Ge Long Hui·2025-07-19 11:28Core Viewpoint - China National Pharmaceutical Group announced the acquisition of 95.09% equity in Lixin Pharmaceutical for up to $951 million, with a net payment of approximately $501 million after accounting for cash and bank deposits [1] Group 1: Acquisition Details - The acquisition price is set at no more than $951 million, equivalent to approximately 6.8 billion RMB [1] - After excluding estimated cash and bank deposits of about $450 million, the net payment for the acquisition will be around $501 million, or approximately 3.6 billion RMB [1] - Lixin Pharmaceutical will become a wholly-owned subsidiary of China National Pharmaceutical Group following the completion of the transaction [1] Group 2: Technology Platforms and Pipeline - Lixin Pharmaceutical has four differentiated technology platforms that will enhance the self-research capabilities of China National Pharmaceutical Group [1] - The platforms include specific antibody development for tumor microenvironment antigens, antibody development for difficult drug targets, a new generation of antibody-drug conjugates, and conditionally activated immune cell connectors [1] - Lixin has eight candidate drugs in clinical stages, with significant licensing agreements totaling $4 billion for PD-1/VEGF bispecific antibody and GPRC5D ADC [1] Group 3: Clinical Trials and Market Potential - The LM-108 monoclonal antibody, a leading candidate in the pipeline, shows first-in-class potential and has demonstrated excellent efficacy in clinical trials [1] - The median progression-free survival (mPFS) for LM-108 in various patient groups reached 8.1, 13.2, and 6.9 months [1] - The global peak sales potential for LM-108 is estimated to reach $8 billion [1] Group 4: Financial Outlook - The acquisition is expected to generate licensing revenue in the short term, with a projected increase in adjusted net profit by 6-10% for 2025-2027 [2] - The DCF target price has been raised to HKD 8.0, maintaining a buy rating due to the anticipated contribution from Lixin's rich pipeline [2]