The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. Application Proof of Simcere Zaiming Pharmaceutical Co., Ltd. 先聲再明醫藥股份有限公司 (A joint stock company with limited liability incorporated in ...

Core Insights - The report highlights the promising potential of GPRC5D/BCMA/CD3 tri-antibody therapy for relapsed/refractory multiple myeloma (RRMM), showcasing an overall response rate (ORR) of 100% and a 12-month progression-free survival (PFS) rate of 96.3% [4]. Market Trends - The report notes that multiple myeloma (MM) is the second most common hematological malignancy, with over 300,000 new cases globally each year. Most MM cases progress to RRMM, indicating a significant unmet medical need after standard treatments fail [4]. Industry Commentary - GPRC5D and BCMA are highly expressed on the surface of malignant plasma cells, making them attractive targets for immunotherapy in MM. The JNJ-79635322 tri-antibody is the first to enter Phase III clinical trials for RRMM, targeting BCMA, GPRC5D, and CD3 to precisely modulate immune signaling [4]. - In early clinical trials, JNJ-79635322 demonstrated superior survival benefits, with a 12-month PFS rate of 96.3% in patients who had not previously received BCMA/GPRC5D therapy. The overall response rate (ORR) for the entire population was 73% [4]. - IBI3003, another candidate, showed an ORR of 83.3% in patients who had undergone at least four prior lines of treatment, indicating its efficacy in heavily pre-treated RRMM patients [4]. Clinical Data - JNJ-79635322 exhibited an ORR of 100% in a subgroup of patients who had not received prior BCMA/GPRC5D therapy, with a median follow-up of 15 months. Adverse events included infections (80.6%) and cytokine release syndrome (CRS) [4]. - IBI3003 demonstrated an ORR of 77.8% in patients previously treated with BCMA and/or GPRC5D therapies, with a good safety profile [4].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative price increase of over 15% within the next 6 to 12 months compared to the benchmark index [11]. Core Insights - The company has demonstrated significant growth in its innovative drug business, with total revenue reaching 3.585 billion yuan in the first half of 2025, a year-on-year increase of 15.1%. Innovative drug revenue accounted for 77.4% of total revenue, reflecting a consistent upward trend over the past five years [7]. - The adjusted net profit for the first half of 2025 was 651 million yuan, up 21.1% year-on-year, with a research and development investment rate of 28.7%, an increase of 9 percentage points [7]. - The company has launched 10 innovative drugs and is focusing on three main areas: neuroscience, oncology, and autoimmune diseases, with notable revenue growth in these sectors [7]. Financial Forecast and Valuation - The company is projected to achieve revenues of 7.69 billion yuan, 9.01 billion yuan, and 10.43 billion yuan for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 16%, 17%, and 16% [5][8]. - The forecasted net profit for the same years is expected to be 1.193 billion yuan, 1.389 billion yuan, and 1.609 billion yuan, reflecting significant growth of 63% in 2025 and steady growth of 16% in the following years [5][8]. - The report highlights a projected P/E ratio decreasing from 40.5 in 2024 to 18.5 in 2027, indicating an improving valuation as earnings grow [5]. Product Pipeline and Innovation - The company is advancing its innovative product pipeline, with several products in various stages of development, including two products in NDA review and three in Phase III clinical trials [7][8]. - Key products include the unique sublingual stroke treatment and a novel insomnia drug, both of which are expected to capture significant market share due to their differentiated mechanisms and clinical evidence [7]. - The company is also actively pursuing international collaborations and licensing agreements to enhance its technological platform and expand its market reach [7][8].

