Summary of Pacira BioSciences FY Conference Call (January 14, 2026) Company Overview - **Company**: Pacira BioSciences (NasdaqGS:PCRX) - **Mission**: Deliver innovative, non-opioid pain management therapies to transform lives [2][3] - **Sales**: Reported unaudited sales of $726 million for the previous year [2] - **Employees**: Over 800 engaged employees [2] - **Patients Served**: More than 18 million patients helped to date [2] Product Portfolio - **Key Products**: - **Exparel**: Flagship product for nerve block - **Zilretta**: Long-acting corticosteroid for osteoarthritis pain - **Iovera**: Medical device using cryoneurolysis for pain management [3] Strategic Developments - **5x30 Strategy**: Aims to help over 3 million patients by 2030, achieve double-digit top-line growth, expand profitability by five points, add five new programs to the pipeline, and establish five partnerships [6][7] - **Partnerships**: - **Johnson & Johnson MedTech**: Triples reach for Zilretta [9] - **LG Chem**: Gains commercial rights for Exparel in Asia-Pacific, with potential for Zilretta sales [10] - **Intellectual Property**: Strong IP estate with 21 patents, providing robust defense against future Paragraph IV filers [5][12] Financial Performance - **Stock Performance**: 40% increase in stock price from January to December [5] - **Profitability**: Expected margins of 80%-82% for the current year [7] - **Share Buyback**: $150 million worth of stock repurchased, reducing outstanding shares to 41 million [11] Pipeline and Data Catalysts - **Upcoming Data Catalysts**: - **PCRX201**: Local gene therapy with promising phase one results [8][22] - **Iovera Spasticity**: Interim readout expected in the first half of the year [21] - **Zilretta for OA of the Shoulder**: Registrational study readout anticipated [21] Market Access and Growth Strategy - **NOPAIN Legislation**: Aimed at reducing opioid prescriptions; 102 million lives covered by the end of the year [19] - **Market Access**: Over 90% of business contracted, with ongoing efforts to educate stakeholders [20][44] - **Volume Growth**: Notable growth in the second half of the year, with 9% and 7% volume growth in Q3 and Q4 respectively [36] Challenges and Future Outlook - **Behavior Change**: Ongoing efforts to drive behavior change among healthcare professionals regarding non-opioid pain management [31] - **Market Education**: Continued focus on educating physicians and patients about the benefits of non-opioid options [41][43] - **Long-term Potential**: Exploration of additional indications for PCRX201, including potential for repeat dosing and expansion to other joints [33][35] Conclusion - **Overall Sentiment**: The company is optimistic about its growth trajectory, driven by a strong product pipeline, strategic partnerships, and a commitment to transforming pain management [28][30]

Summary of Expert Call on GLP-1 Drugs in China Industry Overview - The discussion focused on the GLP-1 drug market in China, highlighting recent clinical developments and commercial updates [1] Key Updates on GLP-1 Drugs 1. **siRNA Therapy**: - The INLIGHT study by Wave Life Science (WVE US) reported a promising 9.4% reduction in visceral fat and a 3.2% gain in lean mass, addressing a common issue with GLP-1 drugs that typically result in muscle loss [2] - Potential for siRNA therapies to be combined with other drugs for better weight management, pending further clinical trials [2] 2. **Small-Molecule Oral GLP-1 Drugs**: - Orforglipron from Eli Lilly and aleniglipron from Structure Therapeutics were discussed, with orforglipron noted for its efficacy [3] - Aleniglipron may have higher manufacturing costs due to its dosing requirements (120mg) [3] - The expert indicated a decline in potential buyers for small molecules in China as several multinational corporations have already acquired such drugs [3] 3. **Eli Lilly's Retatrutide**: - This triple-agonist drug demonstrated a 28.7% change in body weight in the TRIUMPH-4 clinical trial [4] - Investors are advised to monitor long-term side effects, particularly dysesthesia, which affected 20.9% of the 12mg group [4] - Upcoming data from TRIUMPH-1, TRIUMPH-2, and TRIUMPH-3 trials in 2026 will be crucial for assessing long-term effects [4] Market Dynamics in China - Anticipated significant price cuts for GLP-1 