美国的另一项提案可能阻碍跨太平洋生命科学合作

China healthcareEQUITY:HEALTH CARE&PHARMACEUTICALS China Health Care& PharmaceuticalsJialin Zhang,CFA,CPA-NIHK Still positive inthelong runbutconcernedaboutshort-termpressuregiven current lukewarm sentiment.On 21 May (local time), a letter from the Chairman of Select Committee on China jialin.zhang@nomura.com+85222526134 Congress of the US, was sent to the Us Department of Treasury, recommending theTreasury to add biotechnology as a prohibited technology in the ComprehensiveOutbound Investment National Security (COINS) Act.This petition is against the backdrop of surging collaboration between China and the US in life-science,mainly Chinese pharmaceuticals/biotech out licensing their early-stagemolecules to US counterparts, over the past two years. This letter cited two recent deals:one between Innovent (1801 HK,Buy) and Eli Lilly (LLY US, not rated), see our report:QuickNote-Innovent(1801HK)(Buy)-AcollaborationwithEliLillyandanotherbetween Hengrui (600276 CH/1276 HK,Buy) and BMS (BMY US, not rated), see ourreport:QuickNote-Hengrui (600276CH) (Buy)-Big collaboration deal signedwithBMSto llustrate how deeply China and Us firms co-work on this front. It is not the first time that the Us has objection to the cross-pacific collaboration, see ourreport: China healthcare - Geopolitical concerns re-emerge... We would not be able toproject an outcome from this proposal, as it involves multiple stakeholders including Uspharmaceuticals, Us Congress,Department ofTreasury,and investors,amongothers.However,webelievethecrossboardercollaborationin life-science,acornerstoneforhuman advancement, and a sector worth tillions of dollars, would remain largely intact, ifwe refer to the Biosecure Act actual impact as a guide. Also a friendly US-China leaderssummit in mid-May might help ease trade escalation and a further'decouple' less likely, inour view. Nevertheless, the sentiment of sector investment might be weighed down in the shortterm, even though investors have largely shrugged off recent out-license news, as theshare prices of Innovent and Hengrui have not moved significantly despite the two above-mentionedcollaborationannouncements. Appendix A-1 See Disclaimers for Nomura Group entity details. Analyst Certification subject securities or issuers referred to in this Research report, (2) no part of my compensation was, is or will be directly or indirectly related tothe specific recommendations or views expressed in this Research report and (3) no part of my compensation is tied to any specific investmentbanking transactions performed by Nomura Securities International, Inc., Nomura International plc or any other Nomura Group company. IssuerSpecificRegulatoryDisclosures Securities International, Inc. (NSI") and Instinet, LLC (ILLC), U. S. registered broker dealers and members of SIPC. Hengrui (1276 HK)Rating and target price chart (three year history) ValuationMethodologyOurtargetpriceof HKD114.64 isbased onDCFmodel (discountback toend-2025),assuming WACCdrugs, (2) VBP on biosimilars and (3) IBI363 clinical deveiopment setback. Risks that may impede the achievement of the target price Downside risks include: (1) price cuts in next round VBP; (2)valuationpremiumnarrowed and (3)unsuccessful BD andclinical progress; ImportantDisclosures Online availability of research and conflict-of-interest disclosures Nomura Group research is available on www.nomuranow.com/research, Bloomberg, Capital IQ, Factset, LSEG.Important disclosures may be read at http://ao.nomuranow.com/research/m/Disclosures or requested from Nomura Securities International, Inc.If you have any difficulties with the website, please email grpsupport@nomura.com for help. The analysts responsible for preparing this report have received compensation based upon various factors including the firm's total revenues, aportion of which is generated by Investment Banking activities. Unless otherwise noted, the non-US analysts listed at the front of this report are 2241 restrictions on communications with covered companies,public appearances, and trading securities held by a research analyst account. the Commodities FuturesTrading Commissionandthe National Futures Association (NFA)as swapdealers.NGFP, NDPl,andNlplc aregenerally engaged in the trading of swaps and other derivative products, any of which may be the subject of this report. 57% have been assigned a Buy rating which, for purposes of mandatory disclosures, are classified as a Buy rating; 34% of companies with this rating are investment banking clients of the Nomura Group*. 0% of companies (which are admitted to trading on a regulated market in the EEA)withthisrating were supplied material services**bythe Nomura Group41%have been assigned aNeutral rating which,forpurposes of mandatory disclosures,is classified as a Hold rating; 57%of companies with this rating are investment banking clients of the Nomura Group*. 0% of companies (which are admitted to trading on a regulated market in theEEA)