In today’s briefing:
- Shanghai Henlius Biotech (2696 HK)- LVC Is Betting on Higher Valuation Upside Due to Business Update
- Alkem Laboratories Ltd (ALKEM IN): Shifting Focus to Chronic Segment to Yield Result in Long-Term
- PegBio (派格生物) IPO: Thoughts on Valuation
- Aardvark Therapeutics (AARD): Caution Needed Ahead of Small-Cap Obesity Biotech IPO
- CSL Ltd (CSL AU): Weak Vaccine Sales Affect H1FY25 Performance; FY25 Guidance Maintained
- Shofu (7979 JP) – Positive Dynamics Intact
- GSK Plc.: Will its Broader Vaccine Portfolio & International Expansion Strengthen Its Competitive Position Internationally?
- McKesson Corporation: Growth in Prescription Technology Solutions (RxTS) to Solidify Its Competitive Advantage!
- Novo Nordisk: Can This $11 Billion Expansion Solve Its Wegovy and Ozempic Supply Crisis & Give It An Edge Over Eli Lilly?
Shanghai Henlius Biotech (2696 HK)- LVC Is Betting on Higher Valuation Upside Due to Business Update
- LVC continues to increase its holdings in Henlius, indicating that LVC remains optimistic about Henlius as its internationalization process significantly accelerated. We are interested to see Lin Lijun’s next move.
- In the short to medium term, based on our conservative forecast on peak sales of HANQUYOU/HANSIZHUANG in overseas markets and domestic product sales, Henlius’ market value could reach RMB13-16 billion.
- Considering other candidates(e.g. HLX15, HLX11, HLX14), indication expansion, drug combination, etc., revenue of Henlius could reach about RMB8-9 billion in the long term, with market value to reach RMB24-27 billion.
Alkem Laboratories Ltd (ALKEM IN): Shifting Focus to Chronic Segment to Yield Result in Long-Term
- Alkem Laboratories Ltd (ALKEM IN) has announced twin acquisitions in medical devices and dermatology space. The acquisitions will further strengthen Alkem’s positioning in the domestic market.
- Alkem has reported Q3FY25 result, with mainstay domestic business showing 6% YoY growth. EBITDA margin improved to 22.5% (Q3FY24: 21.3% and Q2FY25: 22.0%).
- Alkem’s inclination toward acute and NELM segments has been a reason for its historically cheaper valuation. However, with portfolio expansion toward high-margin chronic segment should place Alkem for re-rating.
PegBio (派格生物) IPO: Thoughts on Valuation
- PegBio, a China-based biotech company, plans to raise up to USD 150 million via a Hong Kong listing.
- In our previous note, we examined the company’s core product namely PB-119.
- In this note, we will provide a valuation for the company’s key products.
Aardvark Therapeutics (AARD): Caution Needed Ahead of Small-Cap Obesity Biotech IPO
- We believe exercising caution based upon the small market cap of the company and the existing backers is the prudent play at this time.
- Aardvark Therapeutics develops novel, small-molecule therapeutics to activate innate homeostatic pathways for the treatment of metabolic diseases.
- Their lead product candidate is an oral gut-restricted small-molecule agonist of certain TAS2Rs expressed in the gut lumen and have initiated a Phase 3 trial for hyperphagia associated with PWS.
CSL Ltd (CSL AU): Weak Vaccine Sales Affect H1FY25 Performance; FY25 Guidance Maintained
- For H1FY25, CSL Ltd (CSL AU) reported net profit of $2.01B, up 6% YoY, missing estimate of $2.07B. Underlying profit (NPATA) grew 3% YoY to $2.07B.
- H1FY25 revenue increased 5% YoY to $8.48B. Solid performance from CSL Behring and CSL Vifor was partially offset by negative impact from CSL Seqirus.
- The company has reaffirmed FY25 underlying profit guidance of $3.2–3.3B at constant currency, up 10–13% YoY. Revenue growth is anticipated to be 5–7% YoY at constant currency.
Shofu (7979 JP) – Positive Dynamics Intact
- Demand for Shofu’s competitive Chemical products continue to drive overseas growth and improve the sales mix, with 58.6% of total Q1-3 FY3/25 sales derived overseas.
- Reported quarterly Q3 FY3/25 GPM and OPM have declined QoQ, but these were due to one-time events, resulting in a robust underlying trend indicating that the business is becoming more profitable whilst still investing in business expansion.
- The weak yen has been a tailwind, but the company has maintained FY3/25 guidance. With no end-loaded costs expected for Q4 FY3/25, we maintain our earnings estimates.
GSK Plc.: Will its Broader Vaccine Portfolio & International Expansion Strengthen Its Competitive Position Internationally?
- GlaxoSmithKline (GSK) has reported its 2024 financial results, highlighting both positive trends and areas of concern for potential investors.
- A detailed overview of GSK’s performance and strategic initiatives underlines key aspects that can inform an investment thesis.
- On the positive side, GSK’s transformation post-demerger into a biopharma-focused company is evident through robust growth in specialty medicines, which now form a significant portion of the company’s portfolio.
McKesson Corporation: Growth in Prescription Technology Solutions (RxTS) to Solidify Its Competitive Advantage!
- McKesson Corporation’s third-quarter fiscal 2025 earnings call reveals a mix of robust financial performance and strategic advancements, balanced by certain challenges.
- The company achieved an 18% revenue increase to $95.3 billion, with a notable 16% growth in adjusted operating profit, reaching $1.5 billion.
- This performance was bolstered by strong contributions from the U.S. Pharmaceutical and Prescription Technology Solutions segments, underscoring the company’s operational strength and its diversified business model.
Novo Nordisk: Can This $11 Billion Expansion Solve Its Wegovy and Ozempic Supply Crisis & Give It An Edge Over Eli Lilly?
- Novo Nordisk delivered a strong financial performance in 2024, with a 26% rise in both sales and operating profit, driven by its blockbuster diabetes and obesity drugs, Ozempic and Wegovy.
- The company reported a 30% year-over-year revenue increase in the fourth quarter, surpassing expectations, largely due to pricing adjustments in the U.S. The results eased investor concerns over a potential slowdown in the obesity market, particularly after rival Eli Lilly’s recent sales miss.
- Novo’s stock surged 3% in European trading and 3.4% in premarket U.S. trading following the earnings report.
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