drugs like tirzepatide may be offset by increased market penetration, making these drugs more affordable for patients [5] - Competing domestic drugs, such as mazdutide from Innovent, are expected to follow tirzepatide's pricing strategy [5] Competitive Landscape - The China market is expected to become increasingly crowded with more GLP-1 molecules, leading to potential price reductions [6] - 2026 is projected to be a pivotal year for companies like Innovent, Eli Lilly, and Novo Nordisk, as well as potential generic makers of semaglutide [6] - Leading Chinese companies, including Innovent and Hengrui, are expected to pose strong competition to the global leaders Eli Lilly and Novo Nordisk, while smaller players may seek collaborations [6]

Key Takeaways from China Biopharma Trip Industry Overview - The trip focused on the Chinese biopharmaceutical industry, highlighting the rapid development of local biotech companies and their competitive landscape in drug discovery and clinical R&D [3][5][9]. Core Insights 1. **Rapid Development of Biotech Companies**: Local Chinese biotech firms have shown a remarkable pace of development, with examples like Pyrotech achieving clinical proof-of-concept in 4 years and Hengrui progressing from preclinical studies to IND acceptance in 6 months [3]. 2. **Factors Driving Speed**: Key factors contributing to this accelerated development include streamlined decision-making, a concentrated ecosystem of contract research organizations (CROs), strong fundamental research, and experienced clinical investigators [3]. 3. **Licensing and Partnerships**: Chinese biotech companies generally prefer licensing out their products, but more mature firms are increasingly seeking co-development and co-commercialization agreements, as seen with Innovent's partnership with Takeda [4]. 4. **Pipeline Diversity**: Companies visited exhibited broad pipelines across multiple disease areas, with a notable focus on antibody-drug conjugates (ADCs) and a competitive landscape characterized by intense pressure [5]. 5. **Obesity Market Developments**: Eccogene is optimistic about its obesity drug ECC5004, while Innovent noted rapid uptake of mazdutide, indicating strong competition in the obesity segment [7]. 6. **Vaccine Market Challenges**: Zhifei highlighted ongoing challenges in the vaccine market due to vaccine hesitancy and pricing pressures, complicating commercialization efforts [8]. Competitive Landscape 1. **ADC Focus**: Nearly half of the companies visited are engaged in ADC research, particularly in oncology, indicating China's emergence as an ADC hub [5]. 2. **Emerging Therapies**: Companies are exploring bispecific/trispecific antibodies and new-generation cell therapies, with a focus on innovative approaches to cancer treatment [5][31]. 3. **Market Dynamics**: The Chinese pharmaceutical market is valued at $160-180 billion, with the innovative market growing at 20-30% annually, expected to reach $50-60 billion in five years [23]. Company-Specific Highlights 1. **3SBio and Pfizer**: 3SBio expressed optimism regarding its PD-1xVEGF bispecific antibody program, with plans for multiple trials to establish the compound as a backbone therapy [9]. 2. **Kelun Biotech**: Kelun is advancing its TROP2 targeting ADC, sac-TMT, with expectations of significant peak sales based on recent clinical data [10]. 3. **Hengrui's Lp(a) Program**: Hengrui is encouraged by Phase 2 data for its Lp(a) targeted oral small molecule drug, which could transform cardiovascular disease treatment [10]. 4. **Zhifei's Gardasil Challenges**: Zhifei reported difficulties in the vaccine market, particularly with Gardasil, due to pricing pressures and vaccine hesitancy [10]. Additional Observations - **Regulatory Environment**: Sanofi noted that early-stage R&D in China is 50% cheaper and 60% faster than in the US, with plans to invest more in local partnerships [23]. - **Pricing Dynamics**: The conversation with obesity experts revealed insights into pricing dynamics and the competitive landscape for obesity treatments [7]. Conclusion The trip underscored the dynamic nature of the Chinese biopharma industry, characterized by rapid innovation, strategic partnerships, and a competitive landscape that poses both opportunities and challenges for local and multinational companies [3][5][23].

