Investment Rating - The report maintains a "Buy" rating for the company, Legend Biotech (LEGN US), with a target price raised to $74.00, indicating a potential upside of 100% from the current price of $37.00 [2][12]. Core Insights - The company achieved adjusted profitability in Q2 2025, driven by strong sales growth of Carvykti, with sales reaching $439 million, marking a year-over-year increase of 19% and a sequential increase of 136% [6]. - The report highlights optimistic sales expectations for Carvykti due to capacity expansion, improved production efficiency, and accelerated demand from the community healthcare market [2][6]. - The company is projected to reach operational breakeven by the end of 2025 and net profit breakeven in 2026 [6]. Financial Performance - Revenue forecasts for 2025, 2026, and 2027 have been adjusted upwards by 1-6%, reflecting a more optimistic outlook for Carvykti sales driven by new capacity and market penetration [6][7]. - The projected revenues for 2025, 2026, and 2027 are $1,016 million, $1,436 million, and $1,811 million respectively, with gross profit margins improving to 62.4%, 64.3%, and 66.8% [13][14]. - The company reported a net loss of $127.5 million in Q2 2025, but adjusted net profit was achieved after excluding non-operating items [6][13]. Market Position and Growth Potential - The report emphasizes that the current stock price is significantly undervalued, and the company is well-positioned for growth with a projected peak sales potential of $6.9 billion for Carvykti [6][7]. - The expansion of production capacity in the U.S. and Belgium is expected to enhance annual sales potential to over $4 billion [6]. - The report notes that the number of authorized treatment centers in the U.S. has increased to 123, improving community accessibility for Carvykti [6].

Financial Data and Key Metrics Changes - CarVicti net trade sales reached approximately $439 million, representing a 136% increase year over year and a 19% increase from the first quarter [8][17] - Total revenues were RMB 255 million, driven by collaboration revenue growth of 136% year over year [30] - The company reported a net loss of RMB 10 million but achieved RMB 10 million in adjusted net income after excluding unrealized foreign exchange losses [30] - Operating loss improved from RMB 41 million to RMB 22 million year over year, indicating enhanced operational efficiency [30] Business Line Data and Key Metrics Changes - U.S. net trade sales of CarVicti were $358 million, growing 114% year over year and 13% quarter over quarter, with nearly 60% utilization in earlier line settings [18][21] - Outside the U.S., sales reached $81 million, a fourfold increase year over year and a 59% increase quarter over quarter, driven by expansion in Germany, Switzerland, Austria, and Brazil [19] Market Data and Key Metrics Changes - The company has treated over 7,500 patients with CarVicti, marking it as the strongest CAR T launch to date [8][16] - The number of authorized treatment centers in the U.S. has increased to 123, with significant expansion in community and regional hospitals [22][27] Company Strategy and Development Direction - The company aims to achieve operational breakeven for CarVicti by 2025 and company-wide profitability by 2026, excluding unrealized foreign exchange gains or losses [9][30] - The company is focused on solidifying its leadership in cell therapy and expanding into new indications, including solid tumor programs [14][15] - The company is investing in a new research facility in Philadelphia to enhance its capabilities in innovative therapies [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the FDA's decision to remove risk evaluation and mitigation strategies for CAR T therapies, which is expected to improve patient experience and access [9] - The company anticipates continued strong performance for CarVicti, supported by recent long-term survival data presented at ASCO [21][30] Other Important Information - The company maintains a strong cash position of approximately $1 billion, allowing for continued investment in its core differentiators in cell therapy [16][32] - The manufacturing success rate remains at 97%, which is believed to be the highest in the CAR T industry [20] Q&A Session Summary Question: Update on interim readouts from CARDISUDE V and VI - Management is monitoring events closely and is in discussions with the FDA about using MRD as a dual primary endpoint [36] Question: Community oncology expansion efforts - Approximately 70% of patients come from the community setting, and over half of patients are administered in outpatient settings [41][43] Question: Breakdown of treated patients in early line settings - Nearly 60% of orders are from the second through fourth line population, indicating significant growth potential [47] Question: Impact of recent efficacy data from a competitor - Management emphasized that CarVicti is best in class with demonstrated overall survival benefits, differentiating it from competitors [63] Question: Enrollment progress for CAR T2 VI - Enrollment is progressing well, with global completion expected soon, and confidence in driving capacity expansion remains high [68][70] Question: Future demand and supply dynamics - The company plans to drive both supply and demand simultaneously, with increasing contributions expected from Europe [83] Question: Community adoption and FACT accreditation - Efforts are underway to lift the requirement for FACT accreditation, facilitating broader access to CAR T therapies [90][91]

