Investment Rating - The report maintains a "Buy" rating for the company [3][11]. Core Insights - The company has received multiple product approvals and is set to disclose significant clinical data, with its first domestic TROP2 ADC expected to lead clinical iterations [3][11]. - Merck's continued investment overseas indicates the emerging potential of the next-generation blockbuster products [11]. Financial Summary - Revenue projections for 2024-2026 have been adjusted to 1.732 billion, 1.670 billion, and 2.666 billion RMB respectively, reflecting a slight decrease in 2025 expectations [11]. - The company reported a revenue increase from 804 million RMB in 2022 to 1.540 billion RMB in 2023, representing a 91.6% growth [7]. - The gross profit is expected to rise from 759 million RMB in 2023 to 1.103 billion RMB in 2024 [7]. Product Development - The core product, Lukanasatuzumab, was approved for market release in November 2024, targeting second-line and above triple-negative breast cancer (TNBC) [11]. - Additional indications for Lukanasatuzumab are in the NDA stage, with approvals anticipated in 2025 for 3L EGFRm NSCLC and 2L EGFRm NSCLC [11]. - Other products, including Tagolizumab and biosimilars, are also set for approval in early 2025 [11]. Clinical Trials - The company is expected to disclose critical clinical data from ongoing trials, including registration trials for Lukanasatuzumab in various indications [11]. - Merck has initiated 12 key clinical trials for Lukanasatuzumab, indicating its importance in the oncology field [11].

Investment Rating - The report maintains a "Buy" rating for Kelun-Biotech (6990 HK) with a target price of HKD 252 8, representing a potential upside of 48 8% from the latest closing price of HKD 169 9 [3][7] Core Views - Kelun-Biotech has entered a new commercialization phase with the approval of two key self-developed products: sac-TMT (Jiatailai®), the first domestically developed TROP2 ADC for TNBC, and KL-A167 (Ketailai®), a PD-L1 monoclonal antibody for nasopharyngeal carcinoma [1] - Sac-TMT has a strong competitive moat with multiple indications in breast and lung cancers, including approved use for TNBC and NDA submission for EGFRmt NSCLC, with 4 breakthrough therapy designations in China [2] - The company has a robust clinical pipeline with HER2 ADC A166 and cetuximab A140 under NDA review, and 5 other ADCs in Phase 1 trials, demonstrating its R&D platform strength [2][6] - A mature commercialization team of ~400 people has been established to support product launches [2] Financial Projections - Revenue is forecasted to grow from RMB 1 603 billion in 2024 to RMB 2 889 billion in 2026, representing a CAGR of 34 2% [7] - Gross margin is expected to improve significantly from 49 28% in 2023 to 92% in 2026 [9] - The company is projected to turn profitable in 2026 with net income of -RMB 121 41 million, improving from -RMB 574 13 million in 2023 [9] Valuation - The DCF valuation stands at RMB 49 12 billion, implying a target price of RMB 234 1 (HKD 252 8) [7] - The stock trades at -111 94x 2024E P/E and 19 26x 2024E P/B [9]

Investment Rating - The report assigns an "Accumulate" rating for the company, marking it as the first coverage [1]. Core Viewpoints - The company has a strong ADC platform technology and its core product, TROP2 ADC, has been approved for market [1]. - The company has established a comprehensive ADC research and development platform, OptiDC, which supports the entire development process from research to production [1][13]. - The company has multiple products in clinical development, with significant partnerships and collaborations enhancing its commercial prospects [1][3]. Summary by Sections Company Overview - Sichuan Kelun-Botai Biopharmaceutical Co., Ltd. focuses on innovative biopharmaceuticals and has established three core platforms for ADC, large molecules, and small molecules [13][21]. - The company has a strong management team with extensive industry experience and a concentrated shareholding structure [15][19]. ADC Development - The ADC market is projected to grow significantly, with the global market expected to reach $63.8 billion by 2030, and the Chinese market projected to reach RMB 68.9 billion by 2030 [54]. - The company has five ADCs in clinical research, with A166 (HER2-ADC) and SKB264 (TROP2-ADC) already in the NDA stage [59][60]. Product Pipeline - The company has four NDA applications accepted by the CDE, including A167 (PD-L1 monoclonal antibody), A166 (HER2 ADC), A140 (biosimilar of cetuximab), and SKB264 (TROP2 ADC) [2]. - The company has established a strong pipeline with over ten clinical candidates, including several in critical trials or NDA registration stages [21]. Financial Projections - The company is expected to generate revenues of RMB 1.217 billion, RMB 1.654 billion, and RMB 2.476 billion for the years 2024, 2025, and 2026, respectively, with net profits projected to be -RMB 720 million, -RMB 606 million, and -RMB 415 million [3].