Investment Rating - The report maintains a positive outlook on various sectors, with specific "Buy" ratings for companies such as AIA Group, ASMPT, Atour, Hengrui, Sunny Optical, Tencent, and others [13][14][28][33]. Core Insights - The 15th Five-Year Plan (FYP) emphasizes technological innovation, consumption rebalancing, and building a strong domestic market, which are expected to drive growth in sectors like technology, healthcare, and renewables [14][29]. - The report anticipates a stable external environment for China, with net exports remaining a key growth driver despite potential challenges from high bases and external demand uncertainties [7]. - The healthcare sector is highlighted as a key beneficiary of government policies, with a focus on innovation and globalization, particularly in medical devices and pharmaceuticals [29]. - The consumer sector is shifting towards experience and service consumption, with a growing emphasis on well-being and the silver economy, indicating potential growth areas for companies in these segments [27]. Economics - The report projects a growth target of around 5.0% YoY for 2026, with a focus on policy continuity and structural support for consumption [7]. - The RMB exchange rate is expected to become a focal point, with potential for significant movements as trade tensions ease and internationalization efforts continue [7]. Commodities - The report notes a shift in China's commodity fundamentals due to economic transitions, with a focus on domestic demand and energy self-sufficiency [9][10]. - The Action Plan for the Nonferrous Metals Industry indicates a shift towards high-quality growth, with supply growth expected to remain constrained [9]. Sector Views - **Autos and Parts**: The sector is poised for growth driven by advancements in Robotaxi and ADAS technologies, with key players expected to benefit from commercialization efforts [19]. - **Banks**: The banking sector is expected to outperform due to positive earnings growth and attractive dividend yields, particularly among large H-share banks [22]. - **Brokers**: The report highlights a trend of households reallocating wealth into equities, benefiting brokers as market proxies [26]. - **Consumer**: Key investment themes include a shift towards experiential consumption and a focus on well-being, with specific companies identified as top buys [27][28]. - **Healthcare**: Innovation and globalization are seen as critical drivers, with a focus on companies with strong pipelines and global expansion capabilities [29]. - **Insurance**: The sector is viewed positively, with opportunities arising from comprehensive enhancements across various business lines [33]. Top Buys - The report lists several top buy recommendations across sectors, including AIA Group, Hengrui, Tencent, and Anta, among others, indicating strong growth potential and favorable market conditions [13][14][28][33].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Hong Kong Equity Market - **Current Market Performance**: Hong Kong's equity market (MXHK) has shown a 26% year-to-date return in US terms, making it the cheapest market in the Asia-Pacific region excluding ASEAN, with a forward P/E ratio of -0.3 standard deviations compared to its 10-year average of 16x [2][76] Core Insights and Arguments - **Market Targets**: The end-2025 targets for the MXHK index are maintained at 13,000 (base) and 14,000 (bullish). For 2026, potential upside targets are set at 14,366, 15,522, and 16,679, reflecting growth assumptions of 6% and 9% year-on-year for 2025 and 2026 respectively [2][8] - **Synchronized Recovery**: A synchronized recovery across various sectors in Hong Kong is noted, with significant improvements in IPO fundraising, residential property prices, and retail sales growth [5][58] - **Macau Gaming Sector**: The Macau gaming sector is experiencing a cyclical upturn, with GGR (Gross Gaming Revenue) showing a 13% year-on-year increase in 3Q25, reaching MOP62.6 billion, which is 88% of pre-COVID levels [52][57] - **Investment Inflows**: There has been a notable increase in Southbound inflows to Hong Kong, reaching a record HK$1.17 trillion in 9M25, approximately 2.2 times the level of 2024 [38][49] Important but Overlooked Content - **Headwinds**: Near-term challenges include renewed US-China tensions, rising HIBOR rates, potential oversupply from IPO lock-up expirations, and risks in the commercial real estate sector [5][100] - **Housing Market Stabilization**: After a 27% correction since 2021, Hong Kong's housing market is stabilizing, with forecasts of a 3-5% year-on-year price increase in 2026 [45][49] - **Market Sentiment Index**: The JPM HK Market Sentiment Index indicates a positive outlook, having reached a decade high of +1.5 standard deviations in September 2025, suggesting strong capital market activities [70][65] - **Valuation Comparison**: Despite strong performance, MXHK trades at a forward P/E ratio that is -0.3 standard deviations below its 10-year average, indicating compelling valuation compared to historical levels and regional peers [76][78] Top Picks for 2026 - **Recommended Stocks**: - **Futu Holdings Ltd (FUTU.O)**: Capital market strength - **HKEX (0388.HK)**: Financials - **Galaxy Entertainment (0027.HK)** and **MGM China (2282.HK)**: Macau gaming upcycle - **Techtronic Industries (0669.HK)**: Resilient overseas demand - **Henderson Land Development (0012.HK)**, **China State Construction International (3311.HK)**, and **MTR Corp Ltd (0066.HK)**: Northern Metropolis development [6][2] This summary encapsulates the key insights and data points from the conference call, providing a comprehensive overview of the current state and outlook of the Hong Kong equity market.

