MALAYSIA, Jun 15, 2021 – (ACN Newswire) – An innovative world-first Hip Fracture Registry Toolbox has been launched today (June 15) to address the alarming deaths and disabilities caused by the more than 1 million hip fractures sustained in the Asia Pacific each year.

Developed by the Asia Pacific Fragility Fracture Alliance (APFFA) in collaboration with the Fragility Fracture Network (FFN), the practical and informative resource explains the fundamental need, and how to best advocate for, the establishment of a national hip fracture registry.

Tailored to clinicians, hospital administrators, healthcare systems and governments alike, the Toolbox covers pertinent topics, including stakeholder engagement and consolidation, building a case for change, and planning and funding a registry, to setting up a pilot registry, and navigating governance and ethics approval. Examples of current registries and other useful resources also feature in the Toolbox.

Concerningly, one-in-four patients who sustain a hip fracture die within a year, and less than half of those who survive, regain their previous level of function. The expected direct incurred cost associated with the more than 1.1 million hip fractures estimated to have occurred in nine countries and regions in APAC, including China, Chinese Taipei, Hong Kong SAR, India, Japan, Malaysia, Singapore, South Korea and Thailand in 2018, amounts to USD 7.5 billion. This cost is projected to increase to almost USD 13 billion by 2050.

According to Professor Jacqui Close, Consultant Ortho-Geriatrician, and Clinical Director of the Falls, Balance and Injury Research Centre at Neuroscience Research Australia (NeuRA) and APFFA Hip Fracture Registry Working Group Co-Chair, widescale implementation of hip fracture registries worldwide can facilitate vast improvements in care for the millions of people who sustain a hip fracture each year.

"Hospitals can utilise hip fracture registries to benchmark their provision of care against best practice clinical standards for acute care, rehabilitation, and secondary fracture prevention. Hip fracture registries can transform patient-level data into information that both equips and empowers hospital teams to identify, and develop solutions for key challenges within their respective institutions, and to strive for ongoing improvement in care," said Prof Close.

By 2050, one in four people in APAC will be aged over 60. This portion of the population is expected to triple between 2010 and 2050, reaching close to 1.3 billion people. Within the same timeframe, between 4.5 to 6.3 million hip fractures are predicted to occur worldwide, half of which will occur in Asia.

Dr Hannah Seymour, Consultant Geriatrician and Medical Director, Fiona Stanley Fremantle Hospitals Group in Australia, and APFFA Hip Fracture Registry Working Group Co-Chair argues that given the exponential increase in both the incidence and costs associated with hip fractures to date, and those anticipated globally, hip fracture registries serve as a vital tool underpinning quality improvement initiatives in the Asia Pacific region, and globally.

"As of April 2021, 18 countries across Asia Pacific, Europe, Latin America and North America had established a hip fracture registry, at different stages of maturation, participation and development. Notably, only three registries are currently operating in the Asia Pacific.

"The Hip Fracture Registry Toolbox explains how timely, reliable and constructive feedback to clinical teams, coupled with the engagement and participation of key stakeholders, improves the impact of hip fracture registries," Dr Seymour said.

Registries can contribute to government initiatives designed to manage rapidly ageing populations, and can further help governments to promote the equitable provision of care. With adequate operational efficiency and funding, registries can improve healthcare, and are likely to prove significantly cost-effective.

According to Dato' Dr Joon-Kiong Lee, Orthopaedic Surgeon in Malaysia and APFFA co-Chair, today's release of the Toolbox coincides with the launch of APFFA's YouTube channel: "The APFFA YouTube channel will house a series of educational videos featuring interviews with leading clinicians from the Asia Pacific arena, reflecting on important considerations for each of the seven key steps involved in establishing a hip fracture registry.

"We trust our APFFA and FFN Toolbox, and supporting videos, will arm our colleagues throughout Asia Pacific, and the rest of the world, with the necessary inspiration, knowledge and guidance on how to successfully establish a national hip fracture registry in their respective countries," said Dato' Dr Lee.

About APFFA
Formed in November 2018, APFFA comprises seven global and regional member organisations from the geriatrics, orthopaedics, osteoporosis and rehabilitation sectors, with the primary purpose of driving policy change, improving awareness and changing political and professional mindsets, to facilitate optimal fragility fracture management across Asia Pacific. www.apfracturealliance.org.

About the APFFA HFR Working Group
The APFFA Hip Fracture Registry Working Group is a principal action group within APFFA, comprising global experts in hip fracture treatment and management, charged with driving the development of the HFR Toolbox. The HFRWG report on hip fracture epidemiology and outcomes across Asia Pacific aims to frame the problems facing the region, and outline APFFA-related projects capable of providing a partial solution to these issues. The HFRWG is also responsible for a feasibility study examining the costs and practicalities of establishing new hip fracture registries in specific countries throughout Asia Pacific.

About the Fragility Fracture Network (FFN)
The FFN is a global organisation comprising a multidisciplinary network of experts charged with improving the treatment and secondary prevention of fragility fractures. The organisation strives to optimise multidisciplinary management of a patient with a fragility fracture, to ensure maximum recovery, quality of life, and no further fractures, worldwide.

The Hip Fracture Audit Special Interest Group (HFA SIG) comprises a multidisciplinary network of clinicians
well-versed in hip fracture audits, striving for global adoption of a Minimum Common Dataset (MCD), and a worldwide platform to share HFA knowledge, learning and research.

To learn more about APFFA and download the Hip Fracture Registry Toolbox head to: www.apfracturealliance.org/HFR-toolbox/, follow APFFA on LinkedIn: asia-pacific-fragility-fracture-alliance, and YouTube: www.youtube.com/channel/UCpb3uxbr8BQ1vz2KAp8imxw.

For more information, contact:
Kirsten Bruce or Mel Kheradi, VIVA! Communications, Sydney, AUSTRALIA
T. +61 401 717 566 / +61 2 421 551 257
E. kirstenbruce@vivacommunications.com.au / melorin@vivacommunications.com.au

Download the Hip Fracture Registry Toolbox Digital Media Kit:
www.apfracturealliance.org/hfr-toolbox-media-kit/

References:
See all references at https://acnnewswire.com/press-release/english/67278/.

