Caitong Securities: Innovation in Biopharma is the Eternal Theme, Bullish on Emerging Fields Like Small Nucleic Acids and Bispecific Antibodies

Stock News11-27

Caitong Securities released a research report stating that Chinese innovative pharmaceutical companies are transforming from participants to leading forces in global biotech transactions, leveraging their significant R&D and cost advantages. Their role has fundamentally shifted from technology importers to key exporters, with License-out becoming a critical growth driver. Meanwhile, China's biopharma industry demonstrates strong vitality in cutting-edge therapies and maintains an irreplaceable position in key supply chains, offering clear long-term investment value for related companies. Key insights from Caitong Securities include:

1. Chinese pharma firms account for ~30% of global BD transaction value. Domestic companies actively deploy in innovative drug R&D, benefiting from China’s industrial chain and talent pool, characterized by "abundant pipelines, rapid progress, high quality, and low cost." As a result, their pipelines have become a major source for overseas partners. Currently, China’s BD deals represent ~30% of global totals.

2. BD revenue is now a vital income stream for domestic innovators. While early-stage BD focused on License-in, License-out deals surged post-2021, turning local firms from buyers to suppliers. Data shows License-out’s share in China’s total BD transactions rose from 45% in 2021 to 91% in 2024, making globalization a key revenue driver.

3. Innovation centers on targets and tech pathways; small nucleic acids show promise. The small nucleic acid sector is thriving, with strong catalysts in commercialization, clinical progress, and BD. Multinationals (MNCs) remain deeply reliant on China for APIs/intermediates, ensuring sustained demand. As small nucleic acid drugs mature, MNCs will generate substantial new orders for monomers, sequences, and solvents like acetonitrile.

Investment Recommendations: - Innovative drugs/device: Focus on Furente, Anglikang, Staidson, MicroPort, Frontier Biotech, SinoMab, BaiMei, Changchun High-Tech, Mabwell, Gibel, Akeso, Deyuan Pharma, Baili, Kelun-B, Kelun Pharma, ZJ Pharma, RemeGen, Innovent, Hansoh, Lepu Bio-B, Everest, Jenkem, Sinocelltech, CStone, Shouyao, Bio-Thera, and CARsgen. - CXO/APIs: Consider WuXi AppTec, Jiuzhou Pharma, Chengda, Lianhe, Huahai, and Nuotai.

Risks: Clinical trial setbacks, slower-than-expected overseas deals, and policy uncertainties.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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