Summary of Key Points from Conference Call Records Industry Overview - The conference call discusses advancements in small RNA (siRNA) drug development, particularly in the context of cardiovascular disease treatment and metabolic disorders [1][3][12]. Core Insights and Arguments - **Inclisiran as a Leading siRNA Drug**: Inclisiran demonstrates significant lipid-lowering effects similar to vaccines, requiring administration only twice a year, enhancing patient compliance [1][3]. - **Mechanism of Action**: siRNA not only clears existing target proteins but also inhibits the future production of these proteins, such as PCSK9, providing a more durable treatment effect compared to monoclonal antibodies [1][4][6]. - **Safety and Efficacy**: siRNA is considered safer than gene editing techniques as it does not alter DNA, thus minimizing risks associated with off-target effects and ethical concerns [5][6]. - **Sales Growth of Novartis' PCSK9 siRNA Product**: The product has seen rapid sales growth due to its ability to target liver cells and provide long-lasting effects, with injection intervals of up to six months or even a year [6][12]. - **Challenges in siRNA Delivery**: Effective delivery remains a significant challenge, with the Galenic system being the most mature and clinically validated for liver-targeted delivery [7][19]. - **Potential in Metabolic Weight Loss**: siRNA technology shows promise in metabolic weight loss, but further research is needed to confirm its effectiveness [8][20]. Additional Important Content - **Targeting Cholesterol and Triglycerides**: ANGPTL4 and APOC3 are highlighted as key targets for cholesterol and triglyceride management, respectively, with a focus on achieving cardiovascular benefits [8][10]. - **LPA and LDL in Cardiovascular Risk**: High levels of LPA can indicate cardiovascular risk even when LDL levels are low, suggesting that both should be targeted for optimal cardiovascular health [10]. - **Combination Therapy Potential**: Combining siRNA with statins or other oral medications can significantly enhance lipid-lowering effects, but requires careful monitoring of biochemical indicators for safety [14][15]. - **Long-term Patient Management**: Regular monitoring of biochemical markers is crucial for patients on long-term lipid-lowering therapies, especially in populations with higher intolerance to statins [15][16]. - **Future of siRNA in Clinical Practice**: siRNA drugs could potentially become first-line treatments if they demonstrate sufficient efficacy and safety through large-scale clinical trials [12][13]. Conclusion - The siRNA technology landscape is evolving, with significant potential in treating cardiovascular diseases and metabolic disorders. However, challenges in delivery systems and the need for extensive clinical validation remain critical for its future success in clinical applications [17][23].

Core Viewpoint - After parting ways with Pfizer, Zhejiang Hai Zheng Pharmaceutical Co., Ltd. is facing significant challenges in its development, despite recent approval of its fumarate bedaquiline raw material, which brings a glimmer of hope for the company [1] Group 1: Company Background - Hai Zheng Pharmaceutical was founded in 1956 and listed on the A-share market in 2000, operating as a state-controlled comprehensive pharmaceutical group with a diverse portfolio including chemical drugs, biological drugs, and veterinary drugs [2] - The company’s core products include the self-developed first-class new drug Haibo Maibu tablets and other medications for liver bile accumulation treatment [2] Group 2: Partnership with Pfizer - The partnership with Pfizer began in September 2012, forming Hai Zheng Pfizer Pharmaceutical Co., Ltd. with a total investment of $295 million, where Hai Zheng held a 51% stake [2] - Initially, the collaboration was beneficial, with the antibiotic "Tezhixing" becoming a major revenue source, contributing significantly to the company's profits in 2013 and 2014 [2][3] Group 3: Challenges Post-Partnership - In 2015, production issues at Pfizer's overseas factories led to a significant drop in sales, and by 2017, Pfizer completely exited the partnership, leaving Hai Zheng to adjust its strategies without a key growth driver [3] - The company has since faced continuous revenue declines from 2022 to 2024, with a drop of 0.82%, 13.82%, and 5.65% year-on-year, and a further decline of 3.48% in Q1 2025 [4] Group 4: Impact of Market Dynamics - The company’s performance has been adversely affected by centralized procurement policies, leading to a significant reduction in market share and a decrease in revenue from its main products [5][6] - In 2023, the revenue from self-operated pharmaceutical business decreased by 10.41 billion yuan, indicating the impact of competitive pressures in the market [6] Group 5: Innovation and R&D - Hai Zheng's self-developed drug Haibo Maibu tablets has shown promising sales growth, reaching over 4 billion yuan in 2023, with potential peak sales estimated at 19.54 billion yuan if market penetration improves [7] - The company has recently received approval for clinical trials of HS387 tablets targeting advanced ovarian cancer and non-small cell lung cancer, but faces stiff competition in these therapeutic areas [8] - The approval of fumarate bedaquiline raw material is a positive development, but the timeline for mass production and revenue contribution remains uncertain [9] Group 6: R&D Investment Trends - R&D investment has fluctuated, with 4.42 billion yuan in 2022, decreasing to 3.94 billion yuan in 2023, but showing a slight increase to 4.16 billion yuan in 2024 [9][10] - The company is establishing advanced R&D platforms, but the effectiveness and impact of these initiatives on innovation remain unclear [10]

Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical industry as of May 11, 2025 [1]. Core Insights - The A-share innovative drug sector saw a weekly increase of 2.33%, outperforming the CSI 300 index by 0.33 percentage points, while the biopharmaceutical sector rose by 0.75% [2][17]. - In the past six months, the A-share innovative drug sector has cumulatively increased by 5.43%, outperforming the CSI 300 index by 9.13 percentage points, whereas the biopharmaceutical sector has decreased by 10.55% [2][17]. - The Hong Kong innovative drug sector experienced a decline of 2.14%, underperforming the Hang Seng Index by 3.75 percentage points, with a cumulative increase of 22.08% over the past six months [2][20]. - The XBI index in the US fell by 8.59% this week, with a cumulative decline of 22.72% over the past six months [2][23]. Summary by Sections Domestic Key Innovative Drug Progress - In May, one new drug was approved for market launch in China, with no new indications approved [3][41]. Overseas Key Innovative Drug Progress - In May, there were no NDA or BLA approvals in the US, Europe, or Japan for innovative drugs [4][45]. Global Key Innovative Drug Transaction Progress - A total of 12 key transactions occurred globally this week, with one disclosed transaction amounting to 415 million USD between Alchemab Therapeutics and Eli Lilly [5]. Market Performance - The report indicates that 39 stocks in the innovative drug sector rose while 67 fell during the week, with the top gainers being HaiChuang Pharmaceutical-U (22.76%), Changchun High-tech (8.99%), and Zhongsheng Pharmaceutical (8.98%) [2][16]. - The top decliners included Fuhong Hanlin (-12.64%), Connaught-B (-12.40%), and Boan Biotechnology (-11.77%) [2][16]. Clinical Trials and Approvals - In May, there were 23 newly announced clinical trials in China, including 17 in BE/I phase, 4 in II phase, and 2 in III phase [31].