Goldman Sachs: Raises HENLIUS (02696) target price to HKD 112.01, significant strategic value in collaboration with Sanofi.

Goldman Sachs released a research report, maintaining a "Buy" rating on HENLIUS (02696) and raising its 12-month target price from HKD 104.79 to HKD 112.01. In the report, Goldman Sachs analyzed HENLIUS's strategic collaboration with global generic drug and biosimilar company Sandoz. As of Thursday's close, HENLIUS (02696) rose 7.32% to HKD 70.35, with the stock up over 23% this year. Goldman Sachs believes that this transaction structure is significantly more attractive than the traditional license-out model, signifying that HENLIUS is transitioning from a single product approach to a new stage as a global biosimilar platform company. Extensive Biosimilar Collaboration with Sandoz HENLIUS has signed a cooperation framework agreement with Sandoz, under which both parties will establish a strategic partnership around up to 10 monoclonal and/or antibody-drug conjugate (ADC) biosimilar products or components, reaching specific cooperation terms for the selection of the first three products and one potential collaboration product. In addition to a $77 million upfront payment and an $8 million non-refundable option fee, HENLIUS is entitled to 40% of the net sales or 40% of the net profits, depending on the product's economics. Management pointed out that the default structure is a 40% split on net sales; if the biosimilar price falls below the predetermined threshold, it will switch to a cost-plus profit-sharing model. In this scenario, HENLIUS first recoups its production costs and then receives 40% of the remaining profits, providing downside protection while allowing the company to continue participating in the long-term commercialization value distribution of the product. Goldman Sachs believes this transaction structure allows HENLIUS to retain value overseas that significantly exceeds that under the traditional royalty licensing model, leveraging Sandozs global commercialization platform. This cooperation further deepens the relationship following the 2025 agreement for HLX13 (the biosimilar of ipilimumab), marking an upgrade from single product collaboration to a platform-level partnership. Goldman Sachs believes this will enhance external recognition of HENLIUS's biosimilar product portfolio. Goldman Sachs also pointed out the significant strategic value of collaborating with SandozSandoz is a leader in biosimilars in Europe and an important player in the U.S. market, with outstanding commercialization capabilities. Sandoz's recently launched biosimilar of denosumab captured over 50% market share within the first three quarters of its launch in the U.S. CMC and Regulatory Execution Are Key Differentiating Advantages Goldman Sachs believes this transaction further validates HENLIUS's strength in the global biosimilars field, particularly in CMC development, regulatory execution, and production quality. Management emphasized that all biosimilar applications submitted to the FDA by HENLIUS have been approved, and no complete response letters (CRLs) have been received, reinforcing the companys reputation for continuous delivery and compliance. Goldman Sachs noted that as the FDA and EMA increasingly emphasize analytical similarity and manufacturing robustness, especially with the trend towards reducing or eliminating confirmatory phase III clinical requirements in the biosimilar field, these capabilities are becoming ever more important.