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Amones, I think todays reaction is fairly predictable…..there was a big run up towards the PDUFA date and presumably the speculators on a positive result will cash up and move on to another bet. So for a few days there will be selling pressure.

The business itself is enhanced, and there is another $35m in the bank.

Takeda now has the task of selling the product, HCM will be able to bank the royalty stream.

The EU and Japan approvals can’t be far behind.

I expect this will drift lower for a short while…but the pipeline messaging is strong and there should be multiple NDAs and approvals in 24/25.

Also - Healthcare executives saying the effects of the anti-corruption drive are easing and US/China relations appear to be being nursed back to a better place.

I intend to Buy in Jan ahead of the results.

MNG top 10 shareholders are Sovereign Wealth Funds (Saudi and Norway) and Large Investment groups (eg Vanguard). They own around ⅓ of the company.

The largest shareholder (Saudi) holds just over 6%,

These are all very large investors that own a diverse range of assets. Don’t expect much change in these holdings over time.

Source Marketscreener.

HCM presents on Thursday (links of the presentation section of the website)

For those interested IPSEN presented today - they are the owner of Tazmetostat outside China.

Their business model is to acquire products through M&A and they do not have a big scientific staff….sounds a good fit for a China based research company to partner with.

Q3 results were better than expected.

This company is generating significant capital….with a $3bn mcap and a return of about $500m and annualised AOP around $1.4bn it trades on 3x earnings and is returning 15% pa to shareholders……

Amazingly cheap at $40

I would certainly hope that the Directors understand the criticality of being adequately funded.

They may say better the right deal than a bad deal……but there has been a 70% decline in the SP since the FDA approved the test……they really dont have much time left to strike a deal and the terms of an equity raise get worse by the day for existing holders.

Of course a partnership with a years operating cash upfront and they will be heroes for a while.

CaneToad - I think the story is one of jam tomorrow.

There is certainly accumulated value in the policies already in force that will flow over the next 40 years…..but management is yet to realise it for shareholders.

As a monoline insurer it gets all the riskiness of a single product but has somehow managed to grow significantly without the share price rising.

It is not alone with competitors LGEN / AV / PHNX / MNG all flat / declining.

On the face of it, you can buy about 200p of value for 70p….not many markets allow that - especially one that promises 15% growth for the next decade as the DB schemes are transferred to private hands.

Why is this? Concern about financials generally, a past history of regulatory intervention and a balance sheet that has been weak but is improving steadily.

LTH dream of a take private deal….management say they have talks but presumably the price they wanted was unrealistic…..I for one would take 120p… in the absence of a deal the SP bumps along unloved…..maybe the market view will change, but then again negative macro events keep happening to threaten the financial system….

HCM initially jumped with many other bio pharma companies in HK, but then fell back to finish a fraction up when Beigene was up 10%.

Indicates to me that the market is beginning to resist the upward trend and perhaps the PDUFA rally has run its course? With risks now to the downside…..

Https://www.pharmaceutical-technology.com/deals-dashboards/china-m-a-activity-pharmaceutical-industry/

Not much has happened according to this article….esp when compared to the US where it seems a new deal by a mega cap to acquire a company for a few billion happens monthly.

Beigene / Innovent / HCM / Junshi etc all seem to be well capitalised but not to be able to go andbuy a competitor. I am expecting the CCP will start wanting to create national champions before too long….

not sure exactly what you mean by other recognised combinations.

for tori - none in us, it has some mono therapies approved in china and has several combinations in progress. see slide 15 of their jpmorgan presentation on their investors page.

for hcm - they have hedged their bets with pd-1 using sintilimab (innovent) for fr*****inib combos…..both drugs linked with lilly and tori for surufatinib…and az has linked savo with tagrisso.

combos may be good at extending the franchise, but clearly the patient affordability means the total margin compared to mono therapy may well be lower….i am pretty sure az is using savo to extend the life of tagrisso and protect from generic versions when they become eligible.

they are exploring taz with their haemoncology portfolio.

In what could be good long term news Junshi has got its PD-1 treatment approved by FDA.

Toripalinab is the tori in the SURTORI combination trial….if this is much more effective than Surufatinib as a solo treatment this may be a new route to explore taking Surufatinib global. (Still awaiting news of their strategy).

A nice surprise from HK overnight as HCM has risen a further 10% today.

The Chinese gambling spirit may push this higher in the short term, but I dont expect this to stick long after the PDUFA date when there will be profit taking.

But not complaining as we will likely see 325p this morning in London.

1pencil / Davey and others - Innocare Pharma popped into my line of sight reading some recent pharma articles….

They are valued mostly as cash holdings….smaller than HCM first US NDA expected mid 2024 so PDUFA would be mid 25.

Not one to buy now, but may be worth tracking over the next couple of years to see how they are going.,,,any views?

It is a China company with a HK listing ref 9969.hk

Back to being the largest mcap on AIM - and would be v high in the FT250.

Big on AIM has not often been a comfortable position….

The PDUFA date creeps ever closer……and

we await the Amdiz read out

And Sovlep NDA submission plus any further partnering news.

BTW Takeda 2023 Q3 results were pretty poor reflecting a failed Ph3 and a failed confirmatory Ph3 trial. Profits were down 70%…..they will be looking for a bounce back next year in their oncology division..lets hope they get the opportunity to promote Fruq in the US soon.

Petro

Note that although the value of bonds will undoubtedly be lower….these assets are held in a “matching portfolio” to back the annuity liabilities….the value of liabilities also falls because the future payments are discounted at a higher rate….the result is that the capital position does not change by as much as you might think.

The loss in value of the assets goes through the contract service margin (future profits) as do changes in the present value of future liabilities so there should not be huge headline IFRS losses.

The key is the capital position and cash released from operations….both have been improving in the last few years and the company looks to be on firmer foundations…..of course a market meltdown would be challenging to all financials.

DaiIchi has signed a development deal worth initially $4bn and up to $22bn for 3 compounds…..must have outbid AZN for these.

Corruption reviews will impact all as it is aimed as much at the administration as the pharma cos.

However we can hope that it will affect specialist innovative younger companies less. Generics and easily substituted (cheap?) products would appear more susceptible. I would hope that Drs will choose to use innovative more effective products regardless of price/corrupt practices by competitors (I may be being naive).

Already 4x ave volume after one hour on Nasdaq today…..maybe some news soon.

HK seems to be ignoring the China regulatory activity….or atleast allowing optimism about global revenues for HCM to override that headwind.

It has recovered opening losses to less than 1% fall compared to 6-8% in UK/US yesterday.

Bodes well….but I would not be surprised to see some resistance / profit taking happen ahead and after the PDUFA decision…..

This has understandably had a good run….if it keeps going it will be around 375p at PDUFA date.

I wonder when some more significant profit taking will set in?

A good rise in NY has put the theoretical UK price over £3.

Of course there is the small matter of a second war that could develop in unpredictable ways over the weekend.

There still seems to be momentum with 6 weeks til the PDUFA date…..