Good News on Listing | Frost & Sullivan Assists Siasun Pharma Holdings Limited to Successfully List in Hong Kong (6600.HK)

Sai HealthCare Holdings Limited (hereinafter referred to as 'Sai HealthCare') successfully listed on March 3, 2021, with a global offering of 116 million shares and a Hong Kong offering of 11.599 million shares at an issue price of HK$18.8. Frost & Sullivan (Frost & Sullivan, hereinafter referred to as 'Frost & Sullivan') provided exclusive industry advisory services for the listing of Sai HealthCare and hereby warmly congratulate it on its successful listing.

During the Hong Kong listing process, Frost & Sullivan mainly undertook the following tasks: helping the company accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the company's competitive advantages, assisting the company, investment banks, and other intermediaries in completing relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important sections), facilitating communication with the Hong Kong Stock Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the company in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

Thymic hormones refer to any hormones produced by the thymus that can help attract lymphoid stem cells to the thymus and stimulate them to develop into mature T lymphocytes. Thymic hormones can serve as immunomodulators, which are drugs that enhance or suppress the body's immune function, used to treat diseases caused by abnormal immune function. Immunomodulators have been widely applied in clinical fields such as tumors, severe infections, respiratory and digestive system diseases. Among all types of immunomodulators, thymic hormones have the advantage of having controllable side effects and good safety, making them suitable for a wide range of indications.

Currently, there are three thymopeptide drugs in China, namely thymopeptide, thymopentin, and thymalfasin:

● Thymalfasin (scientific name thymopeptide & alpha;1, abbreviated as 'Tα1')Thymalfasin is a natural substance originally isolated from thymic tissue, a pure synthetic peptide containing 28 amino acids with a half-life of 1.65 hours. Thymalfasin acts as an immunomodulator by promoting the maturation of T lymphocytes, increasing the secretion of various lymphokines by activated T cells, enhancing the level of lymphokine receptors on the surface of T cells and activating CD4 cells to strengthen allogeneic and autologous human mixed lymphocyte responses. Thymalfasin differs from thymopeptide and thymopentin in that it is the only substance with the same chemical structure and configuration as natural human Tα1, capable of improving patient immunity, enhancing the quality of life, and increasing remission rates and survival rates. Thymalfasin (trade name Rituximab) was first approved in Italy in 1993, in China in 1996, and registered in more than 30 countries. It has been used in a wide range of clinical applications, including the treatment of chronic hepatitis B and C, vaccine boosters, and adjuvant therapy for cancer. The latest evidence suggests that it has the potential for use in combination with tumor immunotherapy drugs.

● Thymopeptide 5Thymopeptide 5 is a synthetic pentapeptide (residues 33–38 of Tmpo), which can fully reproduce the immunological effects of full-length thymopoietin, although whether it can be synthesized naturally has not been confirmed to date. Thymopeptide 5 is a peptide with a short half-life, with a plasma half-life of about 5 to 6 minutes. As an immunomodulator, thymopeptide 5 induces the differentiation of T lymphocytes, promotes the development, maturation, and activation of T lymphocyte subsets. Thymopeptide 5 was approved in China in 1997 (one year after thymalfasin was approved in China), and it is only approved in China. According to PubMed surveys, there are relatively few existing clinical studies and medical evidence.

● Thymopeptide:Thymopeptide is directly derived from the thymus gland of mammals. Although thymopeptide has been on the market in China for over 20 years, clinical use is decreasing due to difficulties in improving its purity and related safety and efficacy issues.

The overall thymus hormone market in China is expected to recover from the downward trend of recent years and achieve growth in the near term. From 2015 to 2019, although the market size of thymalfasin increased, its thymus hormone market size still decreased slightly from RMB 6 billion to RMB 4.7 billion during the same period. The reasons behind this decline include competition from generic drugs and the significant reduction in the market size of thymopentin and thymosin due to the price cuts of various generic drugs from 2015 to 2019. At the same time, even though the market size of thymalfasin shows a growth trend, its growth from 2015 to 2019 did not exceed the reduction in the market size of thymopentin and thymosin during the same period. As thymalfasin gradually replaces thymosin and thymopentin in clinical applications, although there will be some year-on-year fluctuations, the total sales revenue of thymus hormones in China is estimated to reach RMB 52 billion in 2024, with an annual compound growth rate of 2.1% from 2019 to 2024. The total sales revenue of this market is estimated to further reach RMB 64 billion in 2030, with an annual compound growth rate of 3.5% from 2024 to 2030.