Financial Data and Key Metrics Changes - CarVicti net trade sales reached approximately $439 million, representing a 136% increase year over year and a 19% increase from the first quarter [7][17] - Total revenues were RMB 255 million, driven by collaboration revenue growth of 136% year over year [30] - The company reported a net loss of RMB 10 million but achieved RMB 10 million in adjusted net income after excluding non-core items [30] - Operating loss improved from RMB 41 million in the same period last year to RMB 22 million [30] - Gross margin on net product sales was 57% [30] Business Line Data and Key Metrics Changes - CarVicti's U.S. net trade sales were $358 million, growing 114% year over year and 13% quarter over quarter [18] - Outside the U.S., sales were $81 million, which is four times the amount from the same period a year ago, representing a 59% increase quarter over quarter [19] Market Data and Key Metrics Changes - Over 60% of CarVicti utilization is now in earlier line settings [8] - The company has treated over 7,500 patients with CarVicti, marking it as the strongest CAR T launch to date [7][16] Company Strategy and Development Direction - The company aims to achieve operational breakeven for CarVicti by 2025 and company-wide profitability in 2026, excluding unrealized foreign exchange gains or losses [8][30] - The company is focused on solidifying its leadership in cell therapy and expanding into new indications such as solid tumor programs [14][15] - A new research facility is being built in Philadelphia to focus on in vivo delivery, enhancing innovation capabilities [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the FDA's decision to remove risk evaluation and mitigation strategies for approved CAR T therapies, which is expected to improve patient experience and access [8] - The company anticipates continued strong performance for CarVicti, driven by recent long-term survival data presented at ASCO [21][28] Other Important Information - The company has a cash position of approximately $1 billion, allowing for continued investment in core differentiators in cell therapy [16][32] - Manufacturing success rate remains at 97%, which is believed to be the highest in the CAR T industry [20] Q&A Session Summary Question: Update on interim readouts from CARDISUDE V and VI - Management is monitoring events closely and is in discussions with the FDA about using MRD as a dual primary endpoint [37][38] Question: Community oncology efforts and Virginia Oncology Associates - Virginia Oncology Associates is a key milestone for community adoption, having previously administered CAR T therapies and is part of the McKesson network [39] Question: Revenue contribution from community expansion efforts - Approximately 70% of patients come from the community setting, with over half of patients administered in outpatient settings [42][43] Question: Breakdown of treated patients in early line settings - Nearly 60% of orders are from the second through fourth line population, which is expected to grow significantly [48] Question: Impact of recent efficacy data from a competitor - Management emphasized that CarVicti is best in class with demonstrated overall survival benefits, differentiating it from competitors [63] Question: Future demand and supply dynamics - The company plans to drive both supply and demand simultaneously, with increasing contributions expected from Europe [83][85] Question: Novartis commercial supply ramp-up - Novartis is expected to reach full capacity by the end of the year, contributing to growth [107] Question: Impact of recent tariff changes - The company believes any potential exposure to tariffs will not be material based on current evaluations [103]

August 11, 2025 Second Quarter 2025 Financial Results & Corporate Update This presentation is for investor relations purposes only - Not for product promotional purposes 1 Agenda | 1 | Opening Remarks | | --- | --- | | 2 | Q2 2025 Highlights & Recent Accomplishments | | 3 | Our Pipeline | | 4 | Capitalizing on Market Leadership | | 5 | CARVYKTI® Performance Overview | | 6 | Financial Performance | | 7 | Q&A | 2 This presentation is for investor relations purposes only - Not for product promotional purposes ...

Core Insights - Legend Biotech Corporation reported strong second quarter 2025 financial results, highlighting the success of CARVYKTI in treating relapsed and refractory multiple myeloma, with one-third of patients remaining progression-free for five years [2][6][10]. Financial Performance - CARVYKTI net trade sales reached approximately $439 million in Q2 2025, marking the strongest single period of sales for any CAR-T therapeutic to date [6][11]. - Total revenue for the three months ended June 30, 2025, was $255.1 million, compared to $186.5 million for the same period in 2024, reflecting a significant increase [15]. - Collaboration revenue increased to $219.7 million in Q2 2025 from $93.3 million in Q2 2024, driven by CARVYKTI sales [11][15]. - License revenue decreased to $35.3 million in Q2 2025 from $90.8 million in Q2 2024, primarily due to the timing of milestone achievements [11][15]. - Adjusted net income for Q2 2025 was $10.1 million, compared to an adjusted net loss of $2.5 million in Q2 2024 [11][26]. Regulatory Developments - The FDA removed Risk Evaluation and Mitigation Strategies (REMS) for CARVYKTI and updated product labeling to reduce certain monitoring requirements for patients [3]. Clinical Advancements - Over 7,500 patients have been treated with CARVYKTI to date, with positive long-term outcomes presented at the 2025 ASCO Annual Meeting [6][7]. - The CARTITUDE-1 study demonstrated that one-third of patients remained progression-free for five years, reinforcing the therapy's durability [2][6]. - New data from the Phase 3 CARTITUDE-4 study and preliminary results from LB2102 and LB1908 studies were also presented, showcasing ongoing innovation in the company's pipeline [7]. Cash Position - As of June 30, 2025, the company reported cash and cash equivalents of $1.0 billion, providing a financial runway into 2026 [6][11].