Summary of Key Points from the Global Healthcare Conference Call Industry Overview - **Healthcare Sector Performance**: The healthcare sector has underperformed, with a year-to-date increase of only 3% compared to the S&P 500's 13% increase. Sub-sector performance varies significantly, with Biotech up 16%, Pharma up 4%, and Managed Care down 25% [1][11][12]. - **S&P 500 Weighting**: The healthcare sector's weighting in the S&P 500 has dropped to approximately 9.1%, the lowest since 1994, compared to 16% two and a half years ago [1][11]. Core Insights and Arguments - **Optimism for 2026**: Despite recent challenges, there are signs of optimism for 2026, with expectations of improved demand and sentiment in the healthcare sector [1][9][46]. - **Biopharma M&A Activity**: M&A volumes in the biopharma sector are expected to exceed those of the second half of 2024, driven by the need to fill clinical pipelines [2][21]. - **Impact of Tariffs**: Tariffs have been a persistent issue affecting U.S. MedTech, with valuations fluctuating. The S&P Equipment & Supplies Index P/E is around 1.0x, down from a 10-year average of 1.26x [3][30]. - **Life Sciences Uncertainty**: There remains uncertainty in the life sciences sector, with management teams focusing on NIH budget changes and global tariffs as key factors influencing demand [4][46]. Additional Important Insights - **China as an Innovation Hub**: China is emerging as a global hub for biotech innovation, with low geopolitical risk, particularly for CROs with domestic exposure [6][29]. - **Healthcare Technology and Distribution**: This segment is relatively insulated from political risks but still faces challenges from drug pricing policies and potential Medicaid cuts [5][49]. - **AI Integration in MedTech**: The integration of AI in MedTech is increasing, with over 1,200 AI-enabled devices documented, indicating a significant technological shift in the industry [32][33]. - **Tariff and FX Impact on European MedTech**: In Western Europe, FY25 and FY26 EPS forecasts have decreased by 9% and 10% respectively, largely due to tariffs and foreign exchange impacts [36][38]. Key Themes and Stock Picks - **Top Picks by Sector**: - **U.S. Pharmaceuticals and Biotech**: LLY, VRTX, GILD [10]. - **U.S. SMID Cap Biotech**: ARGX [10]. - **U.S. MedTech**: BSX, EW, IRTC [10]. - **Western Europe MedTech & Life Sciences**: ALC, FRE-DE, SNN [10]. - **U.S. Life Sciences Tools & Diagnostics**: A, WST, GH [10]. - **China Healthcare**: Hengrui, Hansoh, Ascletis, Abbisko, Mindray, MicroPort Medbot, Wuxi Apptec, Wuxi Bio [10]. Conclusion - The healthcare sector is navigating through a challenging landscape marked by tariff impacts, policy uncertainties, and varying sub-sector performances. However, there are emerging opportunities, particularly in biopharma M&A and AI integration, which could drive growth as the sector moves into 2026.

Summary of the Conference Call Transcript Industry Overview - **Industry**: China Healthcare - **Key Companies Mentioned**: Akeso, Innovent, Hansoh, BeOne, Simcere, Duality Bio, Leads Bio, GenFleet, CSPC, Sino Biopharm, Mindray Core Insights and Arguments 1. **Investor Focus Areas**: Investors are concentrating on potential licensing-out opportunities, risks associated with potential Executive Orders from the US Administration, and current valuations of biopharma companies [2][3] 2. **Investor Sentiment**: There is a notable interest in Akeso for potential buying opportunities, while BeOne and Simcere are perceived as undervalued [2] 3. **Emerging Companies**: Newer companies like Duality Bio, Leads Bio, and GenFleet are attracting strong interest from investors [2] 4. **Generalist Investors' Participation**: Generalist investors have increased their participation in the healthcare sector year-to-date, with many being equal or overweight relative to the MSCI sector percentage [3] 5. **Caution Among Specialists**: Specialists are becoming more cautious regarding companies driven by business development expectations, particularly CSPC and Sino Biopharm, due to uncertainties around US approvals [4] 6. **Valuation Concerns**: Generalist investors are turning conservative on companies with high business development valuation contributions due to potential restrictions from US Executive Orders [3] 7. **Performance of Core Holdings**: Hengrui and Hansoh are noted for their strong performance as core holdings due to their consistent track record and R&D capabilities [3] Risks and Challenges 1. **Healthcare Industry Risks**: Key risks identified for China's healthcare industry include: - Worse-than-expected price cuts from GPO programs - Intensified competition - Lower-than-expected innovative drug prices negotiated for NRDLs - Slower-than-expected consumption recovery in China - Stricter-than-expected regulatory announcements and implementations - Rising geopolitical tensions affecting operations [6] Additional Insights 1. **Market Dynamics**: Investors are showing interest in relatively inexpensive valuations of CXO and medtech names, looking for potential growth acceleration or recovery [2] 2. **Profit-Taking**: Generalist investors are considering profit-taking on certain names due to difficulties in identifying alpha opportunities in crowded therapeutic areas [3] 3. **IPO Interest**: There is interest in new IPO listings, particularly GenFleet, as investors seek opportunities outside of established names [4] Conclusion The conference call highlighted a cautious yet opportunistic sentiment among investors in the China healthcare sector, with a focus on emerging companies and potential risks stemming from regulatory changes and market dynamics. The overall investor landscape is shifting, with generalist investors becoming more selective and specialists expressing caution regarding business development-driven companies.

