Goldman Sachs: The next generation IO-ADC is expected to lead HENLIUS (02696) in its global pipeline layout, initiating coverage with a "buy" rating and a target price of HK$100.70.

Goldman Sachs released a research report stating that HENLIUS (02696) next generation IO-ADC (Immuno-oncology Antibody-drug conjugate combination therapy) will lead its global pipeline layout. They initiated coverage of the stock with a "buy" rating and a 12-month target price of HK$100.70. This target price represents a 52.3% upside from the stock's closing price of HK$66.10 on Thursday. Goldman Sachs stated that HENLIUS is strategically transforming from an early leader in biosimilars to a global innovative biopharmaceutical company. This transformation is supported by three factors: 1) Pipeline expansion led by the core asset HLX43 - a promising PD-L1 antibody conjugate drug expected to be best in class in various tumors, preparing for key global clinical studies; 2) Two new products in the biosimilars business segment set to launch globally, leveraging an established international collaboration network for commercialization to generate substantial cash flow to further support research and development investment; 3) Company has demonstrated capabilities in global market clinical operations, regulatory affairs (approved in the US/EU), and biomanufacturing. Goldman Sachs believes that the current valuation of HENLIUS is attractive with catalyst events expected in the next 6 to 12 months, hence initiating coverage with a "buy" rating. Goldman Sachs pointed out that HLX43 is the main valuation driver. They estimate that HLX43, as a PD-L1 ADC with the ability to precisely kill tumor cells and activate the immune system mechanism in immuno-oncology, is expected to achieve risk-adjusted sales of $3.8 billion by 2036, contributing approximately 54% to the company's valuation. Goldman Sachs added that among the broad range of cancers that HLX43 can cover, second-line EGFR wild-type non-squamous non-small cell lung cancer (2L EGFRwt NSCLC) has the clearest and most significant commercial potential - based on early data readouts from ASCO/WCLC meetings, with more validation expected by the end of the year. More proof-of-concept data are also expected in the next 12 months to support further exploration of HLX43 in indications such as cervical cancer, esophageal cancer, and colorectal cancer. Additionally, Goldman Sachs believes that HLX43 has the potential for global collaboration with international pharmaceutical companies, which aligns well with HENLIUS's strategic focus on unleashing core innovative global value.