Core Viewpoint - King’s Ray Biotechnology (01548.HK) reported a net profit of $2.962 billion for the fiscal year 2024, a significant increase of 3202.19% year-on-year, marking a turnaround from losses [2] Financial Performance - The $3.2 billion one-time gain was attributed to accounting maneuvers, specifically the deconsolidation of subsidiary Legend Biotech (LEGN.NASDAQ) [3] - After excluding this gain and a $124 million fair value loss from another subsidiary, the adjusted net profit for King’s Ray's non-cell therapy business remained flat compared to 2023 [4] - The CDMO business revenue plummeted by 37.9%, while synthetic biology revenue grew by 24.6% to $53.7 million, but this only accounted for less than 10% of total revenue [4] Market Valuation - Following the deconsolidation, Legend Biotech's market valuation reached $7.8 billion on NASDAQ, while King’s Ray's market cap was only $4.7 billion, less than 60% of Legend's [5] - The valuation disparity reflects differing market perceptions of the core values of both companies, with Legend's valuation driven by the explosive growth of its product Carvykti, which achieved sales of $963 million in 2024, a 92.7% increase [5] Business Challenges - King’s Ray faces dual challenges: the ongoing deterioration of its CDMO business and growth bottlenecks in synthetic biology [9] - The CDMO business saw a 37.9% revenue decline, with operating losses widening by 46% due to low capacity utilization and high expansion costs in North America [9] - Cash flow remains a concern, with operating cash flow netting only $75.6 million, representing just 2.55% of net profit, indicating significant short-term debt repayment pressure [9] Future Outlook - The resolution of the valuation dilemma for King’s Ray and Legend Biotech hinges on capacity expansion and pipeline progress [11] - Legend Biotech's collaboration with Johnson & Johnson aims to achieve an annual production capacity of 10,000 doses by the end of 2025, which could support the growth of Carvykti in secondary markets [11] - King’s Ray must balance capital operations and business transformation, potentially through share divestment to improve cash flow while focusing on high-growth sectors like synthetic biology [12]

Core Insights - The recent government policies aim to support innovative drugs, including "first launch price protection" for CAR-T therapies, which will not be included in centralized procurement for the first five years post-launch [1] - Despite these policies, the payment challenges for CAR-T therapies remain significant, with prices ranging from 999,000 to 1,290,000 RMB, far exceeding the implicit thresholds of 300,000 RMB for basic medical insurance [1][2] - The focus for the 2025 negotiations will be on the long-term competitiveness of companies, assessing their ability to manage price pressures, cost control, and commercialization efficiency [2] Group 1: CAR-T Products and Pricing - Six CAR-T products will participate in commercial health insurance negotiations in September 2025, but basic medical insurance access is unlikely [3] - The current pricing for the listed CAR-T products is as follows: - Axicabtagene ciloleucel (Fosun Kite): 1,200,000 RMB - Relmacabtagene autoleucel (WuXi AppTec): 1,290,000 RMB - Nanjing Biomedicine's product: 999,000 RMB - Others range from 1,280,000 to 1,290,000 RMB [4] Group 2: Economic Evaluation and Price Pressure - Only three of the six CAR-T products have published cost-effectiveness analysis reports for the Chinese market, which will influence their negotiation positions [5] - The incremental cost-effectiveness ratios (ICER) for these products are as follows: - Axicabtagene ciloleucel: 463,000 RMB/QALY - Relmacabtagene autoleucel: 203,000 RMB/QALY - Other products show varying ICERs, indicating different levels of price pressure [6] Group 3: Competitive Strategies and Market Dynamics - The negotiation dynamics will depend on the companies' ability to demonstrate cost control and effective commercialization strategies [2][14] - Companies like WuXi AppTec and Legend Biotech have competitive advantages due to their existing ICERs being closer to the expected thresholds, while others may need to prove the reliability of unpublished data or offer price concessions [14] Group 4: Future Market Potential and Insurance Access - The potential for CAR-T therapies to enter the insurance market hinges on their ability to lower costs and expand patient access, particularly in the context of solid tumors [16][22] - The expected patient population for blood cancers is approximately 26,000 to 48,000 annually, while solid tumors could see a much larger patient base, enhancing the long-term viability of CAR-T therapies [20][22] Group 5: Key Observations for Investors - The completeness of health economic data will determine the negotiation eligibility for insurance access, while the feasibility of price reductions and commercialization efficiency will influence the speed of market entry [14][15] - The ability to expand hospital coverage and partnerships with health insurance will be critical for companies to achieve rapid market penetration and revenue growth [15]

