Summary of 康哲药业 Conference Call Company Overview - 康哲药业 is undergoing a strategic transformation from original research drugs to innovative drugs, driven by both collaborative development and independent research. The company has received approval for 5 innovative drugs covering 6 indications and is actively expanding internationally, including a secondary listing in Singapore without involving financing or equity dilution [2][4]. Key Business Segments - The company operates four main business segments: - Cardiovascular and Digestive Health: Stabilized after the impact of the National Volume-Based Procurement (VBP) - Ophthalmology: Strong profitability - Skin Health: 德美医药 is set for a spin-off listing - International Business: Focused on Southeast Asia, expected to contribute to future growth [2][5]. Financial Performance - The core products' revenue has declined due to VBP, with projected revenue of 2.6 billion yuan for three core products in 2024. However, the impact of centralized procurement is expected to be cleared, leading to a phase of rapid growth as innovative drugs are approved [2][7]. - The company’s key product portfolio includes: - Existing national procurement products (波依定, 黛力新, 优思弗) expected to contribute 2.6 billion yuan in 2024 - Exclusive and brand drugs anticipated to maintain around 10% growth [8]. Innovative Product Pipeline - 康哲药业 has nearly 20 self-researched projects, with 5-6 in clinical development. Key upcoming products include: - Y3 injection for stroke treatment, expected to exceed 3 billion yuan in sales - ABP671 for hyperuricemia, with NDA submission expected in mid-2025 - 德西度司他片 for chronic kidney disease anemia, expected to be approved this year [3][10][12][13]. Impact of VBP - The company faced significant impacts from VBP, with core products previously accounting for over 50% of sales. The sales retention rate post-VBP was around 50% [6][7]. Spin-off of 德美医药 - The spin-off of 德美医药 is expected to be completed by the end of 2025, which will not significantly affect 康哲药业's overall financial status but will help improve its valuation. 康哲 will distribute 90.8% of 德美 shares to shareholders [3][15]. Market Expansion and Internationalization - 康哲药业 is expanding into Southeast Asia, establishing a regional headquarters in Singapore and planning a secondary listing. This move aims to explore new growth avenues without limiting business development [20][21]. R&D and Sales Expenses - In 2025, 康哲's R&D and sales expenses are expected to rise due to high costs associated with marketing and brand building for newly launched innovative drugs. Profit growth is anticipated to lag behind revenue growth this year, but significant profit increases are expected starting in 2026 as 德美 is no longer consolidated [22][23]. Conclusion - 康哲药业 is positioned for growth through its innovative drug pipeline and international expansion, despite facing challenges from VBP. The upcoming spin-off of 德美医药 and the focus on Southeast Asian markets are strategic moves to enhance overall company valuation and market presence.

Investment Rating - The report maintains an "Outperform" rating for the industry [7]. Core Insights - The report highlights a significant market opportunity in the gout treatment sector, with innovative drugs expected to generate over 30 billion in market space [4]. - The report emphasizes the large patient population suffering from high uric acid and gout, with existing medications having various deficiencies [4][25]. - The report suggests focusing on companies like Yipin Hong and Heng Rui Pharmaceutical, which are leading in the development of innovative gout treatments [4][5]. Summary by Sections 1. Industry Investment Strategy and Recommended Focus - The recommended focus for the week showed a performance that lagged behind the pharmaceutical index by 1.2 points but outperformed the broader market by 1.3 points [13]. 2. Gout Specialty: Potential for Innovative Drug Blockbusters 2.1. Patient Population and Existing Drug Deficiencies - The prevalence of high uric acid blood syndrome in China is approximately 13.3%, affecting around 177 million people, while gout affects about 14.66 million [25]. - Current treatments for gout and high uric acid have significant safety and efficacy issues, creating a substantial unmet need for effective medications [28]. 2.2. Innovative Drug Pipeline for Gout - The report identifies URAT1 as the primary target for new drug development, with Heng Rui leading domestically and Yipin Hong leading internationally [29]. - The report details that the majority of drugs in clinical development focus on URAT1, with promising candidates like Yipin Hong's AR882 showing superior efficacy in lowering uric acid levels [31]. 2.3. Efficacy of AR882 - Clinical trials indicate that AR882 significantly lowers serum uric acid levels, with 89% of patients achieving target levels after 12 weeks of treatment [34][39]. - The drug demonstrates a favorable safety profile, with only mild to moderate adverse events reported [38][47]. 3. Pharmaceutical Sector Weekly Market Review and Hotspot Tracking - The pharmaceutical sector showed strong performance, with the CITIC Pharmaceutical Index rising by 1.2%, outperforming the CSI 300 Index by 2.5 percentage points [3]. - The report notes that the market's focus on the pharmaceutical sector has increased significantly, driven by ongoing policy support for innovative drugs and domestic procurement optimization [5].