Copyright 2021 ACN Newswire. All rights reserved. http://www.acnnewswire.com

HONG KONG, Apr 26, 2021 – (ACN Newswire) – China Medical System Holdings Limited (0867.HK) ("CMS" or the "Company") has been active in the market this year. From the acquisition of Luqa to enter the medical aesthetic market early this year, the Company has attracted the attention of the market. Recently, it has announced the series of agreement signed with Trinomab Biotech Co., Ltd. ("Trinomab"). CMS will make equity investment in Trinomab, and establish a joint venture (the "Joint Venture") with Trinomab, contributed with cash and related products technologies by CMS and Trinomab respectively. The Joint Venture will entrust CMS with the clinical development and commercialization of all its products in Mainland China, Hong Kong, Macau and Taiwan, and Trinomab with the production of all its products. This collaboration marks the beginning of the CMS's industrial investment in cutting-edge biotech companies.

1. What has CMS seen in Trinomab?

The announcement has drawn even more attention from the market and people are curious about why Trinomab has successfully attracted CMS to make collaboration with it.

Established in 2015, Trinomab was jointly founded by the worldwide known expert Dr. Liao Huaxin and the entrepreneur Mr. Zheng Weihong. It is an innovative global biopharmaceutical company dedicated to the R&D of original natural fully human monoclonal antibodies and providing corresponding scientific services.

Trinomab has a new-generation, world-class, core patented technology platform highly regarded in the industry, the natural fully human monoclonal antibody R&D integrated technology platform HitmAb, which is dedicated to the development of original and efficient natural fully human monoclonal antibodies with independent intellectual property rights, suitable for the infectious diseases, autoimmune diseases and malignant tumors, etc.

As the fourth-generation antibody technology, "natural fully human monoclonal antibodies" refers to fully human antibodies derived from natural human B-cell clones or its gene expression. It is marked by high safety, having broad spectrum to foreign pathogens and strong affinity with pathogen targets, which can solve the problem of anti-drug antibody reaction in the clinical use of antibody drugs developed by traditional technologies.

Based on the HitmAb platform, Trinomab has developed more than 20 new native natural fully human monoclonal antibodies, including those against infectious diseases (e.g., rabies virus, tetanus toxin, cytomegalovirus, respiratory syncytial virus, varicella-zoster virus, novel coronavirus, etc.) and cancers among which, certain antibody products are in the process of rapid industrialization.

For example, the Fully Human Hla Antibody of Trinomab contributed to the Joint Venture is a natural fully human antibody against Staphylococcus Aureus (SA) infection, developed via the HitmAb platform, and is now in the preclinical stage. This product neutralizes the alpha-hemolysin (Hla) released by SA to avoid immune downregulation to B cells and to improve immune response. For severe and high-risk patients with SA colonization, compared with antibiotics which are commonly used clinically, Fully Human Hla Antibody of Trinomab has good safety and the preclinical studies have shown good Hla toxin neutralizing activity. It is expected to solve the problems of high mortality, resistance to treatment and side effects from SA infection.

With its HitmAb platform technology, Trinomab is constantly discovering new antibodies to advance the iteration of antibody drugs. In addition to keeping projects that are in line with its own strategy for self-development, Trinomab co-develops the rest with partners in the industry, which gives CMS (0867.HK) the opportunity to make this collaboration. From the announcement of CMS, we can find that other than to the product to be incorporated into the Joint Venture, the two sides will negotiate to promote the priority collaboration on other specific products, so we can expect more projects to be incorporated into the Joint Venture in the future.

In General, Trinomab owns a cutting-edge technology platform and can continue to promote the R&D and production of innovative drugs through the technology platform. While having great development potential, the strength of Trinomab's team is also quite impressive. So why did Trinomab still gladly accept the olive branch passed by CMS?

We believe that although Trinomab has considerable advantages in technology platform and drug R&D, promoting the clinical development and commercialization of new drugs is a major challenge of the channel resources for pharmaceutical companies, and at present, Trinomab does not have the advantages in the clinical and commercialization capabilities, and the accumulation of these capabilities and resources does not happen overnight. Therefore, CMS, which has rich domestic channel resources and strong commercialization ability, chooses to join hands with Trinomab to achieve a win-win combination, which opens up a fast track of commercialization for its subsequent products, and will play an important role in promoting the overall healthy development of Trinomab.

2. Taking this collaboration as a model, CMS will initiate the industrial investment in biotech companies and accelerate the "flywheel" of innovative R&D

From the above, we can see that CMS is precisely interested in the core technology platform of Trinomab. This kind of collaboration is not without a precedent. As early as in 2018-2019, Trinomab had reached cooperation agreements with Changchun BCHT Biotechnology Co. and Wuxi Biologics, etc. It can be seen that the Trinomab's capability of monoclonal antibody drug R&D based on its patented antibody R&D platform has been fully recognized and supported by well-known companies in the industry.

CMS has been working in the industry for many years and has been highly focused on the two core segments of the pharmaceutical industry chain – R&D and marking. CMS' promotion capability is undeniable, with an academic network covering about 57,000 hospitals and medical institutions nationwide and a professional academic promotion team of about 3,300 staffs. And the Company has created leading market positions for its many branded drugs. It also achieved fruitful results in the past through equity investments in overseas biotech companies or strategic cooperation with leading pharmaceutical companies for collaborative R&D. In the past three years, CMS has rapidly acquired more than 20 innovative products with unique and differentiated competitive advantages, such as Diazepam Nasal Spray, Tildrakizumab, Cyclosporine Eye Drops 0.09%, etc., demonstrating its strong innovation ability.

The collaboration with Trinomab is an active exploration of CMS' industrial investment in innovative biopharmaceutical companies. In the past, the Company has always been focusing on overseas markets, but with this collaboration, it also marks the official opening of CMS' industrial investment in domestic cutting-edge biotech companies.

So, what are the features and advantages of this investment?

a. Exploring a new model for industrial investment and building a unique competitive product innovation capability

Unlike simply building its own R&D team or purely introducing products for sale, CMS has been focusing more on the two core parts of the pharmaceutical industry chain, product competence and promotion capability in its past development. Base on this, in the past, to achieve effective integration of pharmaceutical companies and related resources, the Company's product pipeline was often more product-based, that is, to invest in a company for a certain product. It can be seen that so far CMS has invested in the equity of 8 overseas biotech companies and has made strategic cooperation with 6 leading overseas pharmaceutical companies.