Investment Rating - The report maintains a "Buy" rating for several companies in the biotechnology sector, including Legend Biotech (LEGN US), and others like 3SBio (1530 HK), Innovent Biologics (1801 HK), and more, indicating a positive outlook for these stocks [7]. Core Insights - The upcoming centralized procurement of biosimilars in mainland China is expected to impact multiple major products, with the first round of information collection already initiated [2]. - The report emphasizes that the impact of this procurement on company performance and product sales will likely be felt starting in 2026, as the process is expected to take longer due to the novelty of biosimilar procurement in China [2]. - Companies such as China Biologic Products, Innovent Biologics, and Hengrui Medicine are highlighted as key players with multiple products involved in the procurement process, warranting close attention to pricing and allocation results [2][3]. - The report suggests that the impact on innovative drugs will be limited, as the products involved in the procurement are off-patent and already have competing biosimilars [2]. Summary by Sections Section: Centralized Procurement - The centralized procurement for biosimilars is officially starting, with a focus on eight monoclonal antibody products [2]. - The information collection phase is expected to last 1-2 months, with a longer timeline anticipated for rule formulation and final product inclusion [2]. Section: Company Focus - Key companies to watch include China Biologic Products, Innovent Biologics, and Hengrui Medicine, with respective products in the procurement process [2]. - The report recommends monitoring the pricing and allocation outcomes closely for these companies [2]. Section: Innovative Drugs - The report indicates that the eight monoclonal antibodies involved in the procurement are already off-patent and have existing biosimilars, suggesting limited impact on innovative drugs still under patent [2]. - Continuous attention is advised for the upcoming national medical insurance negotiations and the establishment of commercial insurance innovative drug directories [2].

Core Insights - The Chinese life sciences industry is undergoing rapid transformation driven by policy relaxation, technological innovation, the rise of domestic companies, and the development of specialized real estate ecosystems [9][18][39] - The report "Trends in China's Life Sciences" provides a comprehensive overview of current market dynamics, regulatory changes, and future development directions [9] Policy Environment - Nationally, China has relaxed foreign investment restrictions in gene and cell therapy, allowing foreign-owned hospitals in major cities [10][20] - Local governments in cities like Beijing, Shanghai, and Shenzhen are offering targeted subsidies and fast-track approval processes to support biotechnology development [10][27] Industry Innovation and Company Growth - Chinese life sciences companies are shifting from generic drug production to innovative therapies, with firms like CanSino Biologics and BeiGene leading in CAR-T cell therapy and bispecific antibodies [11][29] - These companies are attracting international investment and licensing agreements, enhancing China's position in the global life sciences sector [11][39] Real Estate Development and Regional Hubs - Innovation hubs such as Suzhou BioBay and Shanghai Zhangjiang Hi-Tech Park provide end-to-end support, including shared laboratories and GMP-compliant facilities [12][35] - Second-tier cities like Chengdu and Ningbo are emerging as new growth centers, expanding the life sciences ecosystem [12][35] Owner Perspective - Real estate developers are adapting to industry-specific needs through light-asset models and flexible leasing arrangements [14][45] - While first-tier cities face saturation, demand remains robust in central and western regions, with a focus on sustainability and compliance [14][45] Tenant Perspective - Life sciences tenants are responding to regulatory reforms and increased compliance requirements, seeking flexibility and proximity to talent and infrastructure [15][46] - The highest demand is for GMP-certified laboratories and modular production facilities, emphasizing location advantages and sustainability certifications [15][46] Future Outlook - Growth opportunities lie in AI-driven drug development, personalized medicine, and advanced therapies, supported by government policies [16][39] - Life sciences real estate is evolving from generic parks to specialized, digitally-enabled facilities with high compliance and flexibility [16][39]

Company Overview - Legend Biotech Corporation is a global leader in cell therapy with over 2,600 employees, making it the largest standalone cell therapy company [3] - The company is pioneering treatments that aim to revolutionize cancer care, particularly through its CAR-T cell therapy, CARVYKTI, which is a one-time treatment for relapsed or refractory multiple myeloma [3] - Legend Biotech collaborates with Johnson & Johnson for the development and marketing of CARVYKTI and is focused on maximizing patient access and therapeutic potential [3] Upcoming Events - Legend Biotech will host a conference call for investors on August 11, 2025, at 8:00 am ET to review its second-quarter 2025 results [1] - Senior leaders will provide an overview of the company's performance during the quarter [1] - A replay of the webcast and earnings news release will be available approximately two hours after the call concludes [2]