Chinahealthcare

EQUITY:HEALTHCARE&PHARMACEUTICALS

GlobalMarketsResearch

8August2025

MNCs’2Q25Chinaresultssummary

Overallsluggish,whichwethinkmightnotaugurwellforupcomingChinadomesticpeers’interimresultsreleases

Overthepastthreeweeks,severalglobalhealthcarecompaniesreportedtheir2Q25

resultsandheldearningscalls.Wesummarizekeytakeaways,especiallyregardingtheiroperationsinChina.Ingeneral,wefoundtheiroperationsinChinanotencouraging,

reflectingadownbeatenvironmentinthisquarter,andwethinktheirChinesecounterpartsmightalsohavefacedchallenges.

Pharmaceuticalcompanies’operationsinChina:onlyEliLillydidwell

Novartis(NOWNSW,Notrated),Roche(ROGSW,Notrated),Sanofi(SANFP,Not

rated)andMerck(MRKUS,Notrated)reportedweakersalesperformanceinChina,withdeclinesof1%,4%,10%,77%y-ytoUSD1.0bn,CHF777mn,EUR687mn,and

USD407mn,respectively,in2Q25.Ontheearningscalls:1)NovartisobservedaslowdowninsalesofCosentyx(secukinumab,il-17inhibitor),Entresto

(sacubitril/valsartan)andLucentis(ranibizumabinjection)inChinain2Q25,draggedbyamarket-wiseslowdowninpharmaceuticalspending;managementexpectsstabilizationin2H25E(revenuetogrowbysingledigitstolowteens)andbelievesthecompany’ssalesinChinawillgrowbyateenpercentageannuallyintheyearstocome.2)Roche

mentionedastronguptakeforVabysmo(faricimab-svoa)followingitsNRDLlistingthis

year.3)SanofinoteddownbeatDupixent(dupilumab,il-4R/il-13R)salesin2Q25,duetoalowerNRDLprice(despitedrivingover30%volumegrowth).4)MercksaidChinasaleswerestilldraggedbysluggishGardasil(HPVvaccine)performance,owingtosoftdemandandelevatedchannelinventories.

Ontheotherhand,AstraZeneca(AZNLN,Notrated)reported2Q25salesgrowthof5%y-ytoUSD1.7bninChina,onthebackoftherapidramp-upofTagrisso(Osimertinib,

EGFR-TKI)andEnhertu(T-Dxd,HER-2ADC)there.OftheleadingGLP-1players,Eli

Lilly(LLYUS,Notrated)continuedtorecord18%y-ygrowthtoUSD466mnChinain

2Q25,mainlythankstotherobustvolumeramp-upofMounjaro(tirzepatide,GIP/GLP-1).Bycomparison,NovoNordisk’s(NOVOBDC,Notrated)salesinChinaretreated14%y-ytoDKK4.3bn,ofwhichGLP-1salesdeclinedby34%y-ytoDKK1.4bn,mainlydraggedbytheimpactofdestocking,accordingtomanagement.Managementplanstoinvestmoretoexplorelower-tiercitiesinChina.

Medicaldevice/equipmentcompanies’operationsinChina:overalldownbeat

InChina,medicalequipmentmakershavenotwitnessedasignificantimprovementin

marketdynamics,thoughprocurementandstimulusactivitiesmildlypickedupin2Q25.Indetails,in2Q25,GEHealthcare(GEHCUS,Notrated)reporteda3%y-ysalesdeclinetoUSD563mninChina,whileSiemensHealthineers(SHLGR,Notrated)reported1%y-ysalesgrowthtoEUR620mn(includingbothmedicalequipmentandmedicaldiagnosis).

Phillips(PHIANA,Notrated)managementmaintaineditscautiousviewonChinainitsfull-yearoutlook.

Theimpactofunfavorablepolicies(e.g.,diagnosisrelatedgroups[DRG],volume-basedprocurement[VBP]andtaxratereforminthedomesticmarkets)stillweighedonIVD

players:Rochereporteda34%y-ysalesdeclineforitsdiagnosticsbusinessinChinatoUSD458mnin2Q25(vsUSD465mnin1Q25),andSiemensHealthineers’diagnostics

continuedtoreportasalesdeclineinChina.Sysmex(6869JP,NotRated)reported14%y-ysalesdeclineinChina.ThermoFisher(TMOUS,Notrated)managementmentionedahigh-single-digitsalesdeclineintheChinamarket.Ontheotherhand,Illumina(ILMNUS,Notrated)reporteda16%y-ysalesdeclineinChinatoUSD63mn,yetraiseditsChina

salesguidancebyUSD25mntoUSD200mnforFY25E,backedbyresilientcustomer

demand(forreagentsandsupportservice)despiteinstrumentimportrestrictionsinChina.

ResearchAnalysts

ChinaHealthCare&Pharmaceuticals

JialinZhang,CFA,CPA-NIHK

jialin.zhang@

+85222526134

ProductionComplete:2025-08-0806:40UTC

SeeAppendixA-1foranalystcertification,importantdisclosuresandthestatusofnon-USanalysts.

