CMSC: 3SBIO (01530) is first recommended with a "strong buy" rating, leading the value reassessment with PD-1/VEGF dual antibody.

CMSC released a research report, stating that for the first time it covers 3SBIO (01530) with a "strong buy" rating. The PD-(L)1/VEGF dual antibody is the core drug of the next generation of IO therapy, and the SSGJ-707 molecule design is unique with early clinical data showing potential. Pfizer's $1.4 billion upfront payment + up to $48 billion milestone payments + $1 billion share subscription gives global rights, fully recognizing the potential of the 707 molecule and the company's R&D strength. With Pfizer's rapid progress in multiple global clinical trials and the initiation of more ADC combination clinical trials in the future, the company's valuation space is expected to continue to expand. The company's performance base is stable, the product pipeline is orderly, and it has strong long-term growth potential. Main points of the CMSC: Company background A solid foundation for innovation. 3SBIO was established in 1993 and is a leading biopharmaceutical company in China with rich experience in R&D/production/sales of biopharmaceuticals. After more than 30 years of development, the company has a rich product portfolio and pipeline in the fields of nephrology, hematology and oncology, autoimmune diseases, and dermatology. At the same time, the company has strong commercial capabilities in China, with core products such as Tebipenao, EPO, Yisaipu, and Mandi occupying a high market share in their respective areas, driving continuous performance growth. Next-generation IO cornerstone therapy targeted at tumors, early research FIC molecules enter clinical validation period; autoimmune pipeline progressing rapidly, approaching harvest period Tumors: The 707 is expected to become a major cornerstone variety of global cancer immunotherapy, with several FIC molecules already in clinical stages. In May 2025, the company reached a major licensing agreement with Pfizer, granting global rights to SSGJ-707. Pfizer will pay $1.4 billion upfront payment + $48 billion milestone payments + $1 billion share subscription, setting a record for domestic PD-(L)1/VEGF dual antibody BD. PD-(L)1 inhibitors face challenges in cold tumors, with room for improvement in efficacy; for example, the PD-1/VEGF dual antibody represented by Kangfang AK112 beat K drug head-to-head in a phase III clinical trial (HARMONi-2 study) for 1LNSCLC monotherapy, confirming the potential of dual antibodies as cornerstone drugs for the next generation of IO therapy, with potential market space exceeding $100 billion. 707 is highly compatible with Pfizer's oncology strategy and products, with Pfizer advancing on the three axes of "speed, breadth, and depth." Pfizer is about to start 7 global clinical trials, expanding the value and realization potential of the 707 product. On November 10th, Pfizer updated the clinical development plan for SSGJ-707, positioning it as an immunotherapy cornerstone therapy across tumor types. Pfizer is set to initiate clinical trials soon: phase III for 1LNSCLC, phase III for 1LmCRC, phase II/III for ESSCLC, phase I/II for mHCC/mUC/mRCC, phase I/II for NSCLCADC; by 2026, considerations will be made for over 10 indications/combination trials, with 707 expected to cover over 350,000 American patients in the future, with a huge market space. Several FIC molecules have entered clinical validation period in the early research pipeline, with SSS59 (the world's first targeted MUC17 / CD3 / CD28 triple antibody) and SPGL008 (B7H3/IL15 fusion protein) already in phase I clinical trials. Strong commercial capabilities, room for growth in major products Upgrading products: The competitive landscape of the core product is good, with room for growth through indication expansion. Tebipenao is the company's core product (with revenue of 5.06 billion yuan in 2024), being the only commercial rhTPO globally and recommended at the highest level in CTIT treatment guidelines. In 2024, negotiations with medical insurance did not reduce the price of Tebipenao, and new indications for pediatric ITP were approved, with future growth potential. Brand promotion: Product layout is well-established, with steady growth expected. Despite competition and pressure from centralized procurement, the company still leads the rhEPO market. In 2024, the dual-brand cooperation of Yibiao and Cyborg achieved sales revenue of 1.09 billion yuan, maintaining a stable position as industry leader with a 42% market share. At the same time, the company is also expanding into next-generation rhEPO products, improving product layout: the long-acting EPO product SSS06 for EPO treatment in adult dialysis patients has been accepted for NDA (7M24), and SSS17 (HIF inhibitor) for non-dialysis chronic renal anemia and postoperative anemia is in phase II clinical stage. Profit forecast and investment rating It is expected that the company's revenue from 2025 to 2027 will be 18.2/11.5/11.8 billion yuan, and the net profit attributable to the mother will be 9.7/3.2/3. billion yuan, corresponding to PE multiples of 7/19/22. First-time coverage, with a "strong buy" rating. Risk factors Risks such as clinical trials falling short of expectations, technological iterations, policy changes, and model parameters not being established.