Policy Developments - Guizhou Province is advancing the monitoring of adverse reactions to medical institution formulations, highlighting issues such as insufficient awareness and inadequate responsibility among institutions [1] - Liaoning Province is implementing a tiered management system for outpatient medical insurance settlements at designated medical institutions starting next year, aiming to improve the efficiency of medical insurance fund usage [2] Drug and Device Approvals - GlaxoSmithKline announced that the NMPA has approved the use of its Shingrix vaccine for adults aged 18 and older with known diseases or treatments that increase the risk of shingles, addressing a significant health concern in China with approximately 6 million cases annually [2] - Shanghai Pharmaceuticals received FDA approval for its doxycycline capsules, primarily used for treating inflammatory lesions of rosacea, with projected sales of approximately $130 million in the U.S. for 2024 [3] - Gilead Sciences has completed pre-NDA communication with the NMPA regarding its new drug denifanstat for treating moderate to severe acne, planning to submit the application soon [4] - BD Medical's PleurX IPC system has been approved for clinical use in mainland China under the "Hong Kong and Macau Drug and Device Pass" policy [5] Capital Market Activities - Shanghai Guotou signed agreements with 10 general partners during the 2025 Shanghai International Biopharmaceutical Week, marking a significant step in building a comprehensive fund matrix for the biopharmaceutical industry [6][7] - Jinhai Biological announced plans to issue shares through a simplified procedure, which was approved by its board and supervisory board [8] Industry Events - Guangdong Province's Drug Inspection Institute has launched a new experimental zone for batch release, enhancing the province's capacity for vaccine quality assurance [9] Public Sentiment Alerts - Fosun Pharma announced the withdrawal of its registration application for dimethyl succinate for the treatment of non-small cell lung cancer, stating that this will not significantly impact current performance as they plan to improve the registration materials and resubmit [10]

Core Viewpoint - The company, Gilead Sciences-B (01672), has experienced a decline of over 6% in its stock price, currently trading at 14.55 HKD, following the announcement of a share placement and recent financial results [1] Group 1: Share Placement - Gilead Sciences plans to place 52.4 million shares at a price of 16.45 HKD per share, representing a discount of approximately 9.9% from the previous closing price [1] - The net proceeds from the placement are expected to be 468 million HKD, with about 90% allocated for clinical trials related to subcutaneous and oral peptide candidates for obesity [1] - The controlling shareholder, Wu Jinzi, will sell 52.4 million shares at the same price before subscribing to 28.82 million new shares, resulting in a cash-out of 388 million HKD [1] - Following the transaction, Wu Jinzi's ownership will decrease from 62.21% to 58.03% [1] Group 2: Financial Performance - Gilead Sciences reported total revenue of 104 million RMB, reflecting a year-on-year increase of 111.4% [1] - The company's loss narrowed to 87.95 million RMB, compared to a loss of 130 million RMB in the same period last year [1] - Dongwu Securities noted that Gilead Sciences' pipeline is progressing smoothly and aligns with expectations, with clearer timelines for future clinical data disclosures [1] - The likelihood of successful product launches in the future has increased, with the potential for revenue contribution from the drug, Denifasita [1]

Core Viewpoint - The stock of Gilead Sciences-B (01672) has dropped over 6% following the announcement of a share placement and recent financial results, indicating market concerns about the company's capital raising strategy and performance outlook [1] Group 1: Share Placement - Gilead Sciences plans to place 52.4 million shares at HKD 16.45 each, representing a discount of approximately 9.9% from the previous closing price [1] - The net proceeds from the placement are expected to be HKD 468 million, with about 90% allocated for clinical trials related to subcutaneous and oral peptide candidates for obesity [1] - The controlling shareholder, Wu Jinzi, will sell 52.4 million shares and subsequently subscribe to 28.82 million new shares, resulting in a cash-out of HKD 388 million and a reduction in his ownership from 62.21% to 58.03% [1] Group 2: Financial Performance - Gilead Sciences reported total revenue of RMB 104 million, a year-on-year increase of 111.4% [1] - The company's loss narrowed to RMB 87.95 million, compared to a loss of RMB 130 million in the same period last year [1] - Dongwu Securities noted that Gilead Sciences' pipeline is progressing smoothly, with clear timelines for future clinical data disclosures, potentially increasing the likelihood of successful product launches [1]

