Summary of Hengrui Pharmaceuticals Conference Call Company Overview - **Company**: Hengrui Pharmaceuticals - **Industry**: Pharmaceuticals - **Market Cap**: RMB 474.9 billion - **Ticker**: 600276 CH - **Current Price**: RMB 71.55 - **Price Target**: RMB 86.00 (+20% upside) [7][10] Key Takeaways 1. Global Strategy and Partnerships - Hengrui's ex-China strategy aims to maximize asset value through out-licensing and equity-linked NewCo structures, exemplified by the collaboration with GSK, which includes multi-asset components and a 30% equity stake in NewCo [2][19] - The company is leveraging partnerships with multinational corporations (MNCs) like GSK and Merck to enhance its global reach while maintaining control over development and commercialization [2][21] 2. Pipeline Development - Hengrui is focusing on core therapeutic areas: oncology, metabolic/cardiovascular, immunology/respiratory, and neurology, with significant emphasis on metabolic innovation [3][25] - Key programs include dual and triple agonists, oral GLP-1 small molecules, and injectable peptides aimed at treating obesity and diabetes [3][22] 3. Financial Performance and Business Development - In 2025, Hengrui executed high-value business development deals, generating RMB 2 billion in income in the first half, leading to a margin expansion to 86.6% [4][10] - The company targets a 25% CAGR for innovative drugs over three years, showcasing disciplined capital allocation and strategic optionality [4][10] 4. Market Dynamics in China - China's evolving market, supported by government incentives and emerging commercial insurance models, is expected to drive growth and expand access to innovative therapies [5][27] - Hengrui anticipates sustained margin expansion as its portfolio transitions from generics to innovative products, particularly in obesity and cardiovascular markets [5][30] 5. Competitive Positioning - Hengrui is positioned to compete effectively in the Lp(a) and cardiovascular markets, with a small molecule program that is less than a year behind competitors like Lilly [23][30] - The company is exploring both primary and secondary prevention strategies in cardiovascular health, which could provide earlier market entry opportunities [23][30] 6. Regulatory Advantages - Hengrui plans to leverage China's regulatory advantages to accelerate clinical trial timelines, ensuring consistency across multi-regional trials [24][30] - The company is focused on meeting global regulatory standards while addressing ethnic diversity requirements [24][30] 7. Long-Term Growth and Margins - Hengrui expects profit margins to improve as its pipeline shifts towards innovative drugs, which typically carry higher margins [30][10] - The company is diversifying across therapeutic areas to address significant unmet medical needs both domestically and globally [26][30] 8. Risks and Challenges - Potential risks include GPO/NRDL negotiation challenges, R&D risks, and intensified market competition [33][10] - The company is also navigating the complexities of commercial insurance in China, which currently has limited penetration but is expected to grow over the next decade [27][30] Conclusion Hengrui Pharmaceuticals is strategically positioned for growth through innovative drug development, global partnerships, and leveraging regulatory advantages in China. The company's focus on high-value business development and a diversified pipeline across key therapeutic areas supports its long-term profitability and competitive resilience in the biopharma landscape.

Core Viewpoint - Piramal Pharma is positioned for growth with its diverse CDMO capabilities and stable generics segment, despite facing challenges related to biotech funding and regulatory outcomes [1][2][3] Group 1: CDMO Segment - Piramal Pharma's CDMO arm covers the entire spectrum from discovery to commercial supply, focusing on ADCs, HPAPIs, peptides, and sterile injectables [1] - The growth of the CDMO platform is sensitive to biotech funding and approval timelines, as well as regulatory outcomes across multiple jurisdictions [1] - There is a risk of compressed Return on Capital Employed (RoCE) if large capital expenditures in the US and UK do not progress as planned [1] Group 2: Complex Hospital Generics - The complex hospital generics (CHG) segment provides stable margins and predictable cash flow, primarily driven by inhalation anesthetics like Sevoflurane and specialized injectables [2] - This segment is crucial for cash generation and offers resilience against the more variable CDMO cycle [2] Group 3: Consumer Health Segment - The Piramal Consumer Health (PCH) segment leverages strong brand recognition and distribution channels to ensure steady cash flow [2] - There are opportunities for premiumization and expansion into digital and over-the-counter markets within this segment [2] Group 4: Financial Overview - Coverage on Piramal Pharma is initiated with an Add rating and a target price of ₹276, based on a 24.6x EV/EBITDA multiple applied to the projected FY27 EBITDA of ₹1,749 crore [3] - The valuation is adjusted for net debt of ₹4,625 crore [3]