Investment Rating - The investment rating for the company is "Buy" with a current price of HKD 196.00 and a reasonable value of HKD 205.82 [2]. Core Views - The report highlights that the approval of SKB264 as the first domestically developed original drug for treating advanced or metastatic triple-negative breast cancer (TNBC) marks a significant milestone in the company's development process [2]. - The company is expected to achieve substantial revenue growth, with projected revenues of RMB 16.55 billion, RMB 18.06 billion, RMB 24.23 billion for the years 2024 to 2026 respectively [2]. - The report emphasizes the successful progress of the company's drug pipeline, particularly in the TROP2 ADC platform, which is anticipated to drive revenue growth [2]. Summary by Sections Company Overview - The company has made significant advancements in its drug development pipeline, particularly with SKB264, which has received approval for treating advanced or metastatic TNBC [2]. - The report notes that the company has successfully submitted two New Drug Applications (NDA) for EGFR-TKI in China, indicating a strong domestic market presence [2]. Financial Projections - Revenue for 2022 was RMB 804 million, with a projected increase to RMB 1.54 billion in 2023, and further growth to RMB 1.655 billion and RMB 1.806 billion in 2024 and 2025 respectively [4]. - The report forecasts a significant growth rate of 2,387.3% in 2022, followed by 91.6% in 2023, and a more moderate growth rate of 7.4% in 2024 [4]. Profitability Metrics - The report indicates that the company is currently operating at a loss, with a projected net profit of -RMB 728 million in 2024 and -RMB 919 million in 2025 [4]. - The gross margin is expected to improve from 65.6% in 2022 to 71.3% by 2026, reflecting better operational efficiency [4]. Market Position - The company is positioned as a leader in the domestic TROP2 ADC market, with expectations for significant market share growth as new drugs are launched [2]. - The report suggests that the company’s innovative drug pipeline and successful clinical trials will enhance its competitive edge in the biopharmaceutical industry [2].

Investment Rating - The report maintains a "Buy" rating for the company [2][4]. Core Insights - The company's core product, TROP2 ADC, has received approval for use in treating adult patients with unresectable locally advanced or metastatic triple-negative breast cancer (TNBC) who have previously undergone at least two systemic treatments [2]. - The approval is based on positive results from the randomized, controlled Phase III OptiTROP-Breast01 study, which showed significant improvements in progression-free survival (PFS) and overall survival (OS) compared to chemotherapy [2]. - The company is advancing multiple indications for its products, with several new drug applications (NDAs) submitted and expected approvals for additional products between late 2024 and early 2025, marking the start of its commercialization process [2]. - Revenue projections for the company are estimated at 1.993 billion RMB in 2024, 2.026 billion RMB in 2025, and 3.085 billion RMB in 2026, with net losses expected to narrow over the same period [2]. Financial Summary - Revenue for 2023 is reported at 1.54 billion RMB, with a growth rate of 91.6% [7]. - The projected net profit for 2024 is -138 million RMB, improving to -618 million RMB in 2025, and -133 million RMB in 2026 [11]. - The earnings per share (EPS) is expected to improve from -2.58 RMB in 2023 to -0.60 RMB in 2026 [11]. - The company’s gross margin is projected to increase from 49.28% in 2023 to 74.05% in 2026, indicating improved profitability [11].

