Sinolink: Maintains SIMCERE PHARMA (02096) "Buy" Rating SIM0500 Receives Milestone Payment

Sinolink released a research report stating that SIMCERE PHARMA (02096) is continuously stepping up its innovative transformation, with multiple innovative pipelines gradually going overseas. Taking into account the confirmation of the company's down payment and milestone payment over 26 years, the revenue and profit forecast for 2026 has been raised, while maintaining profit forecasts for 2025 and 2027. It is estimated that the company's revenue for 2025-2027 will be 76.3/100.3/110.4 billion yuan (previously 76.3/91.0/110.4 billion yuan), with net profit attributable to shareholders being 11.5/16.5/16.6 billion yuan (previously 11.5/13.8/16.6 billion yuan), corresponding to EPS of 0.44/0.64/0.64 yuan (previously 0.44/0.53/0.64 yuan), maintaining a "buy" rating. Key points from Sinolink's report: Business Analysis On February 3, 2026, the company announced that it had received a milestone payment of $40 million from AbbVie for SIM0500 (GPRC5D/BCMA/CD3 triple antibody). In January 2025, the company signed an overseas licensing option agreement with AbbVie for SIM0500, under which the company will receive an initial payment, as well as up to $1.055 billion in option payment and milestone payments, as well as tiered royalties on net sales outside Greater China. SIM0500 is a humanized TCE triple antibody targeting two tumor antigens, expected to achieve better efficacy. SIM0500 combines a low-affinity but highly-targeted CD3 antibody with two anti-tumor antibodies targeting G protein-coupled receptor family 5 member D (GPRC5D) and B cell maturation antigen (BCMA). SIM0500 exhibits strong T cell cytotoxic effects against MM cells through multiple anti-tumor mechanisms. In April 2024, SIM0500 was granted Fast Track designation by the US FDA for use in patients with multiple myeloma who have received 3 prior lines of therapy and are resistant or intolerant to standard treatments known to offer clinical benefit. Multiple pipeline authorizations have been obtained since 2025, gradually validating the innovative transformation Since 2025, the company has obtained a total of 4 pipeline authorizations, including: 1) the licensing option agreement with AbbVie for SIM0500; 2) a collaboration with NextCure on SIM0505 (CDH6 ADC), with potential payments of up to $745 million; 3) a collaboration with Ipsen on SIM0613 (LRRC15 ADC), with potential total payments of up to $1.06 billion; 4) an exclusive licensing agreement with Boehringer Ingelheim for SIM0709 (TL1A/IL-23 bispecific antibody), under which the company will receive an initial payment of 42 million, as well as tiered royalties on net sales outside Greater China based on development progress, regulatory approval, and commercialization, with potential milestone payments of up to 1.016 billion. The overseas authorization of self-developed pipelines further validates the company's enhanced innovative research capabilities, with collaboration partners including major MNCs, continuing to gain recognition for its innovative capabilities from overseas MNCs and other enterprises. There may still be opportunities for continued new BD in dozens of self-developed pipelines and innovative ADC platforms in the future. Risk factors: Sales lower than expected, slower-than-expected progress in research and development, research and development failures, procurement risks.