CMS has developed strong product selection capability and is able to continuously find innovative drugs with market potential in this path. However, due to the emphasis on product selection, there is no direct relationship between new products, or between the companies the Company invested in, making it difficult to achieve a unified effect. Based on this, CMS further optimized its investment layout and began to focus on cutting-edge technology platforms to explore new products. The benefits of doing so include not only expanding the number and scope of selected products and achieving effective synergy within the platforms, but also forming an organic iteration of innovative products and achieving deep control of the industrial ecology.

From the collaboration with Trinomab, through equity investment + establishment of the joint venture, CMS has made early involvement in the domestic leading technology platform and innovative resources, and advanced its current pipeline of mainly mid- and late-stage products to the early stage, so as to rapidly enrich the innovation pipeline, and realize the expansion from the "point" of investing in innovative drugs as the core to the "extension" of investing in innovative technology platforms, in order to form an industrial investment model that can be rapidly duplicated in the future. Under this model, CMS will actively explore leading technology platforms for cooperation, so as to continuously strengthen its core competitiveness in innovative R&D and introduce cutting-edge innovation results, to build a unique product innovation capability.

b. Achieving complementary advantages and giving full play to CMS' clinical development and commercialization strengths

Behind the Company's industrial investment in domestic cutting-edge biotech companies lies not only its own financial or product selection strength, but also the strengths in innovative R&D and product commercialization.
From the perspective of clinical promotion ability, the completion of clinical enrollment of 220 patients for the blockbuster innovative drug Tildrakizumab in just around two months fully proves that CMS has the hard strength to quickly enroll patients and promote the clinical development with the synergy of its network and expert resources.

In addition, in terms of commercialization ability, the Company has been in the industry for more than 20 years, with its accumulated extensive industry resources, CMS is able to undertake the commercialization of innovative products and achieve rapid sales growth in its efficient operation system, and ultimately achieve an efficient cash flow cycle. CMS' commercialization ability is not purely based on its sales capability, as we can see the Company's selling expense ratio has been maintained at about 22% for years, which is relatively low compared with the industry level, it can be illustrated that CMS is not only very compliant in sales and promotion, but also attached great importance to differentiation advantages and market demands of products rather than blinded innovation, so as to build strengths in its products and brands and achieve win-win for its own economic benefit and the society.

c. Featured with light assets and high efficiency, CMS is aimed at creating VIC model 2.0

At present, there are mainly three models of the innovative drugs R&D in China, namely, big pharma model (independent R&D), biotech model (license in/out) and VIC model (active capital investment).

The big pharma model is often applied to large pharmaceutical companies, as it requires pharmaceutical companies to have sufficient profit-making products to support their investment in R&D. The model requires companies to focus more on the creation of R&D pipeline, as well as the cultivation of research and sales teams, which is apparently an asset-heavy business model.

The biotech model is an R&D model based on drug licensing and development. Under this model, pharmaceutical companies have the key R&D technologies, so they can generate revenue through "License out" clinical stage products, and diversify their R&D pipeline through "License in".

The VIC model is a combination of "VC (venture capital) + IP (intellectual property) + CRO (R&D outsourcing)", which is also known as the active new drug investment model. Under this model, the party that owns the IP receives venture capital, sets up a project-based company, and collaborates with a CRO in R&D. Similar to this model, CMS' industrial investment in innovative biotech companies is featured by being relatively asset-light, low-cost and highly efficient, which can save investment and achieve high cost-effectiveness. For example, with this model, CMS does not need to build its own labs, factories, etc. It acts more as an industry integrator and predator to explore innovative products and technology platforms, and uses its own advantages to integrate resources and continuously realize the incubation and commercialization of innovative products.

The difference between CMS' industrial investment model and VIC model is that the leading party of VIC model is the capital, whose understanding of the industry and contribution to product innovation is very limited. In contrast, CMS' industrial investment is a more advanced version of the VIC model, in which the leading party is CMS. With accumulated resources in the industry for a long time and deeper understanding of products, CMS is more capable of promoting the R&D and commercialization of innovative drugs, and is able to create a systematic, replicable and long-term competitive industrial investment model of innovative drugs. CMS will also build a highly competitive barrier for itself in the industry, and with the maturing of the platform ecology, its business will be expanded and the business potential will be unleashed continuously.

3. Conclusion

Based upon the current situation of China Medical System (0867.HK), its existing business has maintained a solid development momentum, with its FY20 annual report showing that the turnover up by 14.4% year-on-year to RMB 6.946 billion, net profit up by 30.7% to RMB 2.556 billion; bank balance, cash and realizable acceptance bills totaled RMB 3.114 billion as of December 31, 2020. The excellent performance shows that the Company has the necessary strength to support its industrial investment in innovative drugs and actively explore innovative platforms and projects in the industry.

At the same time, this model is being continuously optimized in order to make it replicable. With the emergence of the platform ecology of the Company, top advantageous resources in the industry will be absorbed, and the platform will eventually become an important birthplace of innovative products. And the value generated from continuous commercialization will in turn feed the entire ecology, and the flywheel of the Company's growth will also be fully accelerated.

From another perspective, CMS is not the "star" chased by capital, but more like a "producer" in the pharmaceutical innovation industry, who constantly incubates quality projects to meet the market demand and realize the continuous leap of its own value through the integration and optimization of industry resources.
Gelonghui Statement: The views in this article are from the original author and do not represent the views and position of Gelongghui. As a special reminder, investment decisions need to be based on independent thinking, the content of this article is for reference only, not as actual operational advice. Trade at your own risk.

Gelonghui Statement: The views in this article are from the original author and do not represent the views and position of Gelongghui. As a special reminder, investment decisions need to be based on independent thinking, the content of this article is for reference only, not as actual operational advice. Trade at your own risk.

By Gelonghui



Copyright 2021 ACN Newswire. All rights reserved. http://www.acnnewswire.com

TOKYO, Apr 8, 2021 – (ACN Newswire) – Olympus Corporation ("Olympus" – Director, Representative Executive Officer, President and CEO: Yasuo Takeuchi) announced today the opening of a new facility in Westborough, MA, to serve as the global headquarters for its Therapeutic Solutions Division (TSD) and its medical business in the United States.

