China's biotech rally has only just begun
Healthcare
Horizon Insights argues investors continue to underestimate the sector’s progress as global pharma validation accelerates. Over the past year, BMS, Merck and others have paid billions in upfront licensing fees for Chinese-developed assets. China now leads globally in ADCs and bispecifics, representing 40-50% of pipelines. YTD, MNC-led upfront BD payments total $9.1bn, on pace to double last year’s figure. Horizon Insights sees a structural repricing underway, driven by patent cliffs in big pharma, globally competitive pipelines, deep policy support and rising clinical credibility. If 2018 marked the breakout for China EVs, 2025 could do the same for innovative drugs. Top picks include Innovent Bio, Keymed Biosciences and Akeso.
Edition: 218
- 22 August, 2025
New accounting and governance red flags
Forensic Alpha is a machine intelligence system that is able to scan through a company's filings, extracting relevant accounting and governance data. Their technology works by translating unstructured data found in the notes to the accounts and governance disclosures into structured data. They then process that data, searching for the presence of common red flags that are known to be indicators of weak fundamentals and / or imminent problems. 147 new company filings were processed in the past week across Europe. 29 companies saw significant new red flags. While this report focuses on Nordex (Contract Assets, Ageing of Receivables, Related Party Transactions), other stocks highlighted include Hellenic Telecommunications, Ubisoft, Merck KGaA and Hapag-Lloyd.
Edition: 187
- 31 May, 2024
Healthcare
There has been much excitement around Merck and MRNA's latest cancer vaccine after ASCO, with data appearing impressive. However, Foveal Research’s latest report suggests otherwise, with the vaccine Keytruda combo performing similar to historic Keytruda alone, along with an unusual underperformance of the control arm that flatters results. Secondary endpoint at ASCO reveal the real concerns over the true treatment effect of MRNA's addon. Dr Amit Roy pitched this idea at our recent Equity Shorting Conference. Click here to listen.
Edition: 170
- 29 September, 2023
Healthcare
MRK's flagship cancer treatment, Keytruda, is under patent until 2028, and as a biological, has a stronger economic moat than the market recognises. Valens believe the market appears to be understating Keytruda’s total market opportunity as the number of approved indications continues to increase. New indications have the potential to grow Keytruda’s target market substantially, which could boost revenues 10%-25%+ annually. It’s currently used in several collaborations with pharma and biotech companies like Moderna. These combination therapies add to Keytruda’s competitive moat, as they mean any potential generic would need to get approval for the same combination therapies to be disruptive.
Edition: 168
- 01 September, 2023
Healthcare
In newly published data from MRK / MRNA’s PD1 + mRNA cancer vaccine trial at AACR last week, headline efficacy may be flattered by Keytruda alone control arm underperformance by c.11% compared its historic phase III performance, with the vaccine combination arm performing similar to previous monotherapy Keytruda alone trials, suggesting the phase III confirmatory trial may have a higher than expected hurdle to beat.
Edition: 159
- 28 April, 2023
Merck (MRK) & Gilead (GILD) / Arcus Biosciences (RCUS)
Healthcare
Dr Amit Roy remains concerned over the added benefit of TIGIT to established PD1 therapy for MRK and GILD / RCUS. As expected, the street’s expectations over MRK’s TIGIT in cancer was misplaced again, as it failed to beat chemo in later line lung cancer. GILD / RCUS 1st line TIGIT data also appears equivocal with large imbalances in baseline characteristic and an underperforming PD1 arm in high PDL1 expressers. Moreover, the TIGIT + PD1 response of 41% still falls short of response rate seen with Keytruda alone. Amit also remains concerned about MRK’s prospects in first line lung, with, again disappointing response rate of just ~33% in patients naïve to PD1 therapy.
Edition: 157
- 31 March, 2023
Healthcare
PFE are attempting to move from their successful, but now outdated Prevnar 13 pneumococcal vaccine to Prevnar 20. However, paediatric data suggests it may be slow to achieving noninferiority to old Prevnar 13, and a lack of superiority on the extra seven varieties that Prevnar 20 is meant to prevent in children. Thus, Dr Amit Roy is concerned that it may struggle to position itself as better than already approved alternative MRK’s, Vaxneuvance. He expects most of the $4bn dollar paediatric pneumococcal vaccine market will go to MRK with only $1bn for PFE. Combined with better data in the $1bn adult market, Amit sees $1.6bn for Prevnar 20 overall.
Edition: 154
- 17 February, 2023