New stock outlook | Rare dual targets + global first, will Highlight Pharma "roll" out new stories in the competitive red sea track?

Recently, the main board of the Hong Kong Stock Exchange welcomed an innovative pharmaceutical company with great potential - Hangzhou Gaoguang Pharmaceutical Co., Ltd. (referred to as Gaoguang Pharmaceutical), with CICC and China-owned International serving as its joint sponsors. In the context of the domestic JAK inhibitor competition becoming increasingly fierce, Gaoguang Pharmaceutical has taken a unique path, becoming one of the few domestic innovative pharmaceutical companies that focus on both "autoimmune inflammation + central nervous system diseases" by leveraging its unique advantage of dual-target inhibitor with high selectivity and high brain penetration. Similar to many other 18A innovative drug companies, Gaoguang Pharmaceutical has no products approved for market yet, and the fastest development progress is in Phase III clinical trials. This IPO is not only due to the tight funds on hand but also the pressure of a 1.2 billion yuan performance-based agreement. Public information shows that Gaoguang Pharmaceutical has completed six rounds of financing, raising a total of around 662 million yuan, with the latest post-investment valuation at approximately 2.462 billion yuan. The company's shareholder list includes many well-known investment institutions, including Hankang Capital, AstraZeneca China, Kaitai Capital, Dr. Tan Fenlai, Yifeng Capital, Zeyue Venture Capital, Kangjun Capital, AIHC Capital, Zhuhai Huajin Capital, Infiniti Capital, and Hillhouse Capital. With two rare core assets in hand, can Gaoguang Pharmaceutical's IPO attract funding entry? What are the highlights of the research and development pipeline in the two major hot areas? The areas Gaoguang Pharmaceutical focuses on, autoimmune diseases and neurodegenerative diseases, both have significant market potential. Autoimmune diseases include diseases such as rheumatoid arthritis, ankylosing spondylitis, and atopic dermatitis, among others. The patient base is large, the treatment period is long, making it the world's second-largest drug market after tumors. Data shows that the global autoimmune market has grown from $116.9 billion in 2019 to $143.1 billion in 2024, and is projected to further expand to $179.5 billion by 2028. Represented by Alzheimer's disease and Parkinson's disease, neurodegenerative diseases are a heterogeneous group of diseases affecting the nervous system, with the core pathological feature being the progressive loss of central or peripheral neurons, severely impairing the patient's memory, cognition, behavior, sensory function, and motor control abilities. It is understood that due to the extremely complex pathogenesis and the natural barrier of the blood-brain barrier, the development cycle of new drugs related to neurology diseases is extremely long, with a high failure rate. According to public reports, the number of people suffering from Alzheimer's disease and other dementias in China is close to 17 million, and the number of Parkinson's disease patients has exceeded 5 million, becoming a significant and growing medical burden; the global market size in related areas is expected to reach $61 billion by 2025, and is projected to increase to $114.1 billion by 2035 under the push of trends such as an aging population. Gaoguang Pharmaceutical's research pipeline includes seven independently developed small molecule candidate drugs, with four drugs in clinical stages and three in preclinical stages. The biggest differentiating highlight is the TYK2/JAK1 dual-target inhibitor. JAK is an important non-receptor tyrosine kinase family, with JAK1 playing a core role in systemic inflammatory reactions, immune responses, and neurodevelopment, making it a hot target in new drug development for inflammatory, cancer, autoimmune, and other diseases. TYK2 mainly affects immune-related signal transduction, only mediating cell factors such as IL-IL-12 and type I interferon, and promoting the generation of inflammatory cell factors such as IL-IL-23, with minimal interference with other cell factors, making it have high drug safety. It is understood that most kinase inhibitors (including all approved or under-research JAK inhibitors) contain typical hydrogen bond donors. By innovatively removing this hydrogen bond donor, Gaoguang Pharmaceutical has successfully developed a kinase inhibitor with higher selectivity and blood-brain barrier penetration, making it the first of its kind among existing JAK inhibitors. With this technological breakthrough, the company can achieve higher safety in JAK inhibitors and effectively address the long-standing challenge of blood-brain barrier penetration in the treatment of neurodegenerative diseases. In the field of autoimmune diseases, the company's core product TLL-018 (ginogesetine) is a selective TYK2/JAK1 inhibitor, which is currently conducting two Phase III registration trials for chronic idiopathic urticaria (CSU) and rheumatoid arthritis (RA) in China; HL-300 is a potent, skin-only TYK2/JAK1/JAK2 inhibitor, being developed for moderate-to-severe atopic dermatitis (AD) topical use. In the field of neurodegenerative diseases, the company's core product TLL-041/BHV-8000 is a brain-penetrating, selective TYK2/JAK1 inhibitor for the treatment of neuroinflammatory diseases including Parkinson's and Alzheimer's diseases. In addition, the company's other pipelines also include HL-400 (a brain-penetrating NLRP3 inhibitor for the treatment of CNS diseases) and HL-500 (a LRRK2 inhibitor for the treatment of Parkinson's disease). With the advantage of a dual-target, can Gaoguang Pharmaceutical break through the red sea? The competition in the domestic JAK inhibitor race is becoming increasingly fierce. The first-generation non-selective products (such as Novartis tofacitinib, Pfizer tofacitinib, and Eli Lilly baricitinib) can simultaneously inhibit multiple targets including JAK1, JAK2, JAK3, and TYK2, although they are effective, but can interfere with normal immune function, leading to adverse reactions such as infections, anemia, and abnormal blood lipids, which limited their clinical use. The second-generation highly selective inhibitors (such as AbbVie upadacitinib and Pfizer abrocitinib) can precisely target specific subtypes, inhibiting disease-related signaling pathways while reducing the impact on other cell factors, significantly enhancing