Emerging Biotech Innovators in Asia: HighTide Therapeutics and Two Undervalued Gems

The Asian biotech sector is undergoing a quiet revolution, with companies leveraging cutting-edge science and cost-efficient innovation to address global healthcare challenges. Among the undervalued players, HighTide Therapeutics (2511.HK) and two lesser-known peers—Sichuan Kelun-Biotech (SEHK:6990) and Suzhou Zelgen (SHSE:688266)—stand out for their promising pipelines, regulatory catalysts, and discounted valuations. Here's why these stocks merit attention.

HighTide Therapeutics: A Steep Discount Masks Clinical Momentum

HighTide is a leader in metabolic and liver disease therapies, with its lead candidate HTD1801 (berberine ursodeoxycholate) advancing through late-stage trials. Despite its market cap dropping 73% since late 2023 to $1.7 billion (), the company's clinical progress remains robust:
- Phase 3 data for T2DM (type 2 diabetes) is expected in Q3 2025, with an NDA submission to China's NMPA likely by year-end.
- HTD1801's dual benefits in improving glycemic control and liver health (via reductions in MRI-PDFF and cT1 scores) could position it as a first-in-class therapy for metabolic dysfunction-associated steatohepatitis (MASH), a condition with no approved treatments.
- Global partnerships, including collaborations with U.S. and European clinical networks, enhance its commercial potential.

While the stock's recent volatility reflects broader market skepticism, the $3.38 share price () appears disconnected from its pipeline's scientific merit. Investors should watch for Q3 Phase 3 readouts and potential FDA Fast Track updates for MASH.

Sichuan Kelun-Biotech (SEHK:6990): Oncology Pipeline at a 33% Discount

Sichuan Kelun-Biotech, a 33%-undervalued stock with a $34 billion market cap, is advancing therapies in oncology and immunology. Its key assets include:
- Sac-TMT: A targeted therapy for hematologic malignancies (e.g., acute myeloid leukemia) expected to seek NMPA/FDA approval by 2026.
- Tagitanlimab: An anti-CD47 antibody targeting solid tumors, with trials expanding into new indications.

The company's 25.5% annual revenue growth and $1.26 billion enterprise value suggest strong cash flow. While near-term risks include regulatory hurdles, the discount to its $509.89 fair value offers asymmetric upside if sac-TMT gains approvals.

Suzhou Zelgen (SHSE:688266): Autoimmune Innovator at a 42% Discount

Suzhou Zelgen, trading at a 42% discount to its $199.79 fair value, is building a diverse pipeline addressing autoimmune diseases. Key catalysts include:
- ZG-B10: A rheumatoid arthritis treatment targeting IL-6R, with Phase 3 data expected in late 2025 and a 2026 launch.
- Cell therapy programs: Including engineered T-cells for autoimmune disorders, which could tap into China's growing biologics market.

With 45.4% annual revenue growth outpacing China's 12.4% biopharma market expansion, Zelgen is well-positioned to capitalize on domestic demand. The stock's low valuation reflects skepticism about its early-stage pipeline, but successful ZG-B10 trials could trigger a re-rating.

Risks and Investment Thesis

• Regulatory Delays: HighTide's MASH trial results and Sichuan Kelun's sac-TMT approvals are critical inflection points.
• Valuation Squeeze: Biotech stocks remain sensitive to macroeconomic volatility and funding headwinds.
• Policy Tailwinds: China's focus on domestic drug innovation (e.g., inclusion of HTD1801 in the 13th Five-Year Plan) reduces reliance on U.S. FDA approvals.

Investment Takeaway:
These stocks offer compelling asymmetry:
1. HighTide's HTD1801 could redefine MASH treatment; buy on dips below $3.50 ahead of Q3 data.
2. Sichuan Kelun's oncology pipeline is underappreciated; target $400–$450/share if sac-TMT gains approvals.
3. Zelgen's ZG-B10 success could lift its valuation to $150+/share; hold for long-term biologics exposure.

For contrarian investors willing to look past near-term volatility, these undervalued innovators represent a chance to capture growth in Asia's rising biotech landscape.

Note: Always conduct due diligence and consult a financial advisor before making investment decisions.