Nomura|Chinahealthcare8August2025

2

IntuitiveSurgical(ISRGUS,Notrated)managementmentionedthatChinaproceduresgrowthwasslightlyhigherthantheglobalaverage.

Fig.1:MNCs,2Q25Chinarevenuesummary

Company

Currencymn

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

AstraZeneca

USD

1,748

1,630

1,671

1,364

1,805

1,710

y-y

9%

13%

15%

-1%

3%

5%

Merck

USD

1,744

1,790

996

864

668

407

y-y

2%

-6%

-41%

-42%

-62%

-77%

Novartis

USD

1,000

1,100

1,000

800

1,200

1,000

y-y

25%

23%

19%

8%

17%

-1%

Sanofi

EUR

757

765

757

549

701

687

y-y

0%

-3%

4%

-15%

-7%

-10%

EliLilly

USD

376

395

460

429

451

466

y-y

1%

-1%

18%

14%

20%

18%

NovoNordisk

DKK

4,506

4,963

4,708

4,324

5,622

4,288

y-y

1%

11%

8%

27%

25%

-14%

Roche(drug)

CHF

796

813

675

642

925

777

y-y

0%

15%

-6%

-1%

16%

-4%

Roche(IVD)

CHF

584

689

626

503

465

458

y-y

-6%

3%

-1%

-9%

-22%

-34%

GEHealthcare

USD

597

583

564

616

593

563

y-y

-11%

-18%

-22%

-9%

-1%

-3%

SiemensHealthineers

EUR

595

611

687

618

615

620

y-y

-18%

-14%

-4%

-6%

3%

1%

Illumina

USD

78

75

75

80

72

63

y-y

-14%

-35%

-23%

1%

-8%

-16%

Sysmex

JPY

36,492

18%

19,522

17%

35,018

14%

27,460

6%

35,970

-1%

17,272

-12%

Source:Companydata,Nomuraresearch

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AppendixA-1

ThisreporthasbeenproducedbyNomuraInternational(HongKong)Ltd.(NIHK),HongKong.

SeeDisclaimersforNomuraGroupentitydetails.

AnalystCertification

I,JialinZhang,herebycertify(1)thattheviewsexpressedinthisResearchreportaccuratelyreflectmypersonalviewsaboutanyorallofthesubjectsecuritiesorissuersreferredtointhisResearchreport,(2)nopartofmycompensationwas,isorwillbedirectlyorindirectlyrelatedtothespecificrecommendationsorviewsexpressedinthisResearchreportand(3)nopartofmycompensationistiedtoanyspecificinvestmentbankingtransactionsperformedbyNomuraSecuritiesInternational,Inc.,NomuraInternationalplcoranyotherNomuraGroupcompany.

ImportantDisclosures

Onlineavailabilityofresearchandconflict-of-interestdisclosures

NomuraGroupresearchisavailableon

/research

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Importantdisclosuresmaybereadat

/research/m/DisclosuresorrequestedfromNomuraSecuritiesInternational

,Inc.Ifyouhaveanydifficultieswiththewebsite,pleaseemailgrpsupport@forhelp.

Theanalystsresponsibleforpreparingthisreporthavereceivedcompensationbaseduponvariousfactorsincludingthefirm'stotalrevenues,aportionofwhichisgeneratedbyInvestmentBankingactivities.Unlessotherwisenoted,thenon-USanalystslistedatthefrontofthisreportarenotregistered/qualifiedasresearchanalystsunderFINRArules,maynotbeassociatedpersonsofNSI,andmaynotbesubjecttoFINRARule2241restrictionsoncommunicationswithcoveredcompanies,publicappearances,andtradingsecuritiesheldbyaresearchanalystaccount.

NomuraGlobalFinancialProductsInc.(NGFP)NomuraDerivativeProductsInc.(NDP)andNomuraInternationalplc.(NIplc)areregisteredwiththeCommoditiesFuturesTradingCommissionandtheNationalFuturesAssociation(NFA)asswapdealers.NGFP,NDPI,andNIplcare

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44%havebeenassignedaNeutralratingwhich,forpurposesofmandatorydisclosures,isclassifiedasaHoldrating;58%ofcompanieswiththisratingareinvestmentbankingclientsoftheNomuraGroup*.0%ofcompanies(whichareadmittedtotradingonaregulatedmarketintheEEA)withthisratingweresuppliedmaterialservicesbytheNomuraGroup

3%havebeenassignedaReduceratingwhich,forpurposesofmandatorydisclosures,areclassifiedasaSellrating;0%ofcompanieswiththisratingareinvestmentbankingclientsoftheNomuraGroup*.0%ofcompanies(whichareadmittedtotradingonaregulatedmarketintheEEA)withthisratingweresuppliedmaterialservicesbytheNomuraGroup.

Asat30June2025.

*TheNomuraGroupasdefinedintheDisclaimersectionattheendofthisreport.

**AsdefinedbytheEUMarketAbuseRegulation

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