safety. However, even with the safety advantages of second-generation products, there are already several second-generation highly selective JAK inhibitors approved for market in China, and over 10 JAK inhibitors are still in clinical trials, showing the competitiveness in the field. Gaoguang Pharmaceutical's core product TLL-018 (ginogesetine) is the only highly selective TYK2/JAK1 inhibitor in the world with a rare status, and the development progress puts it in the forefront globally. Since 2026, TLL-018's clinical progress has been showing positive signs. In January, the drug achieved positive topline data in a Phase III clinical trial for chronic idiopathic urticaria (CSU), with mid-term analysis meeting the primary endpoint, showing significantly better efficacy than placebo in major and multiple secondary endpoints, while also demonstrating good safety and tolerability; In April, the Phase III clinical trial for rheumatoid arthritis (RA) using TLL-018 achieved the primary efficacy analysis, meeting the main and all secondary endpoints, showing superior efficacy to tofacitinib in various indicators such as ACR50, ACR20/70, DAS28 3.2, and DAS28 < 2.6 in patients at 24 weeks. Based on the positive data, TLL-018 has been planned to be included in a breakthrough therapy program for the treatment of rheumatoid arthritis on June 24, 2026. For future timelines, Gaoguang Pharmaceutical plans to submit an NDA application for rheumatoid arthritis indication in China by the end of 2026, potentially becoming one of the first domestically developed JAK inhibitors to be approved; the company also plans to submit a marketing application for the CSU indication in the first quarter of 2027, potentially becoming the world's first JAK inhibitor for the treatment of CSU. Furthermore, for moderate-to-severe atopic dermatitis, the company plans to start a Phase II/III registration trial directly in China in the second quarter of 2026 and received IND approval in May 2026; expansion into the indication for systemic lupus erythematosus is also in planning, with an IND application approved in August 2023. Currently, there is still a blank market in the global JAK1/TYK2 dual-target inhibitor market, and many related pipelines are in the early clinical stages. In this context, TLL-018 has established a certain leading advantage and has the potential to seize the market opportunity. However, it should be noted that TLL-018 has only conducted comparative studies against the first-generation JAK inhibitor tofacitinib and has not yet conducted head-to-head clinical trials with other JAK inhibitors. Its overall competitive advantage compared to existing standard therapies, long-term efficacy, safety, and ultimate market positioning require further clinical practice and research for continuous validation and evaluation. Another core product of Gaoguang Pharmaceutical for neurodegenerative diseases, TLL-041, also has shown promising clinical data. It is the world's first and only brain-penetrating selective TYK2/JAK1 inhibitor, with the triple unique advantages of high brain penetration, high selectivity, and biometric mechanism validation. Clinical studies have shown that through the kinase spectrum analysis of 358 human kinases, TLL-041 has a selection for TYK2 and JAK1 over JAK2 and JAK3 by more than 20 times, with very low off-target activity, effectively avoiding the blood system and immune suppression risks associated with broad JAK inhibitors. Preclinical studies have confirmed that after oral administration, significant drug concentrations are shown in brain tissues and cerebrospinal fluid, and dose-dependent neuroprotective effects were observed in a human neuronal model induced by dsRNA-induced neuroinflammation, solving the previous pain point of difficulty in directly measuring drug concentrations in brain tissues and evaluating the association between drug efficacy and clinical endpoints. In terms of commercial rights, TLL-041 has already licensed its overseas rights to Biohaven. According to their cooperation agreement, Gaoguang Pharmaceutical will receive a $10 million initial payment, 721,136 shares of Biohaven common stock, and up to $950 million in clinical and commercial milestones, plus tiered royalties on sales after the product is launched. In August 2025, the company received the first milestone payment for this project, amounting to $15 million. Currently, Biohaven has initiated a global Phase II/III registration study for early Parkinson's disease, marking the first known application of TYK2/JAK1 inhibitors in neurodegenerative diseases. In China, Gaoguang Pharmaceutical completed pharmacokinetic bridging studies for TLL-041 in March 2026 and plans to participate in Biohaven's global registration study for Parkinson's disease next and submitted a clinical research plan for the registration trial to the National Medical Products Administration in December 2025. According to the prospectus, for the three months ending March 31 in 2024, 2025, and 2026, Gaoguang Pharmaceutical reported losses of approximately 226 million yuan, 312 million yuan, and 73.121 million yuan respectively, with research and development expenses of 127 million yuan and 151 million yuan for 2024 and 2025, respectively. The company also faces significant cash flow pressure, with only 256 million yuan in cash and cash equivalents at the end of 2025, highlighting the urgency of IPO financing. In addition, previous financing arrangements include investor redemption rights. If the company does not achieve a qualified listing by the end of 2027, investors have the right to redeem at the original investment capital plus a 20% annual interest rate. As of the end of March 2026, the fair value of this financial instrument has reached 1.206 billion yuan, all of which is included in current liabilities. If the listing process is delayed, the pressure from the huge redemption buyback may threaten the company's continued operating capability. Overall, Gaoguang Pharmaceutical's rare pipeline is quite remarkable, with TLL-018 showing positive clinical data in the past and already receiving milestone upfront payments, its potential commercial value has been recognized by the market. If TLL-018 can outperform in future head-to-head trials, or if TLL-041 performs well in clinical trials for Parkinson's disease in the future, both products have the potential to receive significant valuation premiums and are worth continued market attention.