Another major domestic new drug has received approval! On June 8, Remegen Co.,Ltd.'s drug Telitacicept secured approval for two new indications: IgA nephropathy and Sjögren's syndrome. This approval came ahead of expectations and just before the June 10 deadline for national medical insurance reimbursement adjustments. This development suggests these two significant new indications could be included in the national reimbursement drug list by the end of this year, potentially replicating the rapid market expansion path seen with previous drugs that gained market access upon application.
Analysis points out that Sjögren's syndrome has long lacked targeted therapies, with a domestic patient base estimated between 4.2 and 9.8 million, representing a classic blue ocean market. As the world's first approved biologic for this condition, Telitacicept holds a strong first-mover advantage.
The secondary market reacted swiftly. In early trading on June 9, shares of Remegen Co.,Ltd. rose in both its A-share and H-share listings. The A-shares surged by up to 8%, while the H-shares, after touching a new yearly low, staged a strong rebound, gaining over 5% at one point.
Within the sector, the A-share pharmaceutical sector was among the first to turn positive. The sole on-exchange ETF tracking the pharmaceutical sector, the Pharmaceutical ETF (HUABAO PHARMACEUTICAL ETF (562050)), rebounded from its lows, rising over 1%. Stocks like Betta Pharmaceuticals, Zensun Sci. & Tech., and Hansoh Pharma led the gains.
The Hong Kong Stock Connect innovative drug sector also turned positive during the session. The HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVES (520880), which invests 100% in innovative drug R&D companies, continued to trade at a premium, attracting active accumulation from bargain-hunting funds. Key constituent stocks such as 3SBio Inc. and Kelun-Biotech Biopharmaceutical saw gains exceeding 2%.
A recent industry weekly report from Huaxin Securities noted that since May, market sector preferences and policy developments related to U.S.-China licensing of innovative drugs have increased volatility within the innovative drug sector, with a degree of irrationality present. Reassessing the value of innovative drugs requires observation over a longer time horizon. Continued progress and the achievement of milestones in overseas clinical trials will support the long-term value appreciation of innovative drugs.
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