Core Viewpoint - King’s Ray Biotechnology (01548.HK) reported a net profit of $2.962 billion for the fiscal year 2024, a significant increase of 3202.19% year-on-year, marking a turnaround from losses [2] Financial Performance - The $3.2 billion one-time gain was attributed to accounting maneuvers, specifically the deconsolidation of subsidiary Legend Biotech (LEGN.NASDAQ) [3] - After excluding this gain and a $124 million fair value loss from another subsidiary, the adjusted net profit for King’s Ray's non-cell therapy business remained flat compared to 2023 [4] - The CDMO business revenue plummeted by 37.9%, while synthetic biology revenue grew by 24.6% to $53.7 million, but this only accounted for less than 10% of total revenue [4] Market Valuation - Following the deconsolidation, Legend Biotech's market valuation reached $7.8 billion on NASDAQ, while King’s Ray's market cap was only $4.7 billion, less than 60% of Legend's [5] - The valuation disparity reflects differing market perceptions of the core values of both companies, with Legend's valuation driven by the explosive growth of its product Carvykti, which achieved sales of $963 million in 2024, a 92.7% increase [5] Business Challenges - King’s Ray faces dual challenges: the ongoing deterioration of its CDMO business and growth bottlenecks in synthetic biology [9] - The CDMO business saw a 37.9% revenue decline, with operating losses widening by 46% due to low capacity utilization and high expansion costs in North America [9] - Cash flow remains a concern, with operating cash flow netting only $75.6 million, representing just 2.55% of net profit, indicating significant short-term debt repayment pressure [9] Future Outlook - The resolution of the valuation dilemma for King’s Ray and Legend Biotech hinges on capacity expansion and pipeline progress [11] - Legend Biotech's collaboration with Johnson & Johnson aims to achieve an annual production capacity of 10,000 doses by the end of 2025, which could support the growth of Carvykti in secondary markets [11] - King’s Ray must balance capital operations and business transformation, potentially through share divestment to improve cash flow while focusing on high-growth sectors like synthetic biology [12]

Core Insights - The Chinese pharmaceutical industry has made significant advancements in innovative drug development over the past decade, driven by supportive policies and reforms [1] - Currently, domestic pharmaceutical companies are reassessing strategies and exploring new business models due to challenges such as declining drug prices, financing difficulties, and geopolitical risks [1] - Global pharmaceutical giants are experiencing a performance divide, with companies like Merck, AstraZeneca, and Novartis showing resilience through innovative products, while others like Bristol-Myers Squibb and Roche face short-term challenges due to declining revenues from mature products [1][4] Industry Trends - The first quarter of 2025 is referred to as the "patent cliff year," where major drugs face generic competition, prompting companies to adopt diversification strategies to mitigate impacts [2][5] - Innovation in oncology, autoimmune, and neurological disease sectors remains crucial for growth, with companies needing to maintain rapid innovation and flexible localization strategies [2] - The global pharmaceutical market is projected to grow significantly, with spending expected to reach approximately $2.2 trillion by 2028, driven by increased drug usage, new product launches, and the rise of biosimilars [12] Company Performance - Bristol-Myers Squibb reported total revenue of $11.2 billion in Q1 2025, a 6% decline year-over-year, with growth products contributing $5.6 billion, while mature products saw a 20% revenue drop [4] - Roche's total revenue for Q1 2025 was approximately $18.5 billion, with a 6% year-over-year increase, driven by strong sales of innovative drugs, although the Chinese market faced a 23% decline [6][7] - Johnson & Johnson's Q1 2025 revenue reached $21.89 billion, a 2.4% increase, with significant contributions from CAR-T therapy Carvykti, which saw a 135% increase in sales [8] Strategic Adjustments - Companies are increasingly focusing on innovation and strategic partnerships to navigate market challenges, with many adopting dual strategies that combine internal R&D with external collaborations [15][16] - The need for cost control and operational optimization is evident, as companies like Roche and Bristol-Myers Squibb implement restructuring measures to adapt to market pressures [7][4] - The pharmaceutical industry is witnessing a shift towards differentiated value propositions and breakthrough innovations, with companies leveraging acquisitions and partnerships to enhance their market positions [11][15]

Investment Rating - The report maintains a "Recommended" rating for the pharmaceutical industry [2][11]. Core Insights - New technology platforms are increasingly favored by multinational corporations (MNCs), leading to earlier collaboration opportunities. A notable example is the global strategic partnership between Heptares Therapeutics and AstraZeneca, which includes a $105 million equity investment [3]. - The weight loss market is seeing multiple business developments (BD) materialize, with significant sales growth reported by Novo Nordisk and Eli Lilly. Novo Nordisk's core products generated approximately $27.94 billion in sales, while Eli Lilly's tirzepatide saw a 124% year-on-year increase in sales to $11.54 billion [5]. - Progress in universal CAR-T and solid tumor cell therapies is ongoing, with global CAR-T sales projected at approximately $4.53 billion in 2024. Chinese companies are also participating in this market, with three domestic CAR-T products approved for sale [6]. - The CRO (Contract Research Organization) environment may experience changes, with potential supply flexibility due to the easing of U.S. bioterrorism law concerns. This could enhance the competitiveness of Chinese CROs [7]. - The active pharmaceutical ingredient (API) sector is exploring new applications, particularly in the nicotine tobacco production sector, leveraging synthetic biology technologies [8]. - Major hospitals are launching specialized AI models, indicating a rising trend in the integration of AI in healthcare, with collaborations between tech companies and healthcare providers [10]. Summary by Sections 1. Pharmaceutical Market Tracking - The pharmaceutical industry outperformed the CSI 300 index by 0.88 percentage points over the past week, ranking 20th among 31 primary industry indices [20]. 2. Pharmaceutical Sector Trends and Valuation - The pharmaceutical sector's index has a current PE (TTM) of 30.95, which is below the five-year historical average of 32.98 [36]. 3. Recent Research Achievements - The research team has published several in-depth reports on various pharmaceutical sectors, highlighting trends such as the growth of blood products and the impact of policy support on inhalation drug industries [40]. 4. Important Industry Policies and News - Recent policy changes include the National Medical Products Administration's (NMPA) decision to abolish certain medical device standards to optimize the regulatory framework [42]. - Significant industry news includes the approval of several new drug applications and clinical trials by the NMPA, indicating a robust pipeline for pharmaceutical innovation [44][46].

证 券 研 究 报 告 行业周报 国产GLP-1出海值得期待 医药行业周报 | 投资评级： | 推荐 （维持） | | --- | --- | | 报告日期： | 2025年03月16日 | 分析师：胡博新 SAC编号：S1050522120002 分析师：吴景欢 SAC编号：S1050523070004 医 药 行 业 观 点 1 . 2025年创新药对外授权持续火热，中国企业出海迎来收获期 2025年全球新药BD依然保持火热，据DealForma数据显示，2024年约31%的大型跨国药企引进的创新药候选分子来自中国， 2025年1~2月中国创新药BD项目已达16项，并且合作的领域也从肿瘤等热门方向延伸至自免等新方向。NewCo等新模式也 获得了海外资金的支持，中国企业也积极尝试。虽然全球创新药医药并购交易在下降，但中国医药创新药的并购却持续活 跃，对外授权数量保持持续增长，一方面中国创新药研发持续迭代，持续高效补充研发梯队，为对外授权提供持续的种子。 另一方面，海外MNC并购更趋精明谨慎，但也面临中国创新药加入全球竞争的大环境，对中国创新药的项目保持持续的关 注。目前与中国企业合作的项目以临床早期品种为主 ...