Phillip Securities Group
Please note that the Day Light Saving of Europe and US will be effective on April 1st and March 11th respectively. The trading hours for those relevant contracts will be 1 hour earlier. Any questions, please contact us at 22776677.For details, please visit our foreign futures website or contact us at 22776677.Moreover,the spread of USD/JPY is low as one pip.Please click here for details
Research Report: Stock code:
  20-01-2017 (嚙踝蕭)    Fosun Pharma (2196.HK) - To Advance into Immune-Cell Therapy Market
  19-01-2017 (嚙罵)    Far East Consortium (35.HK) - Developer & Hospitality Service Provider in Asia Pacific
  18-01-2017 (嚙確)    DONGJIANG ENV (895.HK) - Steady Connotative Growth and Well-established Leading Position
  17-01-2017 (嚙瘦)    Harmonicare (1509.HK) - Recent Correction Provides Opportunity
  16-01-2017 (嚙瑾)    Geely (175.HK) - FY16 beat expectation, maintain buy rating
[第1頁 / 共588頁]
Fosun Pharma(2196)
  Share this article:    
Recommendation on   20-01-17 
Recommendation Accumulate
Price on Recommendation Date $ 25.150
Suggested purchase price N/A
Target Price $ 29.500
Weekly Special - 2283 TK Group
Written by: Fan Guohe( Research Analyst )
(86) 21 51699400-110


Fosun Pharma (2196.HK) - To Advance into Immune-Cell Therapy Market

To Advance into Immune-Cell Therapy Market

Fosun Pharma intends to make an investment equivalent to no more than USD80 million in establishing a joint venture, Kite Biotechnology, with KITE, each of which owns a 50% share, with a view to developing the cancer T cell immunotherapy market in Mainland China, Hong Kong and Macau. Kite Biotechnology will acquire KITE's commercial rights for KTE-C19 in China, as well as the pre-option to license future products (namely KITE-439 and KITE-718).

Tumor immunotherapy is the biggest breakthrough in cancer therapy in recent years, and Car-T is the most advanced technology in tumor immunotherapy. Currently, KITE, Novartis and Juno take the lead in international R&D, and KITE's KET-C19 is expected to be approved in 1H2017, making the world's first Car-T therapy product. Fosun Pharma, via domestic cooperation with KITE, will also be at the frontiers of the global immune-cell research. Moreover, KET-C19 indications cover around 160,000 patients, with a potential market size of RMB16 billion, and all three products have not satisfied clinical needs, with an estimated potential market size of more than RMB50 billion.

It is also worth mentioning that the company has secured the top 3 in domestic monoclonal antibody (McAb), and the two technological platforms, McAb and Car-T, are expected to create synergistic effects and help the company to become a benchmark in China's biological tumor treatment industry. At the same time, the company once again adopts JV model following the JV cooperation with Intuitive Surgical, proving its capability to cooperate with international top pharmaceutical companies. The model is likely to be duplicated in future expansion and support the company's international expansion.

McAb R&D Takes the Lead

At present, the rituximab and trastuzumab of Henlius are undergoing the Phase III clinical trial, and are expected to appear on the market in 2018 and 2020, respectively, and another three McAbs are in Phase I and one has obtained the clinical approval document. Rituximab US patent expires in 2018, which means the cost-effective domestic generic drugs are expected to quickly seize the lymphoma drug market, with an estimated penetration rate of 50% and a corresponding market size of approximately RMB2.3 billion. The company, following CPGJ in submitting the listing application, still takes the lead. Overall, since 2016, Henlius has significantly improved its R&D efficiency, coupled with well-established product lines and Fosun's strong sales capability, we expect Henlius to lead the domestic McAb field.

All-round Layout Supports Steady Growth

Fosun Pharma is also the second largest shareholder of Sinopharm Group, China's largest pharmaceutical distributor. It has, in the medical service sector, nearly 7,000 beds癒]including beds in construction and not been included in the consolidated financial statement癒^, coupled with agent cooperation of such medical devices as Leonardo's robot, the company has made a layout throughout the whole industrial chain of medical and healthcare industry. We expect the company to maintain an annual growth of 20%+, since the biotech layout of McAb and Car-T is expected to rapidly lift its R&D level, the acquisition of Gland Pharma in India will promote its internationalization, and China's two-vote system reform and other reforms will also increase the market share of medical distribution and service business. We grant the company an estimation of 17.5x EPS in 2017 and a target price of HKD29.5, with the "Accumulate" rating. (Closing price as at 18 Jan 2017)


Drug price drop above expectation;

Acquisition and integration below expectations;

Geopolitical risks in the expansion of overseas business.


Click Here for PDF format...

Back to Top

Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources believed to be reliable. However, we do not verify such information. We do not guarantee its accuracy or completeness, nor do we take responsibility for any loss occasioned by reliance placed upon the contents hereof. Any statements nonfactual in nature constitute only current opinions, which are subject to change. Phillip Securities (HK) Ltd (or one of its affiliates) or their officers, directors, analysts, or employees may have positions in securities or commodities referred to herein, and may, as principal or agent, buy and sell such securities or commodities. An employee, analyst, officer, or a director of Phillip Securities (HK) Ltd, or its affiliates, may serve as a director for companies mentioned in this report. Neither the information nor opinion expressed in this report shall constitute a solicitation to buy or sell any securities. There may be instances when fundamental, technical, and quantitative opinions may not be in concert. This firm (or one of its affiliates) may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any company mentioned in this report.
There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These include, for example, economic, political, currency exchange rate fluctuations, and limited availability of information on international securities. We recommend that you obtain the advice of your Financial Advisor regarding this or other investment in order to conform to your financial resources and risk preference

Copyright © 2011 Phillip Securities Group. All Rights Reserved [ Risk Disclosures Statement ] [ Terms and Conditions ] [ Personal Data Policy ]