APAC Focus: China Healthcare "UBS Evidence Lab inside: AIDD is an opport..."

Research evidence excerpt

APAC Focus: China Healthcare "UBS Evidence Lab inside: AIDD is an opport..."

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China Healthcare Equities

ChinaAPAC Focus: AIDD is an opportunity not threat

for China biopharma and CDMOsPlease Healthcare

Chen Chen, PhD

Analyst

chen-zb.chen@ubs.com

+86-10-5832 8201

Anita Wei

anita.wei@ubs.com

+852-2971 7459

Wei Xiong

S1460518100005

wei.xiong@ubs.comAI-drivendrug discovery (AIDD) companies are outperforming China healthcare +86-21-3866 8883

indices, a trend we expect to persist as fundamentals improve. Contrary to the view

that AIDD is a threat to biopharma and CRO companies, we see the technology as a Michael Yee

Analyst catalyst for consolidation, as leading Chinese biopharma firms actively expand

michael.yee@ubs.com

AIDD capabilities to differentiate their pipelines and enhance their out-licensing +1-305-536 9101

(BD) leadership, while leading CDMOs that can turn AI-designed molecules into

real, testable drug candidates are poised to benefit in both volume and price terms. Samantha Meadows, PhD

We initiate InSilico at Buy and upgrade CSPC from Neutral to Buy. We also reiterate

samantha.meadows@ubs.com

Buy on leading biopharma Hengrui and Innovent, as well as on leading CDMOs, +1-212-713 2482

Wuxi Apptec, Wuxi Bio and Wuxi XDC amid the AIDD momentum.

David Guo, PhD

AIDD market poised for rapid expansion; US and China dominate AIDD pipeline S1460524040001

The US and China jointly lead global AIDD across in terms of AI capacity and depth of david-za.guo@ubs.com

AIDD pipeline. The AIDD market is projected to grow to US$74.6bn in 2032F, with a +86-10-5832 8010

CAGR of 25.1% (Frost & Sullivan), with licensing activity increasingly driven by Liz Han, CFA

frontrunners, such as InSilico (US) and XtalPi (China).