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On Monday, TYK Medicines (2410:HK) received a Buy rating from Deutsche Bank (ETR:DBKGn), with a price target set at HK$31.60. The new coverage by the bank’s analyst highlights the company’s core product, Asandeutertinib (TY-9591, KARDORISSO), which is described as a differentiated third-generation EGFR-TKI aimed at treating advanced EGFR mutated non-small cell lung cancer (NSCLC).
The analyst expressed confidence in the potential of Asandeutertinib to start generating revenue by 2026E, noting the drug’s ability to address unmet medical needs and the possibility of it rapidly gaining market share upon release. The optimism surrounding the drug’s future performance is a key factor in the establishment of the price target.
The price target of HK$31.60 is grounded in a 10-year discounted cash flow (DCF) model. The model used by Deutsche Bank includes a weighted average cost of capital (WACC) of 12.2% and a terminal growth rate of 1.5%. These figures are utilized to estimate the present value of TYK Medicines’ projected future cash flows, which underpin the Buy rating and the price target.
The analyst’s commentary provided insight into the valuation method and the positive outlook for TYK Medicines’ lead product. "Core Product and potential blockbuster, Asandeutertinib is expected to start generating revenue in 2026E. We believe the product could rapidly gain market share through addressing unmet medical needs," stated the Deutsche Bank analyst.
Investors and market watchers will likely keep a close eye on TYK Medicines as it progresses with the development of Asandeutertinib. The anticipation of revenue generation in the next few years and the potential market impact of the drug are critical aspects of the company’s valuation and the bullish stance from Deutsche Bank.
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