JP摩根中国医疗保健行业中国医疗保健PD1与PDL1行业201953109页

AsiaPacificEquityResearch03May2019ChinaHealthcareSectorBiotech101:China’sPD1/PD-L1SectorHealthcareLingWangAC(852)[e-mail]eonChik,CFA(852)[e-mail](852)[e-mail](852)[e-mail](852)[e-mail],CFA(852)[e-mail](AsiaPacific)LimitedSeepage105foranalystcertificationandimportantdisclosures,includingnon-USanalystdisclosures.J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.’sPharmaceuticalindustry,webelieveearlysignsofashiftfromvolume-driventoinnovation-drivengrowthareemerging.Weexpectthistrendtointensify,drivenbyfavorableregulatorypoliciesandimprovedpatientaccesstoinnovativedrugs.Webelieveleadingthiswaveisthemarketforbiologicsoncologytreatment/theemergingPD-1/PD-L1monoclonalantibody(mAB)market.Weseethisspacegrowing28%p.atoRmb79.9bn(orUS$11.6bn)revenuesby2030;bigenoughformultiplewinnersridingthiswave.Weexpandourcoverageofthebiologicsspace;initiatingcoverageonShanghaiJunshi(OW,HK$37)andCStone(OW,HK$18)andassumingcoverageonBeiGene(OW,HK$93(H)US$155(N))andInnovent(OW,HK$33).Allhaveintegratedplatformsandbroadpipeline,whichwethinkarekeystosuccess.FastgrowingChinabiologicsmarketofferssignificantopportunities.TheChinabiologicsmarketisatanearlystage.Eightofthetop10drugsintheUSAareBiologics,versustwoinChina.Withthemarket(excl.TCM)stilldominatedbygenericproducts,weexpectstronggrowthforthebiologicsmarketdrivenbyasupportiveregulatoryenvironment,improvedreimbursement,andincreasingdemandfornoveldrugs,includingbiologicsandtargetedtherapies.StronggrowthexpectedforChina’sPD-1/PD-L1mABmarket.TheglobalPD-1/PD-L1mABmarkethasgrownrapidlysincethelaunchofthefirstPD-1inhibitorin2014(US$10bnrevenuesin2018);whileChina'sPD-1/PD-L1mABmarkethasjustbeguntoemerge.WeprojecttheChina’sPD-1/PD-L1markettoreachRmb79.9bn(orUS$11.6bn)revenueby2030,a28%CAGR.Longerrun,weexpectdomesticplayerstodominatemarketsharegiventheirpricingadvantageover(MNCs)andincreasedclinicaldata.OpportunitytobuyintoPioneersearly:BeiGene,CStone,InnoventandShanghaiJunshiaretopplayersinthespace.WeviewthesestocksascompellingopportunitiestoaccessthefastgrowingChinabiologicsmarket.ThePD-1/PD-L1mABsofthesefourcompaniesareexpectedtobeamongthefirstfivetobeintroducedtothemarketamongthedomesticplayers.Weprojectthecombinedmarketshareofthetop5companies(includingHengrui's(OW,coveredbyLeonChik)PD-1mAB)atpeaktobeover50%amongthedomesticplayers.Thesecompaniesalsohavestrongdrugdevelopmentplatformforsustainedgrowthandfutureinnovations.Investmentrisks.Ahighgrowthrapidlyevolvingsector,likeChinabiotechnology,comeswithuncertainties.Intheintermediateterm,webelieveexecutionrisks,clinical,regulatoryandmarketingrisks/pricingpressurearekeyrisks.Thespaceisalsointheearlystageofcommercialization.Newsratherthanearningsisthestockdriver,downsiderisksaredevelopmentsetbackspotentiallyexacerbatedwithoutanearningscushion.ChinaBiotechCoverageNameTickerRecPTBeiGene(HK)6160HKOWHK$93BeiGene(US)BGNEOWUS$155CStone2616HKOWHK$18Innovent1801HKOWHK$33Junshi1877HKOWHK$37Source:Bloomberg,J.P.Morganestimates2AsiaPacificEquityResearch03May2019LingWang(852)[e-mail]iveSummary.................................................................3FourrecentHongKongBiotechIPOs–howdotheystandamongtheinternationalpeers................................................6OverviewofChinaoncologymarket.......................................8Chinabiologicsmarket............................................................8BiopharmaceuticalmarketinChinaisstillatanearlystageandexpectstohavestronggrowth..........................................................................................................9StrongindustrytailwindforthebiotechnologyindustryinChina...........................10PD-1andPD-L1mAbsmarketoverview...............................12Mechanismofaction.............................................................................................12KeycharacteristicsofPD-1/PD-L1therapy...........................................................12Anti-PD-1andPD-L1mAbsareexpectedtobecomebackbonetherapyforcancertreatment...............................................................................................................14GlobalantiPD-1/PD-L1marketlandscape.............................................................14CompetitivelandscapeinPD-1/PD-L1mABmarketinChina................................14Clinicaltrialsunderdevelopmentforlargeindications...........................................15ProjectionsofPD-1/PD-L1marketsizeinChina...................................................16Investmentrisks........................