Good News on Listing | Frost & Sullivan Assists Huarong Medicine (Cayman) Co., Ltd. to Successfully List in Hong Kong (0013.HK)

Huarong Medicine (Cayman) Co., Ltd. (hereinafter referred to as 'Huarong Medicine') was successfully listed on June 30, 2021, with a global issue of 104,000,000 shares at a price of HK$40.10 per share, raising approximately HK$4.1704 billion. Frost & Sullivan (Frost & Sullivan, hereinafter referred to as 'Frost & Sullivan') provided exclusive industry advisory services for the listing of Huarong Medicine, and hereby warmly congratulate it on its successful listing.

During the process of listing in Hong Kong this time, 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 the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important sections), helping the company communicate with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and supporting the company in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

Over the past century, cancer treatment has made significant progress. The main current cancer treatment methods include surgery, radiotherapy, chemotherapy, molecular targeted therapy, and immunotherapy. Currently, the first-line treatment for most cancers globally still mainly consists of traditional protocols such as surgery, radiotherapy, and chemotherapy. Molecular targeted therapy and immunotherapy, as emerging diagnostic and therapeutic approaches, have gradually become popular in recent years and will drive the development of the global cancer market as a whole.

Tyrosine kinase inhibitors, as one of the earliest small molecule targeted drugs, were first approved for cancer treatment in the United States in 2001. Their significant therapeutic effects on patients have led to major changes in the field of cancer treatment. However, the first-generation tyrosine kinase inhibitors were all multi-target inhibitors, which not only brought benefits to patients but also posed the problem of off-target toxicity, leading to insufficient drug dosages and affecting treatment outcomes. In addition, some patients who initially benefited from small molecule targeted therapy may experience cancer recurrence due to new mutations. Against this backdrop, highly selective tyrosine kinase inhibitors, with their lower off-target toxicity, higher tolerance, and potential therapeutic effects, may become the most promising direction for future research and development of small molecule targeted drugs. Moreover, the combined use of targeted therapy with chemotherapy or immunotherapy has also shown excellent therapeutic effects in numerous clinical trials.

According to a Frost & Sullivan report, the global small molecule targeted drug market reached $542 billion in 2020, with a compound annual growth rate of 14.7% from 2016 to 2020. Driven by factors such as the growing cancer patient population, a large number of unmet clinical needs, improved patient affordability, and policy support, the global small molecule targeted drug market will continue to grow, with an expected compound annual growth rate of 12.3% to reach $969 billion by 2025 and an additional compound annual growth rate of 8.7% to reach $1470 billion by 2030.

Currently, there are many popular targets that have been clinically proven effective, including MET, VEGFR, FGFR, EGFR, CSF-1R, PI3K, Syk, IDH, and ERK. MET and VEGFR, as relatively mature targets, have seen a few drugs approved globally. There are already a large number of phase III projects in the clinical pipeline for FGFR and EGFR, which are expected to be approved in the coming years.

MET is a receptor tyrosine kinase whose signaling pathway plays an important role in the growth and development of mammals. However, its amplification, overexpression, and mutations can lead to functional abnormalities in the MET pathway in various cancers. Currently, there are significant unmet clinical needs for cancer treatment against acquired resistance to EGFR, such as in NSCLC patients who have developed resistance to EGFR-m inhibitors, where about 16%-30% of patients have MET amplification in their tumors. Both overexpression and amplification are associated with the activation of the MET pathway, and generally, MET overexpression coexists with MET amplification.

Currently, there are two selective MET inhibitors approved for marketing globally, both used to treat non-small cell lung cancer with MET exon 14 mutations. The first selective MET inhibitor in China, selpercept, was approved on June 22, 2021, in China and is also used to treat lung cancer patients with MET exon 14 skipping mutations.

It is estimated that the global small molecule MET inhibitor market will grow to $6.5 billion and $16.2 billion respectively in 2025 and 2030. In terms of compound annual growth rate, the fastest market growth will occur between 2020 and 2025, followed by a slightly slower growth rate thereafter.

During the progression of cancer, late-stage tumors secrete large amounts of vascular endothelial growth factor (VEGF), a protein ligand, which stimulates the formation of numerous blood vessels around the tumor. This provides more abundant nutrients and oxygen supply to the cancerous tissue, accelerating tumor growth. VEGF and its ligands can bind to three VEGF receptors: VEGFR1, 2, and 3. Inhibiting the VEGF/VEGFR signaling pathway can block the formation of blood vessels around the tumor, thereby cutting off the source of materials needed for tumor growth.

The global VEGFR drug market reached $20 billion in 2020 and is expected to grow at a compound annual rate of 11.0% during the period from 2020 to 2025, gradually increasing to $337 billion. It is estimated that by 2030, the market will further expand to $521 billion.