Core Viewpoint - Gilead Sciences (1672.HK) reported a successful progress in its pipeline for the first half of 2025, leading to an increased probability of successful product launches and an upgraded target price to HKD 29.26, maintaining a "Buy" rating [1] Financial Performance - In the first half of 2025, Gilead Sciences achieved a revenue of HKD 1.08 million, primarily from R&D services; R&D expenses were HKD 146 million, a year-on-year increase of 10.9%, with effective cost control measures in place [2] - As of the end of the first half of 2025, the company had cash and cash equivalents of HKD 1.58 billion, a significant year-on-year increase of 361.9%, providing strong support for future pipeline development [2] Pipeline Progress and Catalysts - The core small molecule GLP-1 pipeline, ASC30, shows a 4-week weight loss rate of 6.5% in Phase I clinical trials in the U.S., outperforming Eli Lilly's oral GLP-1 (Orforglipron) while maintaining comparable safety, with Phase IIa trials expected to report top-line data in Q4 2025 [3] - ASC47, a new THR-β target pipeline for fat loss and muscle gain, has completed dosing in a Phase I trial in the U.S. with results expected in Q4 2025; it shows potential for synergistic effects when used with semaglutide [3] - ASC50, an oral small molecule IL-17 inhibitor targeting psoriasis, has shown promising preclinical data and began Phase I trials in the U.S. in June 2025, with top-line data expected by the end of 2025 [4] - The first-in-class oral small molecule FASN inhibitor, denifanstat, is expected to submit for market approval in China in 2026, potentially becoming a significant revenue driver for the company [4] Earnings Forecast and Valuation - Dongwu Securities has revised Gilead Sciences' revenue forecasts for 2025-2027 to HKD 0.02 billion, HKD 0.64 billion, and HKD 2.03 billion respectively, with net losses projected at HKD 4.18 billion, HKD 3.96 billion, and HKD 3.58 billion for the same period [5]

Core Viewpoint - The company has shown strong progress in its core pipelines and financial performance in the first half of 2025, with significant revenue growth and promising clinical data expected in the near future [1][2][3] Financial Performance - The company's main operating revenue for H1 2025 was 1.08 million, primarily from R&D services [1] - R&D expenses for H1 2025 were 146 million, a year-on-year increase of 10.9%, with effective pipeline adjustments and cost optimizations [1] - Cash and cash equivalents at the end of H1 2025 reached 1.58 billion, a year-on-year increase of 361.9%, mainly due to the maturity of time deposits [1] Pipeline Development - ASC30, the company's core small molecule GLP-1 pipeline, demonstrated a 6.5% weight loss in a 4-week Phase I trial in the U.S., outperforming Eli Lilly's small molecule GLP-1 [1] - The company is currently conducting a Phase IIa trial for ASC30, with top-line data expected in Q4 2025 [1] - ASC47, a new THR-β target pipeline, is in Phase I clinical trials in the U.S., with top-line data anticipated in Q4 2025 [2] - ASC50, an oral small molecule for IL-17, is also in Phase I clinical trials, with top-line data expected by the end of 2025 [2] - The oral small molecule FASN inhibitor, Denifasita, is projected to submit a market application in China by 2026 based on excellent Phase III data [2] Profit Forecast and Investment Rating - The company’s pipeline progress aligns with expectations, increasing the likelihood of successful product launches [3] - Revenue forecasts for 2025-2027 have been adjusted to 0.02 billion, 0.64 billion, and 2.03 billion respectively [3] - The target price has been raised to 29.26 HKD, maintaining a "buy" rating based on improved pipeline success rates [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The report highlights that the company has made significant progress in its overseas clinical trials, which enhances the probability of success for its long-term pipeline [1] - The revenue forecast for 2025 has been adjusted upwards to 0.02 billion, 0.64 billion, and 2.03 billion for the years 2025, 2026, and 2027 respectively, indicating a positive outlook [1] - The target price has been raised to 29.26 HKD, reflecting increased confidence in the company's pipeline success [1] Financial Performance Summary - Total revenue for 2023 is projected at 56.69 million, with a year-on-year growth of 4.81% [1] - The net profit attributable to the parent company is expected to be negative at (144.72) million for 2023, with a year-on-year increase of 54.04% [1] - The earnings per share (EPS) for 2025 is estimated at (0.43) HKD, with a price-to-earnings (P/E) ratio of (18.70) [1] Pipeline Development - ASC30, the company's core GLP-1 pipeline, is currently in Phase IIa clinical trials in the US, with expected top-line data release in Q4 2025 [1] - ASC47, a new THR-β target pipeline, is also in clinical trials, with data expected in Q4 2025 [1] - ASC50, an oral small molecule for psoriasis, is in Phase I clinical trials, with top-line data anticipated by the end of 2025 [1] - The company has a strong cash position of 1.58 billion at the end of H1 2025, which supports ongoing research and development [1]