Investment Rating - The report maintains a "Recommended" rating for the pharmaceutical industry [1] Core Insights - The global pharmaceutical transaction volume reached 456 deals in the first half of 2025, a 32% year-on-year increase, with total upfront payments soaring to $11.8 billion, up 136% year-on-year, and total transaction value hitting $130.4 billion, a 58% increase year-on-year. Chinese companies contributed nearly 50% of the total transaction value and over 30% of the transaction volume, indicating a growing recognition of their value in global innovative drugs [3] - The report highlights a strategic opportunity for Chinese companies in the weight loss sector, with significant clinical data and collaborations emerging. For instance, the oral GLP-1 molecule Orforglipron showed a weight reduction of 11% compared to the placebo group, providing a competitive edge for domestic firms [4] - Chinese innovative drug companies are leading breakthroughs in CAR-T technology, with significant sales figures reported. For example, the collaboration between Legend Biotech and Johnson & Johnson for Carvykti is expected to exceed $2 billion in annual sales [5] - The CXO industry is anticipated to gradually recover, with a notable increase in license-out transactions and funding for biotech companies, indicating a positive trend in order recovery [6] - The report emphasizes the continuous iteration and updates in TCE technology, with promising clinical data emerging from various trials, showcasing the potential for significant advancements in the field [7] Summary by Sections 1. Pharmaceutical Market Tracking - The pharmaceutical industry underperformed the CSI 300 index by 2.07 percentage points in the last week, ranking 31st among 31 primary industry indices [19] - In the past month, the pharmaceutical industry outperformed the CSI 300 index by 8.23 percentage points, ranking 3rd among the primary industry indices [25] 2. Pharmaceutical Sector Trends and Valuation - The pharmaceutical and biotechnology sector's index has a current PE (TTM) of 38.77, above the 5-year historical average of 31.9 [45] 3. Recent Research Achievements - The report includes various deep-dive studies on the pharmaceutical industry, highlighting trends in supply and demand, as well as the growth of specific sectors such as blood products and inhalation formulations [51] 4. Recent Industry Policies and News - Recent policies from the National Healthcare Security Administration aim to support the high-quality development of innovative drugs, including increased funding and support for clinical applications [54] - Notable industry news includes the approval of innovative treatments by major pharmaceutical companies, indicating a robust pipeline and ongoing advancements in the sector [56]

Investment Rating - The report maintains a "Recommended" investment rating for the pharmaceutical industry [1] Core Insights - The domestic new drug market is expected to continue its growth momentum, driven by the synchronization of commercial insurance and medical insurance directories, which is likely to establish a differentiated pricing mechanism for innovative drugs [3] - The focus on tri-specific antibodies (tri-Abs) is increasing, with significant developments expected in 2025, particularly in the field of solid tumors [4] - The trend towards more effective and scientifically-backed weight loss solutions is gaining traction, with GLP-1 drugs projected to generate over $50 billion in global sales in 2024 [5] - The self-immune direction in biopharmaceuticals is seeing increased business development (BD) activity, with notable collaborations and advancements in clinical trials [6] - The approval of Vuxinib (伏欣奇拜单抗) marks a new era in biological treatments for gout, with significant market potential anticipated due to the rising prevalence of hyperuricemia and gout in China [7] Summary by Sections 1. Pharmaceutical Market Tracking - The pharmaceutical industry outperformed the CSI 300 index by 1.00 percentage points in the last week, with a weekly increase of 1.82% [18] - Over the past month, the pharmaceutical sector lagged behind the CSI 300 index by 1.36 percentage points, with a monthly increase of 1.73% [21] 2. Pharmaceutical Sector Trends and Valuation - The pharmaceutical sector's recent performance shows a 1.73% increase over the last month, underperforming the CSI 300 index [34] - The current price-to-earnings ratio (PE) for the pharmaceutical index is 35.79, above the five-year historical average of 32.22 [37] 3. Recent Research Achievements - The research team has published several in-depth reports highlighting trends in the pharmaceutical industry, including the growth of blood products and the impact of policies on inhalation formulations [41] 4. Recent Industry Policies and News - The National Healthcare Security Administration released measures to support the high-quality development of innovative drugs, enhancing their market access and payment capabilities [43] - Recent collaborations and licensing agreements among major pharmaceutical companies indicate a robust trend in the industry, with significant advancements in clinical trials and product approvals [44][46]

Core Insights - Taiping Medical Health Fund has completed an investment in Hainan Xiansheng Zaiming Pharmaceutical Co., Ltd., a subsidiary of Xiansheng Pharmaceutical Group, which is a leading domestic pharmaceutical company focused on innovative anti-tumor drugs [1] - The investment aims to enhance Xiansheng Zaiming's innovative capabilities and support its participation in international competition and collaboration in tumor immunotherapy [1] - Xiansheng Zaiming has developed several advanced research and development platforms, including protein engineering, T cell engagers, NK cell engagers, ADCs, PROTACs, and AI-assisted molecular design [1] Company Developments - Xiansheng Zaiming has achieved compliance with GMP standards in both China and the United States for its independent production capabilities [1] - The company has four core innovative drugs, namely Kexaila®, Envida®, Endu®, and Enlitai®, which are already commercialized and cover various solid tumor treatments [1] - Kexaila® and Enlitai® are expected to enter the national medical insurance catalog in 2024, following Endu® [1] Strategic Partnerships - Following the investment, Xiansheng Zaiming announced a strategic partnership with Next Cure, Inc. to co-develop a new ADC drug, SIM0505, targeting the CDH6 antigen for solid tumor treatment [3] - The potential development phase of SIM0505 could yield up to $745 million in related payments, including upfront, development, and sales milestone payments, along with tiered royalties based on net sales outside Greater China [3] - Previously, Xiansheng Zaiming entered a licensing option agreement with AbbVie for SIM0500, a tri-specific antibody, with a total value of up to $1.055 billion [6]