Olympus has identified TSD as a strategic focus for growth and shifted its global head of TSD from Tokyo to the U.S. to have better access to a key medical industry cluster and generate growth through stronger business opportunities. Since the Transform Olympus initiatives were unveiled in 2019, many U.S.-based executives have been leading TSD growth; Olympus has dramatically expanded the business with acquisitions, as well as through organic growth.

The new 150,000-square-foot facility in Westborough will accommodate both the U.S. TSD employees and those formerly reporting to Image Stream Medical (ISM) facility located in Littleton, MA, with the exception of the manufacturing employees who will remain in Littleton. The facility will serve as one of several R&D hubs for Olympus, while enabling coordinated and agile management processes to support a global medical technology enterprise. At Olympus Westborough, the Olympus Continuum Training and Education Center will offer hands-on learning opportunities led by top medical experts using advanced medical equipment in a wetlab setting, both in person and virtually via the MedPresence telecollaboration platform. For interactions with customers and prospects, the Olympus OR Innovation Center showroom, also outfitted with the MedPresence platform, will provide an immersive environment for in-person or virtual integrated OR demonstrations.

The new Westborough facility will also provide enhanced opportunities for Olympus to build relationships with potential future employees. Olympus will facilitate relationships with potential job candidates, as well as continued partnerships with universities, colleges, and technical schools in the greater Boston area to bring world-class skills and capabilities to the company.

Nacho Abia, Chief Operating Officer of Olympus Corporation, said, "The U.S. market continues to be the largest in the world because of growing demand for minimally invasive treatment and surgery and the need for remote collaboration under COVID-19, so it's natural that we decided to combine all functions in Massachusetts in one place to facilitate agility and collaboration. This agile and globally-connected way of business will enhance our overall business competitiveness."

About Olympus' Medical business

As a leading medical technology company, our Medical business uses innovative capabilities in medical technology, therapeutic intervention, and precision manufacturing to help healthcare professionals deliver diagnostic, therapeutic, and minimally invasive procedures to improve clinical outcomes, reduce overall costs, and enhance the quality of life for patients and their safety. Olympus' Medical portfolio includes endoscopes, laparoscopes, and video imaging systems, as well as surgical energy devices, system integration solutions, medical services, and a wide range of endotherapy instruments for endoscopic and therapeutic applications. For more information, visit www.olympus-global.com.

For questions or additional information, please contact:

United States
Jennifer Bannan
+1 412-403-8742
jennifer.bannan@olympus.com

Europe, Middle East and Africa
Matthias Gengenbach
+49 15142369420
matthias.gengenbach@olympus-europa.com

Japan and APAC
Yuka Horimoto
+81-90-2490-1071
yuka.horimoto@olympus.com

Copyright 2021 ACN Newswire. All rights reserved. http://www.acnnewswire.com

HONG KONG, Apr 2, 2021 – (ACN Newswire) – As the earning season approaches, once again listed pharmaceutical companies are attracting the attention of the public. Recently, China Medical System Holdings Limited ("CMS" or the "Company") has released its annual results, with both revenue and profit higher than market expectations. According to its 2020 annual results, turnover is up by 14.4% to RMB6.946 billion; net profit up by 30.7% to RMB2.556 billion; basic earnings per share up to RMB1.024, with a proposed final dividend of RMB0.20 per share.

In the past, influenced by expectations of the effects of China's centralized procurement policy and the Company's product transition, CMS's valuation in the capital market was once under pressure, but with the Company's strategic transformation from a CSO to an innovative pharmaceutical company, coupled with its own solid business growth, its share price has gained a significant increase in the past few months, but is still relatively low in the capital market. The Company's current dynamic P/E ratio is only about 13x, with a market value of HK$ 39.4 billion. However, market values of innovative pharmaceutical companies without profits such as BeiGene and Junshi Biosciences have well exceeded HK$50 billion or even HK$100 billion in HKEX. This shows that the share price of the Company does not reflect its real value after its transformation. It's worth digging deeper into the innovative pipeline of the Company to take a look at its long-term growth potential and the inevitability of valuation increase.

1. Firm in transition, the Company is using S&D model to drive its innovative development

Looking back at its history, the Company began introducing exclusive or original drugs from multinational pharmaceutical companies through rights control or exclusive sales agreement early in 2010, creating a unique "CMS Model". Under this model, the Company has accumulated a strong network of overseas upstream resources and good reputation, and formed a strong product evaluation system. However, considering the potential impacts of the Company's existing products, which are all original or exclusive drugs with expired patents or no patents, and China's centralized procurement policy on performance growth, CMS began to actively adjust its business strategy and transformed into an innovative pharmaceutical company at full speed since the end of 2017.

The true meaning of rebirth lies in the courage to kill your past self. As a CSO leader, CMS takes advantage of its competences in deployment of innovative drugs in its gradual transformation, and has formed a development path that is different from most other biotechs and innovative pharmaceutical companies.

First of all, the Company's original business has maintained a steady growth over the years and generated strong cash flow, which has given itself the confidence to further expand its business, while its long-term accumulated resources and networks overseas have also given it more opportunities to quickly deploy overseas innovative resources. For various reasons, CMS has transformed itself into a venture investor in overseas pharmaceutical companies and actively promoted its presence in the innovative drug field. Through equity investment in overseas biotech companies and strategic cooperation, the Company has rapidly formed a R&D pipeline covering a number of innovative products in just around three years.

The following are some highlights of the Company's deployment of innovative drugs:

a) Excellent BD capability and mature system help CMS enter into the innovative drug field quickly
Compared with the R&D (research & development) path, which is common in pharmaceutical companies, the Company adopts an S&D (search & development) model, i.e., gradually enriching its innovative pipeline through global search for quality innovative drug projects and early R&D participation. This model particularly tests the Company's ability to screen and evaluate products.

Looking back at the Company's history, as a leading CSO company, CMS' unique vision and product selection ability has been fully verified by the introduction of a series of blockbuster original products with clear efficacy, sufficient clinical evidence and competitive differentiation in the past. The Company has also achieved excellent performance with these quality products for a long time. And with the transition, this long-tested ability is continuing to help its selection of innovative products.

