摩根士丹利中国医疗保健行业中国医疗肺癌治疗机会很多但挑战也很多201941792页

April17,201909:[e-mail]@[e-mail]@[e-mail]@[e-mail]@[e-mail]EYASIALIMITED+YolandaHuEQUITYANALYST+8522848-5649SeanWuEQUITYANALYST+8523963-0755MORGANSTANLEY&CO.INTERNATIONALPLC+MarkDPurcellEQUITYANALYST+44207677-8557MORGANSTANLEY&CO.LLCMatthewHarrisonEQUITYANALYST+1212761-8055DavidRisingerEQUITYANALYST+1212761-6494ThomasChiu,M.D.RESEARCHASSOCIATE+1212761-3688DavidR.LewisEQUITYANALYST+1415576-2324VarunKuchibhatlaRESEARCHASSOCIATE+1212761-1189MORGANSTANLEYASIALIMITED+EthanDingRESEARCHASSOCIATE+8523963-0546ChinaHealthcareAsiaPacificIndustryViewChinaHealthcareChinaHealthcareLungCancerTreatment–PlentyofopportunitiesbutchallengesaboundWeissuethiscomprehensivelungcancerreportbasedonouranalysisofavailabletherapiesandtheresultsofourproprietaryAlphaWisesurvey.WeviewHengrui,Innovent,BeiGene,andSinobiopharmaaskeybeneficiaries,butMNCsmaystilldominatethemarketinthenearterm.Whatthisreportisabout:WiththerecentapprovalofKeytrudainChinaforfirst-linetreatmentofnon-squamousnon-smallcelllungcancer(NSCLC)andtheNationalDrugReimbursementList(NDRL)revisiontopotentiallyincludePD-1s,thisreportisintendedtohighlightmarketopportunitiesandchallenges,pricing,competitivedynamics,andstockimplications.Deepdiveintotreatmentoptions:LungcanceristhemostcommontypeofcancerinChina,andthenumberofincidencesisexpectedtogrowby3%annuallyto1.26mnin2030.Thefive-yearsurvivalrateismuchlowerthanintheUS,asmostChinesepatientsarediagnosedatalatestage.AsEGFRmutationsarefoundinabout50%ofNSCLCincidencesinChina,vs.15%intheUS,TKIsaremostcommonlyused.Meanwhile,thelaunchofthefirstPD-1inhibitorlastyearhasopenedanewchapter,andweseehugepotentialforimmuno-oncology(I/O)therapiesinChina.Pricingandreimbursementwillbekeydriversofthismarket.OurproprietaryI/OmodelforNSCLCsuggestsamarketofRmb38bnby2025:WeforecasttheI/OmarketforNSCLCtogrowata48%CAGRin2019-25,aspenetrationofI/Oexceeds50%for1L/2Lin2025andtreatmentcostsdeclineafterNDRLinclusion.Weassumelocalplayersgain75-85%sharebyvolumeand45%byrevenuewithan88%CAGR,thankstopricingadvantagesoverMNCs.KeyAlphaWisesurveytakeaways:1)I/Oisthefastest-growingsegmentinlungcancertreatment,withpotentialprescriptionsharesupto18%for1L,25%for2Land29%for3Lintwoyears,takingsharefromchemotherapies,whiletargetedtherapieswillmaintainover40%share;2)I/OisgainingastrongerpresenceinEGFR+andALK+NSCLC,duetohigherPD-L1expressionlevelsinTKI-resistantpatients,andmorecombosfortargeteddrugsandI/O.Keybeneficiaries:WeexpectOW-ratedInnoventandHengrui(ourtoppicks)aswellasBeigene(OW)andSinoBiopharma(OW)tobenefitthemostfromtheirexposuretoemergingtherapies,thankstotheirwell-developeddrugportfoliosandcandidates.Fromaglobalperspective,ourtoppicksforlungcanceropportunitiesinChinaareMerck(OW),coveredbyDavidRisinger,andRoche(OW),coveredbyMarkPurcell.MorganStanleydoesandseekstodobusinesswithcompaniescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanleyResearch.InvestorsshouldconsiderMorganStanleyResearchasonlyasinglefactorinmakingtheirinvestmentdecision.Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthememberandmaynotbesubjecttoNASD/NYSErestrictionsoncommunicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.1KeyChartsExhibit1:IncreasinglungcancerincidencesinChina7547818108378648909159389629871,0151,0451,0821,1211,1561,1911,2251,25919%20%21%22%23%02004006008001,0001,2001,4002013201520172019E2021E2023E2025E2027E2029EIncidenceIncidencerate'000Source:Frost&Sullivan,MorganStanleyResearchExhibit2:RisingnumberofNSCLCpatientsandimprovingoverall1Ltreatment3673763863964074194342672732812882963053163334353637383950%55%60%65%70%75%80%85%01002003004005006007008009002019E2020E2021E2022E2023E2024E2025EEGFR-&ALK-EGFR+ALK+1Ltreatmentrate(RHS)NewadvancedNSCLCpatients('000)Source:CICAMS,MorganStanleyResearchestimatesExhibit3:StrongpotentialforPD-(L)1sinChinathankstoacceptanceasastandardtreatmentandNDRLinclusion2.78.415.520.428.129.633.30.82.43.76.16.15.44.50.30.70.80.70.80.70.60510152025303540452019E2020E2021E2022E2023E2024E2025EPD-(L)1for1LNSCLCPD-(L)1for2LNSCLCPD-(L)1for3LNSCLCPD-(L)1marketsizeinChina(Rmbbn)Source:MorganStanleyResearchestimatesExhibit4:PricinganalysisofPD-(L)1spostNDRLinclusion020406080100120140160180JunshiInnoventKeytrudaOpdivoAnlotinib(post-NDRL)Tagrisso(post-NDRL)131114(undermemebershipprogram)130-168101-129Annualpaymentbypatients(Rmb'000)3540(2L)Pre-NDRLcostsw/oPAP:18727262147936(1L)Post-NDRLcosts:inbluebarsSource:Companydata,MorganStanleyResearchestimatesAssumptions:1)a60kgpatientforOpdivo;2)sameadministrationforJunshiandInnoventasintheirlun