Summary of the Conference Call for歌礼制药 Company Overview - **Company**: 歌礼制药 (Galephar Pharmaceuticals) - **Key Products**: ASC30, ASC47, and 地尼法司他 (Dinihufang) Industry Insights - **Market Segment**: GLP-1 market and acne treatment market - **Competitive Landscape**: Intense competition in the GLP-1 sector with notable players like 礼来 (Eli Lilly) and 辉瑞 (Pfizer) Key Points and Arguments ASC30 (GLP-1 Small Molecule Drug) - ASC30 is a small molecule GLP-1 drug with both injection and oral formulations, featuring a half-life of 25 days, which is longer than competitors, enhancing its efficacy and safety [2][6] - Early clinical trials show significant weight loss effects, with a maximum dose group achieving a 6.5% weight reduction in 28 days, indicating strong market competitiveness [2][8] - The drug's pharmacological properties are superior to those of similar products, with better activation of targets at lower concentrations [6] ASC47 (THR Beta Agonist) - ASC47 is the only drug in development globally targeting the THR beta receptor for muscle gain and fat loss, showing promising preclinical results in muscle protection and fat reduction [2][11] - The unique technology applied to ASC47 allows it to target fat cells effectively, which is a significant advantage over existing treatments [11] Dinihufang (Acne Treatment) - Dinihufang has shown a 20% reduction in skin lesions in phase III clinical trials, outperforming current topical treatments [12] - The oral formulation offers convenience and maintains good safety profiles, expected to apply for market approval in 2025, potentially generating substantial revenue [12] Competitive Advantages - The choice to develop small molecule GLP-1 drugs is aimed at differentiation, leveraging advantages such as easier scalability, stable storage, and dual formulation options [7] - ASC30's early clinical data positions it favorably against competitors, with expectations for strong topline data in late 2025 [9] Risks and Considerations - The GLP-1 pipeline faces significant competition, and there is a risk of revenues falling short of expectations, necessitating caution from investors [4][13] - The overall timeline for monetization is lengthy, which may affect long-term investment returns [4][13] Market Outlook - ASC30 is anticipated to become a key player in the market, with its unique design and dual formulation likely to drive significant revenue as clinical trials progress [8] - The combination of GLP-1 weight loss and self-developed oral muscle gain inhibitors is expected to enhance business development prospects [9] Additional Noteworthy Information - The early-stage small molecule oral drug 白芥 17 has attracted attention from multinational companies, indicating its potential in the market [5]

Investment Rating - The report does not explicitly state an investment rating for the pharmaceutical and biotechnology industry, but it indicates a positive outlook on the innovation drug sector, particularly regarding the international expansion of domestic innovative drugs [3][4]. Core Insights - The report highlights the continuous rise in the enthusiasm for innovative drugs going overseas, with significant collaborations such as the $9 billion partnership between Bristol-Myers Squibb and BioNTech for the development of a PD-L1/VEGF dual antibody [3][4]. - It notes that the domestic innovative drug pipeline is becoming increasingly competitive on a global scale, with a long-term positive outlook for the internationalization of innovative drugs [3][4]. - The report also discusses the recent peak of COVID-19 cases in China, with a positivity rate of 23.8% reported at the end of May, indicating a need for continued monitoring [3][4]. Market Weekly Review - The pharmaceutical and biotechnology sector rose by 1.13% from June 3 to June 6, underperforming compared to the Wind All A index, which increased by 1.61% [9][10]. - Among sub-sectors, raw materials and blood products both saw a rise of 2.89%, while in vitro diagnostics increased by 2% [10]. - Notable stock performances included Yiming Pharmaceutical with a 33.1% increase, while *ST Longjin experienced a significant decline of 36.3% [12]. Industry News and Key Company Announcements - Significant events include the presentation of clinical data for IBI363 by Innovent Biologics at the ASCO conference, showing promising efficacy in treating advanced non-small cell lung cancer [12][13]. - Stone Pharmaceutical received approval for its adenosylcobalamin capsules, expanding its product line in the blood and nervous system treatment areas [13]. - CanSino Biologics announced the approval of a new indication for its PD-1/CTLA-4 inhibitor, filling a gap in the treatment of cervical cancer in China [13]. - The report also mentions various other approvals and collaborations among companies, indicating a vibrant and active industry landscape [13][14].

