Kelun Biotech (6990.HK)_ APAC Healthcare Corporate Day 2025 — MSD_Blackstone deal read-across; eyes on broader pipeline in 2026

Summary of Kelun Biotech (6990.HK) Conference Call Company Overview - Company: Kelun Biotech - Ticker: 6990.HK - Market Cap: HK$102.6 billion / $13.2 billion - Industry: China Pharma, Biotech & Medtech Key Points Industry Insights - The management discussed the MSD/Blackstone deal related to sac-TMT R&D, indicating it as a sign of commitment and acknowledgment within the industry [2][1] - Such funding deals are common in the US, with a reference to a $2 billion deal between ALNY/Blackstone on RNAi medicines in 2020 [2][1] Financial Guidance - FY25 sales guidance remains unchanged at RMB 800 million to 1 billion, with expectations for more significant growth post-NRDL coverage [8][1] - Management anticipates achieving corporate-level break-even within 1-2 years [8][1] Pipeline and Clinical Trials - Data readouts in 2026 are expected to provide deeper insights into the sales potential of sac-TMT, including: - First global phase 3 trial readout in GEA (TroFuse-015 trial) in 4Q26 - Phase 3 overall survival update for HR+/HER2- breast cancer - Additional data from China phase 3 trials in first-line settings [8][1] Deal Analysis - The MSD/Blackstone deal terms include: - Blackstone eligible for sales royalties only after the approval of sac-TMT in first-line triple-negative breast cancer (TNBC) [2][1] - The deal indicates a potential for higher-than-consensus peak sales of sac-TMT, with estimates of US$2.8 billion at peak sales [2][1][5] - The US$700 million funding for sac-TMT suggests increased clinical investment in this asset [2][1] Valuation and Risks - A Buy rating is maintained for Kelun Biotech with a 12-month target price of HK$492.4, reflecting a 12% upside from the current price of HK$439.80 [6][1][7] - Key risks identified include: - R&D risks in developing new indications and future ADCs - Increased competition in the ADC field - Limited commercial manufacturing and sales track record - Challenges in talent competition - Alliance risks in partnerships [6][1] Financial Projections - Revenue projections for the next few years are as follows: - FY24: RMB 1,933 million - FY25: RMB 1,983 million - FY26: RMB 3,696.9 million - FY27: RMB 5,605.3 million [7][1] Conclusion Kelun Biotech is positioned for growth with a strong pipeline and strategic partnerships, although it faces several risks typical of the biotech industry. The management's focus on achieving break-even and expanding its market presence through clinical data in 2026 is crucial for its future performance.