China healthcare sector:Shanghai company visits takeaways

Manufacturing capacity ready for CDMO business. The manufacturing facilitycurrently operates five antibody production lines with a total annual capacity ofover 8,000 liters. Six new antibody production lines with a total annual capacityof 30,000 liters are currently under trial run and the total capacity will reach38,000 liters. The Company would reserve 23,000 liters for Yisaipu and pipelineproducts and we believe the remaining 15,000 liters would mainly for contractdevelopment and manufacturing organization (CDMO) business. Managementbelieves its solid track record and experience in commercializing products likeYisaipu would be its core strength over other CDMOs. For the acquisition ofCDMO business of Therapure Biopharma, Management expects the deal to becompleted by the end of 2017.

    Management keeping sales growth targets. For existing products, with theinclusion into the new National Reimbursement Drug List (NRDL), Managementis targeting 20-25% revenue growth rate for TPIAO and Yisaipu for 2018 amidmild ASP pressure expected. For EPIAO, ASP pressure of 5 -10% is expected as itmay be hit by secondary price negotiation. As such, Management only target midsingledigit growth for rhEPO (EPIAO and SEPO together) business.

    Byetta target to enter more Provincial Reimbursement Drug List (PRDL)and Bydureon expected to receive approval in 1Q18. While competitorVictoza (liraglutide) has been included in the latest NRDL, Byetta was notincluded. Management pointed out that Byetta has been included in the PRDL of9 provinces and the Company is targeting the product to be included in 15provinces, and finally, to be included in the NRDL. Meanwhile, Managementexpects the long acting version, Bydureon, would get approval in 1Q18 and addmomentum to the growth of the product line.

    Audit results for trastuzumab expected in 1Q18. The Company has appointeda third-party clinical study audit firm to perform an audit of all the clinical sitesand the 341 patients’ clinical data. The audit results are expected to be out in1Q18 and by then, the Company will decide if the data is enough for resubmittinga NDA to the CFDA for the product.