Investment Rating - The report does not explicitly state an investment rating for the pharmaceutical and biotechnology industry, but it indicates a positive outlook on the global competitiveness of domestic innovative drugs and the trend of innovative drugs going abroad [3][4]. Core Viewpoints - The innovative drug sector is experiencing a surge in overseas collaboration, highlighted by the partnership between Bristol-Myers Squibb and BioNTech to jointly develop a PD-L1/VEGF dual antibody with a total package worth $9 billion [3][4]. - The report notes that the recent ASCO conference showcased significant advancements in dual antibodies and ADCs, indicating a differentiated layout in early clinical stages for domestic innovative drugs [3][4]. - The report mentions a peak in the current COVID-19 wave, with a positivity rate of 23.8% reported at the end of May, which is higher than the entire year of 2024, although it has started to decline slightly [3][4]. Weekly Market Review - The pharmaceutical and biotechnology sector rose by 1.13% from June 3 to June 6, underperforming the Wind All A index, which increased by 1.61% [9][10]. - Among sub-sectors, raw materials and blood products both increased by 2.89%, while in vitro diagnostics rose by 2% [9][10]. - Notable stock performances included Yiming Pharmaceutical with a rise of 33.1%, Wanbangde at 32.6%, and Anglikang at 30.3%, while *ST Longjin fell by 36.3%, Huason Pharmaceutical by 12.4%, and Maipu Medical by 9.3% [12][10]. Industry News and Key Company Announcements - On June 4, Innovent Biologics reported promising Phase I clinical data for IBI363 in treating advanced non-small cell lung cancer at the ASCO annual meeting [12][13]. - On June 6, CSPC announced that its adenosylcobalamin capsules received drug registration approval from the National Medical Products Administration [13][14]. - On June 5, CanSino Biologics announced the approval of a new indication for its PD-1/CTLA-4 inhibitor in first-line treatment for cervical cancer [13][14]. - On June 2, Bristol-Myers Squibb and BioNTech announced a collaboration to develop the PD-L1/VEGF dual antibody BNT327, with a significant financial commitment involved [13][14].

Core Viewpoint - The announcement from Gilead Sciences-B (01672) highlights the successful completion of a Phase III clinical trial for the first-in-class oral small molecule fatty acid synthase (FASN) inhibitor, denifasirt (ASC40), for the treatment of moderate to severe acne, achieving all primary, key secondary, and secondary endpoints [1][6]. Group 1: Clinical Trial Results - The Phase III trial was a randomized, double-blind, placebo-controlled, multi-center study conducted in China, involving 480 patients with moderate to severe acne [1]. - The primary endpoint of treatment success was defined as a decrease of at least 2 points in the Investigator's Global Assessment (IGA) score from baseline at week 12, with a treatment success rate of 33.2% in the denifasirt group compared to 14.6% in the placebo group (p < 0.0001) [2][7]. - Key secondary endpoints showed a 57.4% reduction in total lesion count and a 63.5% reduction in inflammatory lesion count in the denifasirt group compared to 35.4% and 43.2% in the placebo group, respectively (p < 0.0001) [2][7]. Group 2: Safety and Tolerability - Denifasirt demonstrated good safety and tolerability over the 12-week treatment period, with treatment-emergent adverse events (TEAEs) occurring at rates not exceeding 10% [3]. - The only TEAEs exceeding 5% were dry skin (6.3% in the denifasirt group) and dry eye (5.9% in the denifasirt group), with all reported adverse events being mild or moderate [3]. Group 3: Mechanism of Action - Denifasirt's mechanism of action involves inhibiting de novo lipogenesis (DNL) in sebocytes, directly reducing sebum production, and suppressing inflammation through decreased cytokine secretion and Th17 differentiation [3][6]. Group 4: Competitive Advantage - Denifasirt is positioned as a promising treatment option due to its significant efficacy, high patient compliance, and favorable safety profile, with no reported severe adverse events such as hepatotoxicity or antibiotic resistance [5]. - Compared to other common oral and topical acne medications, denifasirt showed superior efficacy, with treatment success rates and lesion count reductions significantly higher than those of sarecycline, doxycycline, and clascoterone [4][9].