Core Viewpoint - China Galaxy Securities reports that Innovent Biologics (01801) has become a leading biopharma company in China, excelling in innovative drug R&D, production, and commercialization, particularly in the oncology sector, which is expected to drive growth [1] Group 1: Financial Projections - The company is projected to achieve revenues of 11.891 billion, 14.836 billion, and 20.029 billion yuan for the years 2025, 2026, and 2027 respectively, with net profits of 0.824 billion, 1.378 billion, and 2.059 billion yuan for the same years [1] Group 2: Strategic Partnership with Takeda - On October 22, 2025, Innovent Biologics entered a global strategic partnership with Takeda Pharmaceutical to accelerate the global rollout of next-generation IO and ADC therapies, including IBI363, IBI343, and IBI3001, with an upfront payment of 1.2 billion USD and potential milestone payments totaling up to 11.4 billion USD [1] Group 3: Development of IBI363 - Innovent will co-develop IBI363 with Takeda, sharing development costs at a 40/60 ratio, and profits in the U.S. market will also be split 40/60, with Takeda leading the development [2] - IBI363 has shown promising data at the 2025 ASCO meeting, with a cORR of 36.7%, mPFS of 9.3 months, and a 12-month OS rate of 70.9%, with a global Phase III clinical plan set to launch soon [2] Group 4: Rights Granted for IBI343 and IBI3001 - Innovent has granted Takeda exclusive rights to IBI343 outside of Greater China, with potential milestone payments and high-tier sales sharing [3] - Takeda will focus on the global development of IBI343, particularly in first-line gastric and pancreatic cancer, while IBI3001's rights outside Greater China are also available for Takeda to exercise in the future [3]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside of 15% to 35% from the current price [2][11]. Core Insights - The company has entered a global strategic partnership with Takeda Pharmaceutical to accelerate the development of next-generation IO and ADC therapies, expanding its global market value [5]. - The collaboration includes a significant upfront payment of $1.2 billion, with potential milestone payments totaling up to $10.2 billion, bringing the total deal value to a maximum of $11.4 billion [6]. - The company is expected to achieve net profits of RMB 373 million, RMB 1.427 billion, and RMB 2.404 billion for the years 2025, 2026, and 2027 respectively, reflecting substantial year-on-year growth [11]. Company Overview - The company operates in the pharmaceutical and biotechnology industry, with a current H-share price of HKD 86.90 and a target price of HKD 107 [1]. - The company has a market capitalization of approximately RMB 690.75 billion and a total share count of 1,713.52 million [1]. Product Portfolio - The company's revenue is primarily derived from drug sales (87%), with a smaller portion from licensed products (12%) and R&D income (1%) [2]. - Key products include IBI363, which has shown promising clinical data and has received breakthrough therapy designation in China and fast track designation from the FDA in the U.S. [7]. Financial Projections - The company is projected to achieve a net profit turnaround in 2025, with a year-on-year growth rate of 282.23% [9]. - The earnings per share (EPS) is expected to increase from -0.66 RMB in 2023 to 1.40 RMB by 2027 [9]. Strategic Development - The partnership with Takeda is not merely a licensing agreement but a joint development and commercialization model, which is expected to enhance the company's capabilities in global drug development and commercialization [7].