In the near future, the market expectations for thymus hormones in China show the following trends:

● Included in more treatment guidelines:As more clinical evidence is accumulating to prove the efficacy and safety of thymus hormone drugs, thymus hormone medications have been included in an increasing number of clinical treatment guidelines. With further accumulation of continuous clinical trial data, thymus hormone medications are expected to be incorporated into more treatment plans and guidelines.

● Thymosuppressive drugs may cover more indications:According to real-world studies and trials initiated by researchers, thymic hormones have shown good efficacy in treating a variety of cancers (including pancreatic cancer, liver cancer, lung cancer, and gastric cancer). These promising clinical results, coupled with the inclusion of thymic hormones in more treatment guidelines, may expand the coverage of their indications.

● Higher penetration:Given the government's and large pharmaceutical companies' efforts to provide broader education for patients, as well as the expansion of their clinical applications, thymoproteins are expected to steadily penetrate into cancer and hepatitis patient populations as immunoadjuvants.

Despite overall fluctuations in the Chinese thymopeptide market, over the past few years, Thymosin has seen an increase in market share due to competition with thymopeptides and thymopentin, leading to continuous expansion of its market. In 2015, in terms of revenue from pharmacies and medical institutions, the market size of Thymosin in China was RMB 21 billion, accounting for about 35.0% of the total thymopeptide market size. In 2019, in terms of revenue from pharmacies and medical institutions, the market size of Thymosin in China reached RMB 24 billion, with an annual compound growth rate of 3.5% since 2015, accounting for 51.1% of the total thymopeptide market size in 2019. The overall growth prospects of the thymopeptide market in the near future, the current share and development space of Thymosin in the Chinese thymopeptide market, as well as the record of continuous growth in this market share, indicate that Thymosin has great potential, capable of further gaining market share from competing products and achieving sustained strong growth in the near future. In terms of revenue from pharmacies and medical institutions, the market for Thymosin in China is estimated to increase to RMB 46 billion by 2024 and further reach RMB 64 billion by 2030, with an annual compound growth rate of 13.9% from 2019 to 2024 and 5.8% from 2024 to 2030, both significantly higher than the corresponding annual compound growth rates of the overall Chinese thymopeptide market during the same period; accordingly, the share of Thymosin in the overall Chinese thymopeptide market is expected to continue growing, with Thymosin expected to account for 88.5% of the overall Chinese thymopeptide market by 2024 and ultimately occupy the entire Chinese thymopeptide market after 2026.

In terms of sales channels, pharmacies are expected to become the main sales channel for thymalfasin in China in the near future. Thymalfasin sales in China mainly occur through two channels: medical institutions (including hospitals and primary health care facilities) and pharmacies. Although thymalfasin sales in China have traditionally been dominated by medical institution channels, there has been a significant increase in sales at Chinese pharmacies over the past few years. In 2015, thymalfasin's revenue from sales to Chinese pharmacies was only RMB 1.066 billion, accounting for 5.1% of the total sales revenue of thymalfasin in China in 2015. In 2019, the revenue from thymalfasin sales to Chinese pharmacies reached RMB 8.297 billion, with an annual compound growth rate of 67.0% since 2015, accounting for 34.8% of the total sales revenue of thymalfasin in China in 2019. In the near future, the pharmacy channel is expected to become the main sales channel for thymalfasin in China. It is estimated that the revenue from thymalfasin sales to Chinese pharmacies will increase to RMB 24.741 billion by 2024 and further reach RMB 43.635 billion by 2030. Calculated based on annual sales revenue, these will account for 54.1% and 68.2% of the total Chinese thymalfasin market, respectively. The annual compound growth rate from 2019 to 2024 is 24.4%, and from 2024 to 2030 it is 9.9%.

