德银中国医疗保健行业中国的血栓治疗2018010288页

2January2018HealthCareChinaHealthcareHealthCareHealthCareFITTResearchAsiaChinaHongKongIndustryChinaHealthcareDate2January2018DeutscheBankMarketsResearchThrombosistherapeuticsinChinaAnattractiveCVDmarketsegmentdrivenbyunmetmedicalneedsWithRMB44bnmarketsizein2017,thethrombosismarketenjoyedaCAGR13-17of13%vs.11%fortheCVDmarket,and9%fortheentiredrugmarket.Drivenbyincreasingincidences,recentNRDLinclusionofkeythrombosisdrugs,aswellasunmetmedicalneeds,thethrombosismarketislikelytogrowat10%CAGR17-22vs.5%fortheentiredrugmarket,reachingRMB72bnin2022byDBe.Webelievedomesticbellwethers,suchasSinoBiopharmandCSPC,arewellpositionedtocapturethegrowthwithanabundantpipelineofantiplateletsandanticoagulantgenerics.F.I.T.T.forinvestorsJackHu,Ph.D.ResearchAnalyst+852-22036208MeganXuResearchAssociate+852-22035928DeutscheBankAG/HongKongDeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Thus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.DISCLOSURESANDANALYSTCERTIFICATIONSARELOCATEDINAPPENDIX1.MCI(P)083/04/2017.THECONTENTMAYNOTBEDISTRIBUTEDINTHEPEOPLE'SREPUBLICOFCHINA(“THEPRC”)(EXCEPTINCOMPLIANCEWITHTHEAPPLICABLELAWSANDREGULATIONSOFPRC),EXCLUDINGSPECIALADMINISTRATIVEREGIONSOFHONGKONGANDMACAU.Distributedon:02/01/201814:12:13GMT7T2se3r0Ot6kwoPa2January2018HealthCareChinaHealthcareHealthCareHealthCareFITTResearchAsiaChinaHongKongIndustryChinaHealthcareDate2January2018DeutscheBankMarketsResearchThrombosistherapeuticsinChinaF.I.T.T.forinvestorsAnattractiveCVDmarketsegmentdrivenbyunmetmedicalneedsWithRMB44bnmarketsizein2017,thethrombosismarketenjoyedaCAGR13-17of13%vs.11%fortheCVDmarket,and9%fortheentiredrugmarket.Drivenbyincreasingincidences,recentNRDLinclusionofkeydrugs,aswellasunmetmedicalneeds,thethrombosismarketislikelytogrowat10%CAGR17-22vs.5%fortheentiredrugmarket,reachingRMB72bnin2022byDBe.Webelievedomesticbellwethers,suchasSBPandCSPC,arewellpositionedtocapturethegrowthwithrobustpipelineofantiplateletandanticoagulantgenerics.GrowthdrivenbythreeelementsWeanticipatethreekeyelementstodrivefuturegrowth,includinggrowingnumberofpatients,coverageexpansionundernewNRDL,andlimitedtherapeuticoptions.WeexpectreimbursementcoverageoffourmajorMNCdrugspavesthewayfortherapidramp-upofdomesticgenericsafterexpectedapprovals.Importantly,outof3majoranticoagulants(Pradaxa,XareltoandEliquis)and3antiplatelets(Plavix,BrilintaandEffient)thatwereapprovedbytheFDA,allexceptEffientwereapprovedinChina;however,only2domesticgenericsofPlavixwereapprovedamongthe6brandeddrugs.Webelievethelimitednumberofavailabletherapeuticoptionsrepresentsanattractiveset-upfordomesticplayers.Thatbeingsaid,physicianfeedbackindicatesaprolongedramp-upforincomingbrandedgenericsduetoinsufficientphysicianeducationfromMNCsfortheseNOACs.CompetitivelandscapeofthrombosismarketSinoBiopharm,CSPCandHengruihavesizableexposureWehighlightSBP,CSPC,Hengruihave5,2,3genericsofaforementionedsixkeydrugsunderlatestagedevelopment/regulatoryreview,respectively.WemodelRMB4.0bn/1.8bn/2.0bnin2022fortheentirethrombosisfranchisefromSBP/CSPC/Hengrui,respectively.WebelieveSBP'sthrombosispipelineissignificantlyunder-appreciatedbythemarket.Thrombosistherapeuticsisthelargestsub-segmentofCVD,whileCVDisthelargesttherapeuticclasswithamarketsizeofRMB124bnin2017,representing17%oftheentirehospitaldrugmarket.Duetoaforementionedreasons,MNCshavea31%marketshareofthethrombosismarketvs.25%fortheentiredrugmarket,creatingsubstantialopportunitiesforreplacementandmarketgrowth.Weexpectpriceerosionislikelytoemergeasthe3rdPlavixgenericentersthemarket.WehighlightthatthefirsttwogenericsarepricedatRMB10/8perpill,respectively,vs.RMB1.4intheUS.Asforanticoagulants,wearemorebullishonthegrowthprospectsoftheincominggenericsduetomuchlowerusageofstandardtherapywarfarinvs.globalpractice.JackHu,Ph.D.ResearchAnalyst+852-22036208MeganXuResearchAssociate+852-22035928CompaniesfeaturedSinoBiopharmaceutical(1177.HK),HKD12.22Buy2016A2017E2018EP/E(x)20.236.031.4EV/EBITDA(x)10.418.516.1Price/book(x)4.68.16.7CSPCPharma(1093.HK),HKD15.36Buy2016A2017E2018EP/E(x)20.733.325.8EV/EBITDA(x)12.721.216.7Price/book(x)4.927.886.65HengruiMedicine(600276.SS),CNY67.58Buy2016A2017E2018EP/E(x)49.260.148.5EV/EBITDA(x)39.747.637.4Price/book(x)10.3412.4210.03Source:DeutscheBankDeutscheBankAG/HongKongDeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Thus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.DISCLOSURESANDANALYSTCERTIFICATIONSARELOCATEDINAPPENDIX1.MCI(P)083/04/2017.THECONTENTMAYNOTBEDISTRIBUTEDINTHEPEOPLE'SREPUBLICOFCHINA(“THEPRC”)(EXCEPTINCOMPLIANCEWITHTHEAPPLICABLELAWSANDREGULATIONSOFPRC),EXCLUDINGSPECIALADMINISTRATIVEREGIONSOFHONGKONGANDMACAU.2January2018HealthCareChinaHealthcareTableofContentsExecutivesummaryPhysicianfeedbackValuationThematicgrowthdriversThem