In fact, as the fastest way to deploy innovative drugs, the Company has also polished a complete and mature BD system. From top-level design, introduction strategy, clinical development in China, to the match with existing products and sales teams, and even product commercialization, CMS has built a thorough mechanism and cultural foundation that are suitable for the growth and commercialization of innovative drugs.

In the past three years, CMS has quickly acquired more than 20 innovative products with unique competitive advantages, including Diazepam Nasal Spray, Tildrakizumab, Cyclosporine Eye Drops 0.09%, etc., and achieved great results, which fully validates its strong and sustainable BD capability and forms a competitive moat, providing CMS with opportunities to achieve a higher premium valuation.

b) Avoiding competition in overpopular products, CMS tries to find "diamond in the rough" with a differentiated product selection strategy
In fact, according to its footprint in innovative product deployment, due to its innate promotion-driven genes, the Company is more capable of exploring new products from the perspective of marketing and promotion. It does not blindly pile up popular products, but takes cost effectiveness, market potential and whether meeting unmet market needs as the benchmarks, and takes a long-term view of the commercial prospects and the localization value of the innovative pipeline.

In recent years, there have been pharmaceutical companies who spend a lot of money to buy some seemingly sexy, but very competitive drugs. Taking PD-1 for example, its R&D costs hundreds of millions of dollars, but the competition between pharmaceutical companies is fierce. With the price reduction caused by national centralized procurement, it is clear there has been serious involution in this field. This is the kind of fields that CMS has been intentionally avoiding in its selection process. The innovative drugs that the Company has acquired all have differentiated competitive edges and considerable market potential. Taking the products mentioned above as examples, Diazepam Nasal Spray is an innovative drug targeting acute repetitive seizures that is convenient to use outside the medical setting with a very rapid onset of action; Tildrakizumab is a novel monoclonal antibody targeting IL-23 with high cost-effectiveness for the treatment of psoriasis; Cyclosporine Eye Drops 0.09% is a novel, preservative-free, clear ophthalmic solution using a globally patented nanotechnology for the treatment of dry eye.

In addition, let's take the Methotrexate Pre-filled Syringe/Pen introduced by the Company last year as an example to see the characteristics of its deployment of innovative drugs. Methotrexate is an API with a long history, and is referred to in many articles as one of the ten landmark drugs in human history, while many biological agents under development now are also clinically compared with methotrexate injections for equivalence. But even so, as an inexpensive and efficacious old drug, there are severe gastrointestinal side effects in oral preparations resulting in decreased patient compliance, and there is currently neither pre-filled methotrexate injection products approved, nor methotrexate injectables for the treatment of RA on Chinese market. It is based on this typical unmet clinical need that the Company chose to introduce this drug to fill the market gap.

c) Rapid clinical advancement capability with significant organizational and institutional strengths
Although CMS does not have a CMO with a strong background for the time being, its medical team and clinical capabilities should not be underestimated. In terms of clinical works, CMS plays its resource advantages in clinical development by strictly controlling the core clinical processes such as clinical protocol formulation, patient enrollment and quality control, and cooperates with CROs to jointly promote clinical projects in China.

Most of CMS's innovative drugs are in late clinical stages or already marketed in the U.S. or Europe. So, in the design of clinical trials in China, the Company's medical team needs to refer to the clinical protocols of its overseas partners, and then make adjustments and innovations to make the protocols suitable for the Chinese market. Currently, all of the registration trials are progressing smoothly. In addition, with its 3,000+ professional promotion staff and a wide range of hospital and physician resources, CMS has the solid strength needed to quickly enroll clinical patients and promote the clinical development of products. For example, on March 11, the Company announced that it had completed enrollment of all 220 subjects required in the registration bridging trial of its blockbuster innovative drug Tildrakizumab in China in just 2.5 months.

d) Strong academic promotion capability helps commercialization of innovative drugs
With more than two decades of successful experience in academic promotion, the Company has accumulated extensive industrial and network resources to carry out the commercialization of innovative products in the future. Its well-established system has also been providing great support to the commercialization of innovative products whether in terms of compliance management, digitalization, or team management and training.

The Company has repeatedly mentioned in financial reports its efforts in refining management and compliant marketing, such as optimizing organizational structure, strengthening application of digital tools, enhancing compliance training, etc. Meanwhile, the Company has made continuous efforts on digital promotion for many years, thanks to which, its selling expense ratio has remained at around 22% for years, which is at a relatively low level in the industry. In addition, the Company has a professional team and organizational system. By the end of 2020, the Company's academic promotion system has covered about 57,000 hospitals and medical institutions nationwide, with 3,300 professional academic promotion staff. As a company noted for sales and promotion ability, its strong professional academic promotion capability and compliant and efficient system will bring broad market prospects for its innovative products once commercialized.

2. Great market potential for the innovative pipeline and great room for growth for the Company

According to the Company's financial report, by the end of 2020, the Company has more than 20 innovative products with relatively high innovation level, high market potential and competitive differentiation advantages, among which, 9 products have been approved for marketing in the U.S. and/or Europe, and 3 products are in the registration clinical trials in China.

According to the R&D progress of its products, the Company is expected to have a number of blockbuster products marketed in succession, which may provide new growth points for the Company.

Next, let's take a look at some of the blockbuster products that are expected to be marketed soon as well as their market potential:

a) Diazepam Nasal Spray
The product is indicated for acute repetitive seizures in patients six years of age and older, and is expected to be marketed this year. It has received marketing approval from the U.S. FDA, and the Company has completed dosing and blood sample collection of all subjects in the registration trial in China in 2020, and is expected to submit an NDA in the near future.

According to Chinese epidemiological data, it is estimated that there are approximately 6 million active epilepsy patients in China, with an additional 400,000 new patients each year. According to the 2002 WHO Demonstration Project, only 37% of Chinese patients with active epilepsy received medication with a treatment gap of 63%, which means only about 2 million patients with active epilepsy received regular treatment. Of the 2 million patients, 20-30% are out of effective control, with an average of nearly 70 recurrent seizures per year. Therefore, it can be estimated that the product's target patient population is at least 400,000, assuming an average of 30 seizures per person per year, and a selling price of RMB300 per spray (with reference to the selling price of about US$300 per spray in the U.S.), the market potential of the product will exceed RMB3 billion per year.

b) Cyclosporine Eye Drops 0.09%
Expected to be launched next year, Cyclosporine Eye Drops 0.09% is used to increase tear production in patients with dry eye, and has a global nanotechnology patent. The Company received the clinical trial notice of the product from NMPA of China in June 2020 and completed the first subject dosing in December, expecting the product to be launched in 2022.

