vaxneuvance increasing 20% to $229 million, while Rotateq and Pneumovax 23 saw significant declines [8][10] Animal Health Segment - The Animal Health segment generated $1.65 billion in revenues, an 11% increase year-over-year, driven by higher demand and the inclusion of Elanco aqua business sales [12] Cost and Margin Discussion - Adjusted gross margin improved to 82.2%, up 130 basis points year-over-year, attributed to a favorable product mix [13] - Adjusted R&D spending rose 15% to $3.99 billion, influenced by the upfront payment to Hengrui Pharma and increased compensation costs [14] 2025 Guidance - Merck narrowed its 2025 revenue guidance to $64.3-$65.3 billion, reflecting a less negative currency impact [15] - Adjusted EPS guidance is now between $8.87 and $8.97, accounting for a revised negative impact from foreign exchange [16] Acquisition Plans - Merck announced plans to acquire Verona Pharma for approximately $10 billion, expected to close in Q4 2025, which will enhance its portfolio in chronic obstructive pulmonary disease [19]

Core Insights - Merck reported $15.81 billion in revenue for Q2 2025, reflecting a year-over-year decline of 1.9% and an EPS of $2.13, down from $2.28 a year ago, with a slight revenue surprise of -0.02% against estimates [1] - The consensus EPS estimate was $2.01, resulting in an EPS surprise of +5.97% [1] Financial Performance Metrics - Merck's stock has returned +6.2% over the past month, outperforming the Zacks S&P 500 composite's +3.6% [3] - The company holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Sales Performance by Product - Keytruda (Oncology) U.S. sales reached $4.75 billion, exceeding the average estimate of $4.67 billion, with a year-over-year increase of +7.6% [4] - Keytruda (Oncology) International sales were $3.21 billion, surpassing the $3.16 billion estimate, marking a +12.2% year-over-year change [4] - Janumet (Diabetes) U.S. sales were $68 million, significantly above the $45.63 million estimate, reflecting a +300% year-over-year increase [4] - Lynparza (Oncology) U.S. alliance revenue was $174 million, exceeding the $140.82 million estimate, with a +13.7% year-over-year change [4] - Lynparza (Oncology) international alliance revenue reached $370 million, surpassing the $321.44 million estimate, representing a +16.7% year-over-year increase [4] - Winrevair (Cardiovascular) sales were $336 million, slightly below the $343.79 million estimate [4] - Lenvima (Oncology) alliance revenue was $265 million, exceeding the $244.01 million estimate, with a +6.4% year-over-year change [4] - Keytruda (Oncology) total sales were $7.96 billion, slightly above the $7.9 billion estimate, reflecting a +9.4% year-over-year change [4] - Animal health sales reached $1.65 billion, exceeding the $1.55 billion estimate, with an +11.1% year-over-year increase [4] - Gardasil (Vaccines) sales were $1.13 billion, below the $1.3 billion estimate, showing a -54.6% year-over-year decline [4] - Welireg (Oncology) sales were $162 million, exceeding the $154.16 million estimate [4] - Lagevrio (Virology) sales were $83 million, surpassing the $55.63 million estimate, but reflecting a -24.6% year-over-year decline [4]