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **China Healthcare** sector, particularly the implications of US-China drug out-licensing and potential regulatory changes affecting the biotech and pharmaceutical industries in China [1][2]. Core Insights and Arguments 1. **US Administration's Proposed Restrictions**: The Trump administration is reportedly considering stricter scrutiny on licensing drugs from China, which may include mandatory reviews by the Committee on Foreign Investment in the United States (CFIUS) and higher regulatory barriers for clinical data [2][3]. 2. **Impact on China Biotech Sector**: The proposed executive order (EO) could introduce headline risks and increase share price volatility for companies in the China biotech/pharma sector, especially if large US pharmaceutical companies lobby against these changes [2][3]. 3. **Out-Licensing Trends**: The trend of out-licensing in China has been driven by a unique offering from Chinese biotech firms and a growing demand from global pharma, particularly as major patent cliffs approach in 2027/2028 [2][3]. 4. **Deal-Making Dynamics**: If the EO is implemented, it may slow the pace of deal-making with US partners and shift focus towards non-US partners, potentially limiting the pool of buyers for Chinese biotech assets [3][7]. 5. **Geographic Breakdown of Deals**: In 2023, US partners accounted for 52% of the total deal value and 43% of the deal count in China out-licensing, with EU partners following closely [9][7]. 6. **Selective Licensing**: The EO could lead to more selective licensing of assets, particularly for innovative drugs that may define next-generation treatment paradigms [8][10]. 7. **Potential for Deal Acceleration**: Companies may seek to accelerate deals that are already under discussion in anticipation of heightened geopolitical tensions affecting US-China pharma deals [8][10]. Additional Important Insights 1. **Categories of Companies Affected**: Companies can be categorized based on their global presence and partnerships: - Established global presence (e.g., ONC, LEGN) may face limited impact. - Companies with strong existing global partners (e.g., Kelun Biotech, 3SBio) are expected to be less affected if they have already licensed assets. - Companies with high expectations for business development but not yet closed deals may need to accelerate closures before restrictions take effect [11][13]. 2. **Long-Term Valuation Factors**: The long-term strength of company valuations will depend on the quality of clinical data, execution capabilities, and financial positions [13]. 3. **Market Resilience**: Despite potential short-term challenges, the best-performing companies in the China CDMO sector have shown resilience and the ability to navigate geopolitical uncertainties, which may help restore investor confidence over time [19][20]. This summary encapsulates the critical points discussed in the conference call, highlighting the potential risks and opportunities within the China healthcare sector amidst evolving regulatory landscapes.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Global Biopharma, specifically focusing on China's biotech sector transitioning from generics to innovation - **Projection**: By 2040, China-originated assets are expected to account for 35% of US FDA approvals, up from 5% today, generating approximately US$220 billion in ex-China revenue [6][33][41] Core Insights - **China's Biotech Evolution**: China's biotech sector is moving from being a generics manufacturer to a significant player in drug discovery and development, driven by regulatory harmonization, cost-efficient infrastructure, and a maturing funding ecosystem [6][7][24] - **R&D Returns**: A projected 48% improvement in global R&D returns by 2040 is anticipated due to China's advantages in speed and cost in drug R&D [7][33] - **Loss of Exclusivity (LOE) Challenge**: The global pharma industry faces a US$115 billion LOE cliff by 2035, with oncology, immunology, and cardiometabolic therapies making up over 80% of this shortfall [8][75] - **M&A Opportunities**: US and EU biopharma have a combined M&A capacity of US$480 billion, which is 1.7 times the value needed to fill the LOE gap, indicating a potential surge in cross-border deal-making [9][28] Geopolitical Considerations - **Geopolitical Risks**: Tensions between the US and China could hinder the flow of innovation, with three scenarios outlined: base case (35% FDA penetration), bull case (46%), and bear case (15%) [10][44] - **Co-opetition**: A blend of competition and collaboration is expected as global pharma navigates the dual imperatives of innovation and resilience [11] Investment Implications - **Stock Performance Drivers**: Factors such as M&A activity, regulatory clarity, and the opening of new therapeutic markets are expected to drive stock performance in the pharma and biotech sectors [37] - **Key Players**: Companies like AstraZeneca, Bristol-Myers, Merck, and Pfizer are expected to be active in M&A to replenish their pipelines, particularly through partnerships with Chinese firms [38][51] Emerging Trends - **Innovative Therapies**: Chinese biotechs are increasingly developing "1-to-N" therapies that are commercially viable globally, while also striving for "0-to-1" innovations traditionally dominated by US/EU firms [25][52] - **Pipeline Opportunities**: Companies with strong balance sheets and diversified pipelines are likely to benefit from in-licensing opportunities and successful navigation of patent cliffs [37][53] Conclusion - **Future Outlook**: The global biopharma landscape is shifting, with China's biotech sector poised to play a crucial role in addressing the innovation gap created by LOE challenges, while geopolitical dynamics will continue to influence the pace and nature of this transformation [23][39][44]

Summary of China Pharma and Biotech Conference Call Industry Overview - The China healthcare sector is experiencing its strongest rally since mid-2023, with the Hang Seng Biotech and MSCI China Healthcare indices showing year-to-date (YTD) returns of 57% and 38%, respectively, outperforming broader indices like Hang Seng and MSCI China at 20% and 16% [1][10] - The current market is at 30% of the peak seen during the last healthcare boom in 2020-2021, with a notable shift towards mature companies and top players rather than early-stage firms [1][2] - Public financing has surged, increasing 4 times in 1H25 compared to 1H24, with about two-thirds of IPO and follow-on offerings yielding positive returns [1][12] Market Valuation and Opportunities - Valuations in the China healthcare sector are now at or above global counterparts, with MSCI China healthcare P/S ratios crossing over with S&P 500 healthcare [2] - Individual stock performance varies significantly, with funds showing interest in companies with lower valuation multiples and potential for out-licensing deals [2][52] - Specific companies like CSPC are considered overheated with a PEG ratio of 14.5x, while Hengrui (2.3x) and Sino Biopharm (2.0x) are viewed as cheaper alternatives [3][44] Biotech Sector Insights - Biotech companies are valued based on market cap to projected 2032 revenue, ranging from 2-5x. Companies like BeiGene (2.7x) and Zai Lab (1.2x) are seen as undervalued, while Akeso (4.7x) and Kelun Biotech (5.6x) are considered relatively pricey [4][48] - The biotech sector has seen a significant increase in market capitalization, rising from US$102 billion to US$160 billion YTD 2025 [11] Clinical Trials and R&D - The number of clinical trial starts in China has shown consistent growth, with local assets making up over 50% of the global pipelines for the first time in 2025 [1][33] - Innovative drug modalities, particularly in oncology, have seen a resurgence in clinical trials, indicating sustained R&D efforts despite previous market downturns [32][36] Out-licensing Trends - There has been a boom in outbound licensing deals, with companies like RemeGen and Innovent leading the way. This trend is expected to continue, although there are concerns about saturation in certain drug classes [34][52] - The out-licensing model has remained resilient against geopolitical challenges, with no significant shifts in FDA attitudes towards China-originated drugs [34] Investment Implications - The report rates Akeso, Hansoh, Innovent, and Hengrui as Outperform, while BeiGene, CSPC, Sino Biopharm, and Zai Lab are rated as Market-Perform [7] - A methodological shift in valuation is noted, with increased emphasis on multiple-based valuation for mature companies, while biotechs will continue to use P/S and DCF models [8] Conclusion - The China pharma and biotech sector is on an upward trajectory, driven by strong market sentiment, increased public financing, and a robust pipeline of clinical trials. However, caution is advised regarding valuation levels and the sustainability of the current rally, particularly in the context of out-licensing deals and market saturation [52][53]