Data shows that the incidence of dry eye in China is about 21-30%, while epidemiological data shows that patients with moderate-to-severe dry eye account for about 40% of dry eye patients. According to this projection, there are over 100 million patients with moderate-to-severe dry eye in China. Since there are various channels of treatment for eye diseases in China, assuming a 10% hospital visit rate for patients with moderate-to-severe dry eye, the target treatment population would be about 10 million. In terms of treatment cost, the clinical study of Cyclosporine Eye Drops 0.09% shows significant improvement in the primary endpoint after 12 weeks of treatment with 2 doses of the product per day, so assuming a 12-week treatment course of the product and a treatment cost of RMB25 per dose (with reference to the selling price of about RMB25 per dose of Zirun(R) 0.05% Cyclosporine Eye Drops (II) of Sinqi Ophthalmic Medications), the product would cost about RMB4,000 per treatment course. Combined with the target population of about 10 million projected above, the market potential for this drug will exceed RMB3 billion if the Company could cover 8% of the patients.

c) Tildrakizumab
Tildrakizumab is used for the treatment of moderate-to-severe plaque psoriasis, and has already been approved for marketing in the U.S., Europe, Australia, and Japan. In China, with the completion of all subject enrollment in the registration clinical trial, the product is expected to be marketed in 2022.

Chinese epidemiological data shows that the incidence of psoriasis in China is about 0.47%, with a total number of patients exceeding 6.5 million. Among them, about 30%, or 2 million patients, are with moderate-to-severe psoriasis. Regarding the current market size of monoclonal antibodies for psoriasis in China, according to the prices of monoclonal antibodies already approved, which generally cost tens of thousands to hundreds of thousands in RMB for annual treatment, and taking into account the price reduction in NRDL price negotiations, RMB100,000 can be taken as the average annual treatment cost. Assuming that the penetration rate of biologics in patients with moderate-to-severe psoriasis can reach about 20% in the future, the entire market size of monoclonal antibodies for psoriasis will exceed RMB40 billion. With the Company's strong sales and promotion ability, assuming that the product takes 12% of the market share in the future, the peak sales could reach about RMB5 billion.

d) Others
By 2023, the Company's products such as Plenity (an innovative weight loss product), Desidustat (indicated for CKD anemia), Methotrexate Pre-filled Syringe/Pen (pre-filled injectables indicated for RA) and Methylene Blue MMX (enhancing lesion detection during colonoscopy) are expected to be approved for marketing, all of which also have a market potential of at least RMB1 billion.

Taking Methotrexate Pre-filled Syringe/Pen as an example, it is easy to use, convenient for self-administration at home, and strikes a greater balance of efficacy and safety, excellent tolerability and compliance. With 5 million RA patients in China, the peak sales of this product is estimated to exceed RMB1 billion . Methylene Blue MMX is also a product with promising market potential. It has been clinically proven to improve the detection of all lesions during colonoscopy and is easy to use. If it is included into the routine procedure of full-spectrum colonoscopy in the future, the sales potential of this product is estimated to be at least RMB1 billion as there about 10 million colonoscopy cases in total in China.

3. Conclusion

To conclude, CMS's advantages in deployment of innovative products come from two aspects. On the one hand, the Company's strong BD ability built up in its long-term development gives it the confidence and strength to quickly enter the innovative drug field, and at the same time, it does not blindly chase after popular products, but focuses on digging overseas quality innovative products with relatively high market potential and unmet market demand using its differentiated product selection strategy. On the other hand, the resource advantages based on the strong marketing and promotion system empower the Company with rapid clinical advancement ability and strong academic promotion ability, which strongly supports the clinical development and commercialization of innovative products. Based on all these, CMS has made remarkable achievements in its transformation, and it is believed that with the marketing of blockbuster innovative products, the Company's value will be re-recognized by the market and its valuation will usher in a new leap.

After CMS released its annual results, several institutions have published research reports that are optimistic about the Company's transformation focusing on innovative drugs and its long-term potential. First Shanghai Financial Group emphasized CMS's unique vision of product selection, strong profitability of BD projects, and high efficiency in clinical development of blockbuster innovative products. It projected that CMS will have six innovative drugs marketed in China in the next three years, and with the Company's strong academic promotion ability and the products' own differentiation advantages, it's believed that once these products are marketed, they're expected to bring considerable contribution to the Company's performance. Industrial Securities mentioned that the Company's Cyclosporine Eye Drops 0.09% and Tildrakizumab are expected to be approved in 2022 and four other innovative products to be approved in 2023. With the successive launch of these innovative products, the Company's product mix is expected to be significantly optimized.

In addition, Citi reported that the Company's management is committed to acquiring licenses for five competitive innovative drugs each year, and the nasal spray for epilepsy is also planned to be launched in China this year, which are expected to continuously contribute to its revenue; meanwhile, the Company has several other drugs that are expected to be launched in China in the next few years, based on which Citi raised its earnings forecast for 2021 and 2022 by 39% and 57%, respectively. At the same time, Citi raised its target price of CMS by 134% to HK$26 from HK$11.1, with a "buy" rating.

In summary, it is not difficult to find that all these institutions have full recognition of CMS in its presence in the innovative drug field. They have all raised their target prices of the Company based upon the Company's performance and potential. Compared with ordinary investors, professional institutions tend to have a deeper understanding of the industry and the enterprise. These bullish reports have all shown that, despite the fact that the Company's share price has almost doubled in the year, they still have full confidence in the Company's future potential.

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HONG KONG, Mar 30, 2021 – (ACN Newswire) – Turnover and net profit increased at the same time, innovative pipeline continued to expand, and the synergy between its businesses became increasingly obvious …..China Medical System Limited (the "Company" or "CMS"), who has just released its annual results, has brought too many surprises to the market.