Group 1 - The core agreement involves a strategic collaboration between Xiansheng Pharmaceutical's subsidiary Xiansheng Zaiming and US biopharmaceutical company NextCure for the development and commercialization of the antibody-drug conjugate (ADC) SIM0505, targeting CDH6, with a total potential payment of up to $745 million [2][5] - SIM0505 is positioned as a novel ADC with a proprietary TOPO inhibitor payload, showing strong anti-tumor effects in preclinical studies and a high systemic clearance rate, indicating potential for an expanded therapeutic window [3][4] - The collaboration includes a unique bidirectional technology partnership, allowing NextCure to utilize Xiansheng Zaiming's proprietary ADC linker and TOPO inhibitor payload for its own ADC development, while Xiansheng Zaiming retains rights for this new ADC in Greater China [4] Group 2 - The $745 million deal marks a significant milestone in Xiansheng Pharmaceutical's strategy for international expansion and highlights the successful global outreach of Chinese innovative drugs through business development (BD) models [5] - The collaboration underscores the international recognition of Chinese pharmaceutical companies' capabilities in cutting-edge technologies like ADCs, with Xiansheng Zaiming's proprietary payload being noted for its potential superior safety and efficacy compared to other topoisomerase inhibitors [5][6] - In recent years, Xiansheng Pharmaceutical has secured over $2.3 billion in potential transaction value through three overseas licensing agreements for self-developed innovative drugs, indicating a proactive shift towards globalizing Chinese original drugs [5]

Core Viewpoint - The collaboration between Xiansheng Pharmaceutical and NextCure aims to develop a novel antibody-drug conjugate (ADC) SIM0505 targeting the CDH6 antigen for solid tumors, with potential payments reaching up to $745 million [1][3]. Group 1: Collaboration Details - Xiansheng Pharmaceutical's subsidiary, Xiansheng Zaiming, will receive a maximum of $745 million in payments, including an upfront payment and milestone payments related to development and sales [1][3]. - NextCure will pay an upfront fee of $12 million, with additional payments contingent on financing events or by December 31, 2025 [3]. - Upon the initiation of the first Phase II clinical trial for SIM0505, NextCure will issue $1 million worth of common stock to Xiansheng, with the option to substitute cash [3]. Group 2: Market Context - Currently, there are no marketed drugs targeting CDH6 globally, although several companies are developing ADC products targeting this antigen, including DS-6000 and AMT-707 [3][4]. - The ADC SIM0505 is in Phase I clinical trials, with FDA approval expected in December 2024 and NMPA approval in January 2025 [4]. Group 3: Financial Implications - Xiansheng Pharmaceutical has achieved two overseas licensing agreements for self-developed innovative drugs this year, indicating a strategic shift towards external collaborations to boost revenue [4][10]. - The company has faced revenue stagnation, with total revenue remaining around 6 billion for three consecutive years, making these collaborations crucial for future growth [5][10]. - In 2024, the oncology segment generated revenue of 1.298 billion, accounting for 19.6% of total revenue, reflecting a 17.6% decline from 2023 [9].

Core Insights - The article discusses a licensing agreement between Sihuan Pharmaceutical (先声药业) and NextCure, Inc. for the innovative antibody-drug conjugate SIM0505, marking the first international recognition of Sihuan's ADC technology platform [1][2] - The agreement allows NextCure to develop SIM0505 outside Greater China, while Sihuan retains rights for a new ADC product targeting CDH6 in Greater China, indicating a strategic expansion in oncology [1][2] - Sihuan is expected to receive up to $745 million in total payments, including upfront and milestone payments, along with tiered royalties based on net sales outside Greater China [1] Company Developments - Sihuan has established a global innovation research network with centers in Boston, Shanghai, Nanjing, and Beijing, collaborating with top research institutions like Harvard Medical School [2] - The company has made significant investments in R&D, exceeding 8 billion yuan over the past five years, focusing on core technology platforms such as ADC and AI drug discovery [3] - Sihuan's innovative drug for stroke, Xianbixin injection, has been launched in China, and its sublingual tablet is undergoing clinical research in the U.S. with breakthrough therapy designation from the FDA [3] Market Position - CDH6 is identified as a promising new target for anti-tumor drugs, with no existing drugs targeting it globally, highlighting the competitive advantage of Sihuan's ADC technology [2] - The recent licensing agreement with NextCure is the second overseas licensing deal for Sihuan in 2023, following a collaboration with AbbVie for another antibody targeting GPRC5D/BCMA/CD3, which has a potential transaction value of $1.055 billion [2]