Investment Rating - The report initiates coverage on Kolun Botai (6990.HK) with a "Buy" rating and recommends it as a top pick in the ADC industry, setting a target price of HKD 230 [3][6][15]. Core Insights - Kolun Botai is recognized as a leader in the Chinese ADC industry, with significant international collaboration, particularly with Merck, which has resulted in multiple licensing agreements totaling over USD 10 billion [4][15]. - The company's core asset, SKB264 (TROP2 ADC), is positioned as a global best-in-class product with promising clinical data and a robust pipeline, including several NDA submissions expected in the near future [5][39][44]. - The anticipated commercialization of multiple products in the domestic market is set to begin, with approvals expected for SKB264 and other key products by late 2024 and early 2025 [6][39][45]. Financial Projections - Revenue projections for Kolun Botai are estimated at RMB 1.895 billion for 2024, RMB 1.675 billion for 2025, and RMB 2.877 billion for 2026, with net losses expected to be RMB 351 million, RMB 1.042 billion, and RMB 255 million for the respective years [6][11][13]. - The report utilizes a DCF valuation model with a WACC of 10.8% and a perpetual growth rate of 3%, leading to a target market capitalization of HKD 51.3 billion [6][11]. Product Pipeline - Kolun Botai has over 10 products in clinical stages, with four products, including SKB264 and A166, expected to receive market approval in the near term [39][44]. - The company is actively conducting multiple Phase III clinical trials for its key products, indicating a strong commitment to advancing its pipeline [44][45]. Shareholder Structure - The major shareholder, Kolun Pharmaceutical, holds a 67.4% stake in Kolun Botai, while Merck is the second-largest shareholder with a 6.0% stake [23][24]. Management Team - The management team includes experienced professionals from various pharmaceutical backgrounds, with a strong focus on strategic planning and operational decision-making [26][30][36].