In recent years, CMS has successfully completed its transformation from an "old CMS" driven by sales and promotion to a "new CMS" driven by innovative R&D by deepening its innovative pipeline and promoting the synergistic development of multiple business lines. Now, with its strength in business development and sales promotion, the innovative pipeline and new businesses continued to expand, which has become a powerful driving force to lift the Company's valuation ceiling.

According to zhitongcaijing.com app, on March 16, CMS released its 2020 annual results. The financial report shows that the Company's overall performance achieved solid growth in 2020, with annual turnover up 14.4% y-o-y to RMB6.946 billion, net profit up 30.7% y-o-y to RMB2.556 billion.

In fact, the Company's ability to grow against the odds in an environment affected by the global public health event in 2020 was made possible by the stable revenue from its existing core products. In addition, the Company has actively participated in innovation and acquired products with differentiation advantage. With the smooth progressing of registration and clinical processes for a number of its high-quality products, and the approaching of the commercial launch of its blockbuster innovative drugs, certainty for its future growth continues to improve. In addition, CMS is also expanding the healthcare business as well as the dermatology and medical aesthetic business, aimed at forming a synergistic development between the old and new business lines to bring new growth engine for the Company and promote the continuous release of intrinsic value in the future.

Behind its solid growth, lies the strength of its core products.

CMS' overall performance relies on the Company's strong abilities in academic promotion and retail network, and more importantly, on the strength of its core products.

According to the annual report, the Company has four core product lines: cardio-cerebrovascular line, digestion line, ophthalmology line and dermatology line. In terms of product sales, the cardio-cerebrovascular line and digestion line, the Company's most important core product lines, continued to maintain growth in 2020, with revenue up by 18.9% and 18.5% respectively. Whilst, in the second half of the year, the ophthalmology and dermatology lines saw extremely strong revenue growth, reversing the slightly downward trend seen in the first half of the year under the impact of the pandemic, achieving revenue increases of 16.3% and 20.3%, respectively.

The key reasons for the stable growth of the Company's core product lines are the low impact of policies and the stability of the products' markets.

On the policy side, so far, the expansion of "centralized procurement" has no impact on CMS yet. Take Plendil and Deanxit, the Company's heavyweight products in its cardio-cerebrovascular product line, for example, in China, no generic Plendil has passed the consistency evaluation, and there is only one generic Deanxit.

According to the current rules of "with three or more generic drugs that have passed consistency evaluation" in the selection of drugs for centralized procurement, it can be seen that national centralized procurement policy will not affect the performance of the Company in the short run.

As for the product market, many of CMS' core products are drugs for chronic diseases with strong brand stickiness. Patients often need long-term or lifelong medication with low product replacement rate and low daily treatment cost. So they are not only less affected by public health events, but even if they are included in national centralized procurement in the future, the impact may be lower than the market expectation due to the product's high retail market share and strong patient stickiness.

In fact, in addition to promoting the stable growth of its core products, CMS has also made great progress in the field of innovative R&D.

Innovative pipeline R&D continues to advance with "fresh blood" continuously injected

As a pharmaceutical company with international development capabilities, CMS has developed an innovative drug pipeline through its excellent BD capabilities and the integration of international resources, which is another important path to meet the huge unmet medical needs. Today, CMS, which has responded quickly and actively laid out its innovative pipeline, is already reaping the fruits of its innovative R&D.

According to the data, CMS has altogether over 20 innovative drugs, all of which are innovative products with high innovation level, good market potential and competitive differentiation advantages. Among them, 9 products have been approved for marketing in the U.S. and/or Europe, and 3 products are in the process of registration clinical trials in China.

Take the core product Diazepam Nasal Spray as an example, by the end of 2020, CMS has completed dosing and blood sample collection of all subjects in the comparative PK study, and the product is expected to be launched in China this year.

Notably, Diazepam Nasal Spray is also the first out-of-hospital emergency drug approved by the U.S. FDA for acute repetitive seizures in patients with epilepsy 6 years of age and older. If the product is successfully marketed in China, it is speculated that it will become the home remedy for children with epilepsy based on parents' protective mindset towards their children. The market of Diazepam Nasal Spray is very promising after its launch. It is estimated that there are about 6 million active epilepsy patients in China, and about 400,000 new patients each year. Among patients who receive formal treatment, 20-30% still cannot be effectively controlled, and the number of recurrent seizures is frequent, averaging as many as nearly 70 times per year.

Assuming that 15% of the 2 million patients who receive formal treatment need Diazepam Nasal Spray to control recurrent and frequent seizures, and an average of 40 seizures attacks per person per year, the annual demand is estimated at 12 million units. Currently, the selling price of Diazepam Nasal Spray is approximately $300 per unit in the U.S., and assuming a selling price of RMB300 per unit in China, the annual sales market potential of the product would be RMB3.6 billion.

Recently, the registration bridging Phase III trial in China of Tildrakizumab, a novel monoclonal antibody specifically targeting IL-23, has completed enrollment of all 220 subjects within only 2.5 months (including holidays of the New Year and Chinese Lunar New Year), highlighting another yet-to-be-discovered innovative advantage of CMS's rapid clinical advancement capability based upon its professional sales and promotion network as well as expert resources.

In addition to Diazepam Nasal Spray and Tildrakizumab, there are seven other products in the Company's innovative pipeline, including Cyclosporine Eye Drops 0.09%, all of which have been approved for marketing in Europe and/or the U.S., and the Company is now actively promoting the marketing of these products in China.

In addition to advancing the research and development of existing innovative pipeline, the Company also realized sustained expansion of innovative pipeline in 2020.

According to zhitongcaijing.com app, in January 2020, CMS strategically cooperated with Zydus and acquired the exclusive license of innovative product Desidustat Tablets; in June, the Company made equity investment in Gelesis and acquired innovative product PLENITY; in September, the Company strategically cooperated with medac and acquired innovative products Methotrexate Pre-filled Syringe/Pen and BCG for Intravesical Instillation; in December, the Company acquired innovative product Methylene Blue MMX through strategic cooperation with Cosmo. All of the above products are introduced based on the actual needs of the Chinese market, and the market space of each product is at least RMB one to several billion.