Group 1 - Kingsoft Software (03888) saw a nearly 5% drop in stock price, with Q1 revenue increasing by 9% year-on-year to 2.338 billion yuan, but net profit attributable to the parent company slightly decreased by 0.24% to 284 million yuan. Office software and services revenue grew by 6% year-on-year but fell by 13% quarter-on-quarter, while online gaming and other revenue increased by 14% year-on-year but decreased by 20% quarter-on-quarter [1] - Li Auto-W (02015) rose over 7%, reporting a 1.1% year-on-year revenue increase and a 9.4% rise in net profit for Q1. The company expects Q2 delivery volume to increase by 13.3%-17.9% year-on-year, with revenue projected to grow by 2.5%-6.7%. CEO Li Xiang expressed confidence in restoring monthly sales to 50,000 units and plans to launch the pure electric SUV i8 in July [1] - Hand Return Group (02621) debuted on the market but fell over 7% on its first day. The company is an internet-based life insurance intermediary with platforms like Xiaoyusan, Kachaba, and Niubao100, raising approximately 134 million HKD from its listing [1] - Yiming Anke-B (01541) surged over 13%, with its stock price doubling within the month. The company announced preliminary efficacy and safety data for its core product IMM2510 in treating non-small cell lung cancer (NSCLC) during I/II phase clinical trials [1] Group 2 - Meizhong Jiahe (02453) increased by over 7%, having developed a proprietary proton therapy language model successfully deployed in a Guangzhou hospital. The company plans to raise approximately 93.94 million HKD through a discounted share placement for equipment procurement, loan repayment, and working capital [2] - Gome Retail (06808) rose over 6%, with reports indicating that after a major shareholder change, the company is on track to transform its business, focusing on sales scale and absolute gross profit by FY2026. The company turned profitable in the second half of the last fiscal year, reporting a net profit of 199 million yuan, and plans to distribute 1.5 billion yuan in dividends for FY2025 [2] - Sany International (00631) saw a rise of over 4%, reporting a 14.6% year-on-year revenue increase to 5.876 billion yuan and a 23.2% rise in net profit to 635 million yuan for Q1. Growth was attributed to global expansion, digitalization, and low-carbon strategies [2] Group 3 - Dekang Agriculture (02419) surged over 8%, with analysts noting that April pig prices remained strong despite the seasonal downturn, and May's supply-demand dynamics are expected to support rising pig prices. The company is recognized for its leading breeding costs, projected to be below 13 yuan per kilogram, with an estimated 30% growth in pig output over the next three years [3] - Fubo Group (03738) increased by over 13%, completing an oversubscribed financing of over 500 million HKD for AI research and financial optimization. The company reported a total revenue increase of approximately 23% year-on-year, with mainland China revenue growing by about 21% and monthly recurring revenue (MRR) increasing by around 30% [3] - Gako Si-B (01167) rose over 8%, with a cumulative increase of over 25% this week. The company received domestic approval for its KRAS G12C inhibitor, used in specific non-small cell lung cancer treatments [3] - Fosun Pharma (02196) increased by over 6%, announcing that its self-developed new drug, Luwo Meitini tablets, has been approved for market release by the National Medical Products Administration [3] Group 4 - The smartphone supply chain stocks collectively fell, with companies like Hillstone Technology dropping over 5% and Sunny Optical, BYD Electronics, and GoerTek all declining over 3%. This decline was attributed to market concerns following the reinstatement of tariffs from the Trump administration [4] - Xiansheng Pharmaceutical (02096) rose over 8%, with five of its drugs selected for the 2025 ASCO annual meeting. The company's innovative drug BD's international expansion has garnered attention, including a deal with AbbVie worth over 1 billion USD [4] - Yika (09923) surged over 10%, following a 27% increase the previous day. The company recently obtained a payment license in Arizona, USA, with a projected nearly 5-fold increase in overseas transaction volume in 2024 [4] - Stone Pharmaceutical Group (01093) rose over 7%, with ongoing negotiations for three potential transactions involving products like EGFR-ADC, with total potential payments reaching approximately 5 billion USD, one of which is expected to be completed in June [4]