Group 1 - The core point of the article is that Diligent Pharma's lung cancer targeted drug, Shuwotai (Shuwotai tablets), has been included in the NCCN guidelines, making it the only small molecule targeted drug for EGFR Exon20ins non-small cell lung cancer globally [1][3][4] - Shuwotai has received FDA approval for use in adult patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) who have disease progression after platinum-based chemotherapy [3][4] - The market for EGFR exon20ins patients is estimated to be no less than $2 billion, as they account for approximately 10% of non-small cell lung cancer cases [2][6] Group 2 - Following the withdrawal of Takeda's Mobocertinib from the market, Diligent Pharma will compete directly with Johnson & Johnson in the EGFR exon20ins market [5][6] - Diligent Pharma's stock price has increased significantly, rising from 58.94 yuan per share on July 2 to 76.41 yuan per share on July 30, following the approval of Shuwotai [4] - The company is currently conducting a global multi-center Phase III confirmatory trial (WU-KONG28) to push Shuwotai towards first-line treatment, with breakthrough therapy designation obtained in both China and the U.S. for first-line indications [7]

Core Viewpoint - The recent approval of multiple innovative drugs in China and favorable policies have led to a surge in interest in the Hong Kong innovative drug sector, with several ETFs in the pharmaceutical space seeing gains of over 40% this year [1][2]. Company Overview - He Mei Pharmaceutical Co., Ltd. (referred to as "He Mei Pharmaceutical") has submitted an IPO application to the Hong Kong Stock Exchange, with a post-investment valuation of 3.9 billion RMB after completing six rounds of financing [1][2]. - The company, founded in 2002, focuses on developing small molecule drugs for autoimmune diseases and tumors, with a strong position in the development of treatments for psoriasis, Behçet's disease, and inflammatory bowel disease [1][2]. Financial Performance - As of the latest financial report, He Mei Pharmaceutical has not yet achieved profitability, with projected revenues of approximately 4.05 million RMB and 5.298 million RMB for 2023 and 2024, respectively, primarily from government subsidies [1][2]. - The company is expected to incur losses of approximately 156 million RMB and 123 million RMB for the same periods [1]. Product Pipeline - He Mei Pharmaceutical has developed seven small molecule drug candidates targeting unmet needs in autoimmune and tumor diseases, with four candidates in Phase II, III clinical trials, or NDA stages for 12 indications as of May 21, 2025 [2][3]. - The two core products include Mufemilast, a potential first-in-class treatment for psoriasis, and Hemay022, a dual-target EGFR/HER2 inhibitor for advanced breast cancer [4][8]. Mufemilast Details - Mufemilast is a novel PDE4B inhibitor with a favorable safety profile, showing potential for treating psoriasis patients with latent tuberculosis [4][5]. - The global psoriasis drug market is projected to reach 29.621 billion USD in 2024, with a compound annual growth rate of 9.19% from 2024 to 2029 [5][6]. Competitive Landscape - Despite Mufemilast's advantages, the psoriasis treatment market is highly competitive, with numerous new drugs entering the market, posing challenges for commercial success [8][11]. - Hemay022 is currently undergoing a Phase III clinical trial for advanced ER+/HER2+ breast cancer, facing competition from existing EGFR/HER2 inhibitors [8][9]. Financial Pressure - The company anticipates significant financial pressure due to high R&D expenditures, with projected investments of 123 million RMB and 97 million RMB for 2023 and 2024, respectively [10]. - As of December 31, 2024, the company is expected to hold approximately 150 million RMB in cash and cash equivalents, indicating a tight financial situation [10]. Conclusion - Overall, while He Mei Pharmaceutical's core product for psoriasis shows rapid progress, the intense market competition and ongoing high R&D costs may hinder its ability to attract capital market interest [11].