In terms of the Company's development plan, in the short term of about 3 years, CMS will have 6-7 blockbuster innovative drugs marketed in China, with a market potential totaling over RMB 20 billion. The Company expects to introduce at least 5 innovative drugs per year on average, and is expected to become one of the Chinese pharmaceutical companies with the most innovative drugs in the long term.

High-quality innovative drugs with huge market demand, combined with strong drug commercialization and academic promotion capabilities, will be a big boost to the Company's revenue and profits in the short- to mid-term once these innovative drugs are approved for marketing in China.

Deep plowing the healthcare industry to create trending healthcare products through industrial synergy

In 2020, with the growing demand for healthcare, driven by policy, Internet technology and the impact of COVID-19, the healthcare industry in China is facing a great window for development, which also brings new development opportunities for CMS.

CMS's rich overseas channel resources and good reputation, mature product introduction system, responsive international supply chain system and strong sales promotion network have formed significant industrial synergy with the healthcare segment, supporting the healthcare segment to continuously create "best-selling" products and establish strong market advantages.

According to zhitongcaijing.com app, CMS has cooperated with major e-commerce platforms to open cross-border e-commerce "CMS Health Overseas Flagship Stores" to create a one-stop shopping platform for high-quality overseas healthcare products.

On November 1 last year, CMS Health Overseas Flagship Stores were launched in JD Worldwide and Youzan Mall; by the end of last year, 18 products from 4 well-known European brands had been launched. It is expected that by the end of 2021, the flagship stores will have more than 300 cooperative products, covering nine core areas.

In addition, CMS is continuously injecting new energy into its healthcare business. It is reported that as of press date, its flagship store has nearly 60 products, the surprisingly rapid development of the business clearly shows the extremely strong execution of CMS.

Diving deep into the golden track of dermatology and medical aesthetics, CMS continues to strengthen its ability to integrate upstream and downstream industry chain

In addition to the healthcare business, the dermatology and medical aesthetic business is also a key area for CMS to develop vigorously. CMS has been involved in skin treatment and has established certain expert network resources. In order to further enter the medical aesthetic product line and achieve deeper development in skin management and medical aesthetics, on February 1 this year, CMS completed the acquisition of Luqa, a dermatology and medical aesthetics specialty company, to go further into the golden track of medical aesthetics.
Luqa's key prescription medicines and medical devices cover Aethoxysklerol, Stratamark/Strataderm, and Zalain, and Aethoxysklerol is one of the leading brands that has long been clinically used for the sclerotherapy of varicose veins; Luqa's medical aesthetic products feature Mesohyal and Mesoeclat from Mesoestetic of Spain, and Neauvia hyaluronic acid series.

CMS' acquisition of Luqa is noted by the market because of the strong synergy effect between upstream and downstream industries.

From the upstream of the industry chain, Luqa has rich leading European medical aesthetic resources, while CMS has more than 20 years of experience, resources and channels of investment in products in overseas markets, and has a good reputation overseas, especially in Europe, the acquisition to achieve the interchange of resources in the upstream of the industry line, which will undoubtedly promote the integration and fission of resources more effectively and achieve the effect of "1+1>2". With the addition of Luqa, it is expected that more leading skin management and medical aesthetic products will be included, enriching CMS' product lineup and expanding the area of its business.

In the downstream part of the industry chain, CMS has rich resources of dermatology experts, who will be able to give advice, build brand and create reputation for dermatology and medical aesthetic products from a professional perspective, while Luqa's sales channels covering a wide range of medical institutions and agency network will complement CMS's advantages and help CMS to form a more comprehensive and in-depth downstream network layout in the future.

In terms of the overall medical aesthetic market, China's medical aesthetic industry grew at a CAGR of 22.5% from 2014-2019, which made China one of the fastest growing countries in the world, and is expected to maintain a high growth rate of over 20% in the coming years. In a growing dermatology and medical aesthetic market, there is not yet a leading company in China. The resource synergy between Luqa and CMS will help CMS to have strong competitive advantages in both product and sales. With these advantages, CMS is expected to become the first high-end beauty and health management company in China.

However, the market has not yet reasonably valuated CMS, who has strong innovative R&D strength and multi-industry synergy.

According to zhitongcaijing.com app, although the valuation of CMS has increased recently due to strong performance, the dynamic PE reflected by the Company's share price is only about 12.34x as of the press date. While the already undervalued pharmaceutical and healthcare stocks in the Hong Kong Stock Exchange are still trading at the PE of nearly 20x, which verified that CMS is obviously undervalued.

In fact, there is a certain lag in the market for the valuation of CMS. From the perspective of business development, it is not only the existing drugs that are currently driving the Company's valuation growth, but also the Company's innovative pipeline, healthcare business and dermatology and medical aesthetic business, which are all immune to China's "centralized procurement" and will bring strong performance momentum to the Company in the future, and are also powerful engines to drive the Company's valuation growth.

From the perspective of innovative drug development alone, as mentioned earlier, CMS will have 6-7 blockbuster new drugs marketed in China in 1-3 years, with a combined annual market potential of over RMB 20 billion. According to an institution's previous estimation, the target price will raise to HK$19.80 using the PE valuation method, based on a conservative estimate of the value of seven blockbuster innovative products, as well as the value of seven generic drugs and without considering the value of the Company's healthcare business and Luqa's brand value for the time being.

zhitongcaijing.com app observed that on March 18, the share price of CMS jumped 15.01% to close at HK$18.24 per share. It can be seen that the market's attitude towards the "new CMS" has started to improve significantly. Taking into account the positive impact of the healthcare and dermatology and medical aesthetic segment, CMS is expected to see further valuation growth in the mid to long term.

In the dermatology and medical aesthetic sector, for example, in China's A-share, the average valuation of stocks under the Choice medical aesthetic concept stock has exceeded 140 times. As a scarce quality target in the concept of dermatology and medical aesthetic in the Hong Kong Stock Exchange, after the acquisition of Luqa, CMS has the conditions and advantages for its entry into the medical aesthetic industry through the great synergy in skin management and medical aesthetic field, and the Company's valuation is also expected to rise accordingly.

According to zhitongcaijing.com app, Citi has recently released a research report, raising the target price of CMS by 134% to HK$26 from HK$11.1, with a "buy" rating.


By: zhitongcaijing.com app


Copyright 2021 ACN Newswire. All rights reserved. http://www.acnnewswire.com