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 1,382,791 thousand, representing a 32.2% increase compared to RMB 1,046,226 thousand in the same period of 2023[7]. - Gross profit for the same period was RMB 1,076,690 thousand, a significant increase of 59.4% from RMB 675,660 thousand in 2023[7]. - The company reported a profit of RMB 310,226 thousand for the period, compared to a loss of RMB 31,130 thousand in 2023[7]. - Adjusted profit for the period was RMB 385,636 thousand, a remarkable increase of 1,068.0% from RMB 33,017 thousand in the prior year[7]. - Cash and financial assets as of June 30, 2024, totaled RMB 2,885,166 thousand, reflecting a 15.9% increase from RMB 2,488,349 thousand at the end of 2023[7]. - Other net income for the six months ended June 30, 2024, was RMB 94.40 million, up from RMB 24.12 million in 2023, mainly due to increased government subsidies and interest income[123]. - Financial costs for the six months ended June 30, 2024, were RMB 2.51 million, a decrease of 96.8% compared to RMB 78.73 million for the same period in 2023[130]. - Profit for the six months ended June 30, 2024, increased by 1,096.6% to RMB 310.23 million, up from a loss of RMB 31.13 million for the same period in 2023[135]. - Cash and cash equivalents increased to RMB 2,130.30 million as of June 30, 2024, from RMB 1,528.77 million as of December 31, 2023, reflecting the net proceeds from the placement and milestone payments from Merck[140]. - Current assets net value as of June 30, 2024, was RMB 2,604.16 million, a 53.4% increase from RMB 1,697.48 million as of December 31, 2023[145]. Research and Development - Research and development expenses rose to RMB 652,337 thousand, up 33.0% from RMB 490,347 thousand in the previous year[7]. - The company has over 30 drug candidates in development, focusing on oncology and other therapeutic areas[31]. - The company is actively exploring the clinical value of A167 in combination therapies to maximize its potential[69]. - The company is developing new ADC designs to expand its ADC product portfolio, including alternatives to chemotherapy-based cancer therapies[156]. - The company aims to enhance end-to-end drug development capabilities and plans to incorporate AI into various R&D processes to improve efficiency[160]. - The company has established three core platforms focusing on ADC, macromolecule, and small molecule technologies to address medical needs in oncology, autoimmune diseases, and metabolic diseases[91]. - The ongoing research focuses on innovative non-oncology candidates for chronic diseases with unmet treatment needs[90]. Clinical Trials and Drug Development - The sac-TMT product showed a median progression-free survival (PFS) of 6.7 months in a Phase III study, compared to 2.5 months for chemotherapy, indicating a 68% reduction in the risk of disease progression or death[11]. - The overall response rate (ORR) for sac-TMT was 45.4%, significantly higher than the 12% ORR for chemotherapy[11]. - The company has initiated a Phase III registration study for sac-TMT in HR+/HER2- breast cancer patients, following breakthrough therapy designation from the National Medical Products Administration[11]. - A new drug application for sac-TMT in treating EGFR mutation-positive NSCLC has been accepted for priority review by the drug regulatory authority[12]. - The ORR for patients receiving sac-TMT and KL-A167 Q3W was 48.6%, with a DCR of 94.6% and a median PFS of 15.4 months[15]. - For patients receiving sac-TMT and KL-A167 Q2W, the ORR was 77.6% and the DCR was 100%, with the median PFS not yet reached[15]. - A166 has achieved its primary endpoint in the pivotal phase 2 trial for 3L+ advanced HER2+ breast cancer, with an NDA submitted in May 2023[18]. - The NDA for A167 as a treatment for RM-NPC has been accepted, and a registration phase 3 trial for A167 in 1L NPC is underway[21]. - The company anticipates launching sac-TMT and A166 in the Chinese market in the second half of 2024 or the first half of 2025[21]. - The company is actively exploring sac-TMT for other solid tumors, including GC, EC, CC, OC, UC, CRPC, and HNSCC[15]. Collaborations and Partnerships - The collaboration with Merck includes the development of multiple ADC assets, with ten global phase 3 clinical studies initiated for sac-TMT[23]. - The company recorded a total of $90.0 million in milestone payments from Merck for multiple collaboration pipelines in the first half of the year, equivalent to approximately RMB 641.4 million[27]. - Merck will pay the company $37.5 million for the exclusive option exercise of SKB571, with additional milestone payments and tiered royalties based on net sales after commercialization[24]. - The company has established strategic partnerships with Merck and other collaborators for the development of multiple ADC assets, enhancing its global market potential[39]. - The company is exploring new global collaboration opportunities to maximize the commercial value of its pipeline, focusing on both short-term and long-term growth[164]. Commercialization and Market Strategy - The company has established a mature commercialization team to prepare for the marketing and commercialization of strategic products[21]. - The company plans to accelerate the development of SKB315 in the Chinese market, given the large patient population with gastric cancer[25]. - The company is positioned to expand its commercialization infrastructure and market channels, leveraging its parent company's extensive industry experience[38]. - The commercialization team is expected to expand to approximately 400 members by the end of 2024, focusing on pre-launch preparations and rapid distribution post-NDA approval[161]. - The company is actively recruiting talent with a strong background in oncology, particularly for indications such as BC, NSCLC, GI cancers, and NPC[161]. Awards and Recognition - The company received the "Best IPO Award" at the 2023 China Financing Awards in July 2024, highlighting its successful public offering[113]. - The company was awarded the "Excellence in ESG Governance Performance Award" by Ming Pao in June 2024, reflecting its commitment to sustainable development[114]. - The company was awarded the title of "ADC Pioneer Enterprise" by TONACEA in April 2024[111]. Corporate Governance and Structure - The company has established a comprehensive ESG governance structure to enhance its ESG responsibilities and sustainability[28]. - The company has obtained high-tech enterprise certification, allowing it to enjoy a preferential income tax rate of 15% from 2020 to 2025[132]. - The company has no contingent liabilities as of June 30, 2024[151]. - The company has no asset pledges as of June 30, 2024[150]. - The company has not proposed any interim dividend for the six months ending June 30, 2024[179].

