APAC Focus: China Healthcare "UBS Evidence Lab inside: Insomnia – the next..."

Research evidence excerpt

APAC Focus: China Healthcare "UBS Evidence Lab inside: Insomnia – the next..."

China Healthcare UBS Research

UBS Research THESIS MAP MOSTSector ThesisFAVOREDMap LEAST FAVORED

Simcere, Hansoh N/A

Pivotal Questions Q: Can ORAs unlock the next growth phase in China’s insomnia therapeutic market?

Yes. China’s insomnia market is defined by a large patient pool but low treatment penetration, while

legacy therapies have constrained treatment uptake. Compared with the legacy drugs, the ORA class

stands out with low side effects, low drug dependence and easier access, and ORAs have the

potential to meaningfully expand treatment penetration. We forecast China's ORA sales to expand

rapidly from cRmb0.1-0.2bn in 2025 to Rmb8.9bn in 2035 (49% CAGR), reaching 32% of the total

sleep disorder therapeutic market in 2035.

Q: Which products could lead in the insomnia market's success?

We view daridorexant and HS-10506 as the key products to drive the next growth phase in China's

insomnia market. Daridorexant and lemborexant are the two fastest-ramping ORAs in the ex-hospital

channel, with daridorexant offering a differentiated profile, including a shorter half life (8 vs. 17-19

hours for others) and a lower rate of somnolence (2.9% vs. 13.1%) in cross-trial comparisons. HS-

10506's OX2R selectivity may further support adoption through improved tolerability and reduced

off-target effects. We forecast China peak sales of Rmb4.1bn for daridorexant and Rmb2.5bn for HS-

10506 in 2034, implying 50% and 30% shares in China's ORA market.

WHAT´S PRICED IN? China's pharma sector has de-rated this year, as the average share price has declined 21% YTD,

underperforming the Hang Seng Index (-12% YTD). China's HK-listed pharma sector is trading at

medians of 15.4x 2026E PE and 1.3x 2026E PEG.