Goldman Sachs keeps Jiangsu Hengrui Medicine stock at Buy list

Published 30/12/2024, 12:24
Goldman Sachs keeps Jiangsu Hengrui Medicine stock at Buy list

Monday, Goldman Sachs reiterated a Buy rating on Jiangsu Hengrui Medicine Co. Ltd (600276:CH) with a price target of RMB51.59. This endorsement follows Hengrui's recent announcement regarding the licensing of SHR-4849, a novel cancer treatment drug, to IDEAYA Biosciences (NASDAQ:IDYA), a biotech firm based in the United States.

The licensing agreement includes an upfront payment of $75 million to Hengrui, with potential development and sales milestone payments that could total up to $970 million. Additionally, Hengrui is set to receive single-to-double digit royalties on net sales outside Greater China.

SHR-4849 is an antibody-drug conjugate (ADC) targeting DLL3, currently in phase 1 of clinical trials. The deal with IDEAYA Biosciences marks a significant step in Hengrui's efforts to expand its ADC franchise globally.

The company's management has highlighted the importance of collaboration revenue, which is expected to grow through business development initiatives and a team that has expanded to over 30 full-time employees. Goldman Sachs notes the potential for more deals to emerge in the next one to two years, given Hengrui's extensive early-stage pipeline.

The partnership with IDEAYA is seen as a positive move for Hengrui, showcasing the company's commitment to advancing its product portfolio and expanding its international reach. Goldman Sachs' affirmation of a Buy rating reflects confidence in Hengrui's strategic direction and its potential for future growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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