Investment Rating - The report maintains a "Buy" rating for Kelun-Botai Biopharmaceutical (06990.HK) [2] Core Insights - The company is expected to launch several core products in the Chinese market by the second half of 2024 or the first half of 2025, including sac-TMT, A166, A167, and A140 [6] - The company has established a strong pipeline with over ten clinical-stage candidates, four of which are in the NDA application stage, indicating significant growth potential [6] - The revenue forecast for 2024-2026 is projected at 17.44 billion, 16.20 billion, and 26.88 billion RMB respectively, reflecting a robust growth trajectory [6] Financial Performance - In the first half of 2024, the company reported revenue of 1.383 billion RMB, a year-on-year increase of 32.2%, primarily driven by milestone payments and collaboration income from a partnership with Merck [4] - Gross profit for the same period reached 1.077 billion RMB, up 59.4% year-on-year, with a net profit of 310 million RMB, compared to a loss of 31.13 million RMB in the previous year [4] - R&D expenses increased by 33% year-on-year to 652 million RMB [4] Clinical Development - The NDA application for Trop2 ADC has been accepted, and the HER2 ADC has also submitted an NDA application to the CDE [4] - Merck has initiated 10 global Phase III clinical trials for SKB264 (MK-2870)-trop2 ADC, targeting various cancer types including triple-negative breast cancer and non-small cell lung cancer [5] - The company has a rich pipeline of innovative products, including SKB315 (MK-1200) and SKB410 (MK-3120), currently in clinical trials [6] Market Position - The company has formed a mature commercialization team to prepare for the marketing and commercialization of strategic products [6] - The ADC overseas value is gradually becoming apparent, indicating a strong market position [6]

科伦博泰生物-B（06990.HK） 与默沙东达成双抗 ADC 合作，sac-TMT 新适应症申请上市 科伦博泰发布 2024 年中期业绩。公司实现收入 13.83 亿元，同比增长 32.2%； 其中包含收到的默沙东合作付款 9000 万美元。实现利润 3.1 亿元，2023 年同期 为亏损 3113 万元，扭亏为盈；实现经调整盈利 3.86 亿元，2023 年同期为 3302 万元。 科伦博泰宣布就芦康沙妥珠单抗递交新适应症上市申请。本次申报适应症为治疗 接受(EGFR-TKI)和含铂化疗治疗后病情出现进展的局部晚期或转移性 EGFR 突变 NSCLC 成人患者，并被拟纳入优先审评审批程序。 科伦博泰与默沙东相关合作项目达成进展。默沙东将就 SKB571 项目行使独家选 择权，并向科伦博泰支付 3750 万美元，且待达致特定开发及销售里程碑后，向科 伦博泰支付进一步里程碑付款，并待 SKB571 商业化后支付按净销售额计算的分 级特许权使用费。科伦博泰将保留在中国内地、香港及澳门开发、使用、制造及商 业化 SKB571 的权利。此外默沙东将向科伦博泰退还 SKB315 项目的开发、使用、 制造及商业化 SK ...

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 238.7 HKD, compared to the last closing price of 169.9 HKD [1][3]. Core Insights - The commercialization of the company is imminent, with steady progress in collaboration with Merck. The core product, sac-TMT, is expected to be the first domestic TROP2 ADC approved for treating triple-negative breast cancer [1][2][3]. - The company reported a revenue of 1.38 billion RMB for the first half of 2024, representing a year-on-year growth of 32.2%. Gross profit reached 1.08 billion RMB, up 59.4% year-on-year, while R&D expenses increased by 33.0% to 650 million RMB. Adjusted net profit surged to 390 million RMB, reflecting a remarkable growth of 1086.0% [2][3]. - The company plans to establish a mature commercialization team in China, aiming to expand to 400-500 personnel by the end of 2024, focusing on the local market [2][3]. Financial Summary - Revenue projections for 2024, 2025, and 2026 are estimated at 1.58 billion RMB, 1.62 billion RMB, and 2.29 billion RMB, respectively, with a forecasted net profit turning positive by 2027 [3][4]. - The company’s total assets as of 2023 are 3.51 billion RMB, with current assets of 2.81 billion RMB and cash reserves of 1.53 billion RMB [6][7]. - The report indicates a significant increase in cash flow from financing activities, amounting to 2.38 billion RMB in 2023, which is crucial for supporting ongoing operations and development [6][7].