Group 1 - The core point of the article is the appointment of Zhou Yunshu, a former senior executive at Heng Rui Medicine, as the president of Xiansheng Pharmaceutical Group, although the company later clarified that this information is not entirely accurate and no formal internal appointment has been made yet [1][3] - Zhou Yunshu has a long history with Heng Rui Medicine, having joined the company in 1995 and serving in various leadership roles, including general manager and chairman [4] - Zhou resigned from his positions at Heng Rui Medicine in July 2021 due to health reasons, and he was later involved in an insider trading case, resulting in a fine from the China Securities Regulatory Commission [4] Group 2 - Xiansheng Pharmaceutical is a well-established domestic pharmaceutical company focusing on areas such as neuroscience, oncology, and autoimmune diseases, and is also undergoing a transformation towards innovation [4] - In the first half of 2025, Xiansheng Pharmaceutical reported revenues of 3.585 billion yuan and a net profit attributable to shareholders of 604 million yuan, representing year-on-year growth of 15.14% and 32.20%, respectively [4] - The company's innovative drug business generated revenue of 2.776 billion yuan, a year-on-year increase of 26%, accounting for 77.4% of total revenue [4] - In 2025, Xiansheng Pharmaceutical announced three business development transactions, including licensing agreements for several drug candidates with AbbVie and other companies [5]

Company Updates - The company announced on June 20 that its new generation insomnia drug, Kewike (Dazodex), has been approved by the National Medical Products Administration for the treatment of adult insomnia characterized by difficulty in falling asleep and/or maintaining sleep, and it is not classified as a controlled substance [1] - Kewike has demonstrated excellent clinical data, addressing existing clinical pain points, and has potential as a blockbuster drug (BIC). It has been approved in 11 countries including the US, UK, Switzerland, and Hong Kong, and is the only DORA class insomnia drug approved by the European Medicines Agency to improve daytime functioning, with good safety profile and no withdrawal reactions or addiction data [1] - The company recently reached a supplemental agreement with Idorsia, agreeing to a one-time cash payment of $50 million and reducing sales milestone payments and royalty rates for Kewike, which is expected to facilitate its commercialization [1] Strategic Collaborations - The company announced a strategic collaboration with NextCure on June 16 to jointly develop SIM0505 (CDH6 ADC), granting global rights outside Greater China to NextCure. The company will receive up to $745 million in related payments during the potential development phase and tiered royalties based on net sales in the licensed regions [2] - SIM0505 utilizes the company's proprietary TOPOi payload and has shown strong anti-tumor effects in various solid tumor models during preclinical studies. It is currently undergoing Phase I clinical trials in China, with NextCure planning to initiate Phase I trials in the US in Q3 2025 [2] Clinical Development - The company completed the first patient dosing in the US for its self-developed tri-antibody SIM0500 (GPRC5D/BCMA/CD3) on June 18. This drug is developed based on the company's proprietary T-cell engaging multi-specific antibody platform and received Fast Track designation from the FDA in April 2024 [2] - A licensing option agreement was reached with AbbVie in 2025, with total milestone payments reaching $1.055 billion. The company has a rich pipeline of ADC and TCE platforms, and attention is recommended on the clinical progress of several early-stage products [2] Financial Forecast and Valuation - The company maintains its earnings forecast for 2025/2026, with the current stock price corresponding to 21.8x/19.5x P/E for 2025/2026. Considering the upward trend in sector valuations, the target price has been raised by 45.5% to HKD 12.8, corresponding to 24.9x/22.3x P/E for 2025/2026, implying a 14.1% upside potential [2]

Core Viewpoint - CICC has raised the target price of Sihuan Pharmaceutical (02096) by 45.5% to HKD 12.8, reflecting a potential upside of 14.1% based on the company's recent breakthroughs in its innovative pipeline, including the approval of a new insomnia drug and a significant licensing deal for SIM0505 [1][2]. Group 1: Recent Developments - Sihuan Pharmaceutical's new insomnia drug, Kewike (Darelisib), has been approved by the National Medical Products Administration for the treatment of adult insomnia characterized by difficulty in falling asleep and/or maintaining sleep [1]. - Kewike is the only DORA class insomnia drug approved by the European Medicines Agency that improves daytime functioning, with a good safety profile and no withdrawal symptoms reported [1]. - The company has reached a supplementary agreement with Idorsia, involving a one-time cash payment of USD 50 million to expedite the commercialization of Kewike [1]. Group 2: Licensing and Clinical Trials - Sihuan Pharmaceutical has licensed global rights for SIM0505 to NextCure, with potential payments up to USD 745 million and tiered royalties based on net sales in licensed regions [2]. - SIM0505 is currently undergoing Phase I clinical trials in China, with NextCure planning to initiate Phase I trials in the U.S. in Q3 2025 [2]. - The company’s SIM0500 (GPRC5D/BCMA/CD3 tri-antibody) has completed its first patient dosing in the U.S. Phase I trial, and it received Fast Track designation from the FDA in April 2024 [2].