Summary of Sino Biopharmaceutical (1177.HK) Conference Call Company Overview - **Company**: Sino Biopharmaceutical - **Ticker**: 1177.HK - **Industry**: Pharmaceuticals, Biotech, and Medtech Key Points Product Sales Growth - Management reported an encouraging trend in product sales growth in 3Q, showing acceleration compared to 1H25, primarily driven by new products such as gasorasib (KRAS G12C), factor Ⅶa, and meloxicam [2][3] - Earnings growth is expected to outpace topline growth due to investment gains [2] Financial Highlights - A milestone payment of **US$300 million** from Merck to LaNova has been received, which will be recorded in 2H25 after sharing **25%** with Genscript and tax deductions [2] - The company has a cost advantage of **20%-50%** lower than peers due to scale effects of large pharma [2] Regulatory and Market Considerations - For biosimilar VBP, management expressed low expectations for nationwide execution due to potential supply issues and a shift in policymakers' focus towards drug quality [2] - Smooth progress was noted in NRDL renewal negotiations for anlotinib, KRAS G12C, and PD-1 [2] Business Development Goals - The company aims to close a major licensing deal with upfront payments exceeding **US$100 million** by the end of 2025, emphasizing improved experience in business development negotiations [3] - Promising assets in the pipeline include: - **LM-108**: Potential first-in-class CCR8 mAb - **AP025 (FGF21)**: Global rights obtained from Ampsource Bio, potentially better efficacy for MASH, could be developed with GLP-1 - **PD-1/IL2**: Targeting IND in 2026 with a potentially better safety profile - **EGFR/cMET bispecific antibody**: Phase 1 clinical data readout expected in 2026 - **PD-1/CTLA-4 bispecific**: Broader therapeutic window anticipated [3] Price Target and Risks - The 12-month SOTP-based price target is **HK$6.19**, with a current price of **HK$7.12**, indicating a downside of **13.1%** [7][8] - Key downside risks include: - Broader price cuts on the generics portfolio - Delays in regulatory approvals for key products - Low returns on R&D investments due to resource allocation issues - Below-expectation ramp-up of innovative drugs [7] Market Capitalization and Financial Metrics - Market capitalization stands at **HK$134.4 billion** (approximately **US$17.3 billion**) [8] - Revenue projections for the next few years are as follows: - **2024**: **28,866.2 million RMB** - **2025E**: **33,640.4 million RMB** - **2026E**: **35,858.2 million RMB** - **2027E**: **38,682.4 million RMB** [8] Analyst Ratings - The company is rated as a "Buy" by Goldman Sachs, with a focus on its innovative pipeline and growth potential [8] Additional Considerations - The report includes disclosures regarding potential conflicts of interest due to Goldman Sachs' business relationships with the company [4][17] - Analysts emphasize the importance of considering this report as one of several factors in investment decisions [4]