The target patient population for Gilead Sciences in China includes patients with chronic hepatitis B and those with immunodeficiency. It is assumed that the target patient population for Gilead Sciences is those over 18 years of age (as indicated on their drug labels). For example, Gilead Sciences is indicated for patients with chronic hepatitis B. Since there is no difference in Gilead Sciences for specific age groups, there are no specific indications for chronic hepatitis B patients over 18 years of age among the target patient population. The number of target patient populations for Gilead Sciences in China increased from 1.27 million in 2015 to 2.39 million in 2019. By 2024, this number is expected to reach 35.5 million, with an annual compound growth rate of 8.2% from 2019 to 2024. It is projected that this number will reach 39.4 million by 2030, with an annual compound growth rate of 1.7% from 2024 to 2030.

Frost & Sullivan, integrating nearly 60 years of global consulting experience, has been serving the booming Chinese market with dedication for 23 years. With a global perspective, we help clients accelerate their business growth and achieve benchmark positions in industry growth, innovation, and leadership. The healthcare industry is one of the core areas of focus for Frost & Sullivan. Over the past sixteen years, the Frost & Sullivan healthcare team has provided financing financial advisory, IPO industry advisory, strategic consulting, management consulting, and other services to hundreds of outstanding domestic and international biopharmaceutical, medical device, healthcare services, and internet healthcare companies. Successful listings include: Zhaoyan New Drugs (6127.HK), Novogene Health (6606.HK), ADAG.NASDAQ (Tianyan Pharmaceutical), 2170.HK (Beikang Medical), 2161.HK (Jianbimiao Miao), 2160.HK (Minimally Invasive Cardiac Therapy), 2135.HK (Rui Li Medical Beauty), 1167.HK (Jiake S Pharmaceutical), 2142.HK (Heplimab), 6618.HK (JD Health), 6996.HK (Deqi Pharmaceutical), 9995.HK (Rongchang Biotech), 2126.HK (WuXi Biologics), 2096.HK (Sono Biotech), 1952.HK (Yunding Newray), 6998.HK (Jiahe Biotech), 9688.HK (Zai Ding Pharmaceutical), 1477.HK (Ocugen Vision), 6978.HK (Yongtai Biotech), 9989.HK (Hapu Pharmaceutical), 9939.HK (Pioneer Pharmaceutical), 9996.HK (Paijia Medical), 9926.HK (Kangfang Biotech), 9969.HK (Nuocheng Jianhua), IMAB.NASDAQ (Tianjing Biotech), 3759.HK (Kanglong Chemical), 3681.HK (China Antibody), 1875.HK (Dongyao Pharmaceutical), 6855.HK (Yasheng Pharmaceutical), 2696.HK (Fuhong Hanlin), 3692.HK (Hansen Pharmaceutical), 2181.HK (Mabotech), 1521.HK (Fangda Holdings), 1873.HK (Via Biotech), 2616.HK (CStone Pharmaceuticals), 1877.HK (Junshi Biotech), 2359.HK (WuXi Biologics), 1801.HK (Xinda Biotech), 2552.HK (Hua Ling Medicine), 6160.HK (BGI), 1672.HK (Gilead Sciences), 2269.HK (WuXi Biologics), 3320.HK (China Resources Medicine), 2633.HK (Jacobsen Scientific & Pharmaceutical), HCM.NASDAQ (Huanghua China Medicine), 1548.HK ( Biotechnology), 1035.HK (BBI Life Sciences), etc. In terms of the number of filings, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong's healthcare IPO market, continuously occupying more than 90% of the market share from 2018 to 2020.

Since the listing of the first batch of companies on the Sci-tech Innovation Board in July 2019, Frost & Sullivan reports have been widely cited in the prospectuses of leading Sci-tech Innovation Board-listed companies in the industry, including HuaXi Biotech (688363.SH), Junshi Biosciences (688180.SH), Zhejiang Genomics & Biotechnology Co., Ltd. (688266.SH), Bio-Thera Biologics (688177.SH), and Shenzhou Cells (688520.SH). It is considered one of the most powerful, professional, and influential industry research institutions in the sector. We hope to work with enterprises to understand industry trends, seize development opportunities, jointly promote innovation and upgrading in China's healthcare industry, and build a healthy future.