Gold is 2025’s best performer. UBS sees more upside
On Thursday, JPMorgan initiated coverage on Ascentage Pharma Group (NASDAQ:AAPG), assigning an Overweight stock rating and setting a price target of $27.00. The company, currently valued at $1.6 billion, trades at $18.37 per share. Ascentage Pharma, a commercial-stage biotech company based in China, has been recognized for its progress in the global market with a portfolio that includes approved and late-stage products targeting various cancers. According to InvestingPro data, the stock has shown resilience with a 5.7% return over the past year.
The positive outlook from JPMorgan is rooted in the company’s strong valuation, bolstered by two of its assets, olverembatinib and lisofatoclax. These drugs, which target BCR-ABL/Kit and Bcl-2 respectively, are either approved or nearing approval in China. Olverembatinib, referred to as "Olver" in the analysis, is already generating revenue, with sales projected to reach approximately 300 million RMB in 2024. InvestingPro data reveals impressive revenue growth of 251.85% in the last twelve months, with a remarkable gross profit margin of 96.96%.
Lisofatoclax, or "Lisa," is also anticipated to make a significant impact, with a decision from the National Medical (TASE:BLWV) Products Administration (NMPA) expected later this year regarding its use for relapsed/refractory chronic lymphocytic leukemia and small lymphocytic lymphoma (R/R CLL/SLL). JPMorgan’s coverage notes the potential for both assets to collectively achieve approximately $500 million in peak sales by 2034 within the Chinese market.
The initiation of coverage and the establishment of a price target comes at a time when Ascentage Pharma is gaining attention for its innovative approach to cancer treatment. The company’s ascent to the global stage signifies a notable development in the biotechnology sector, particularly within the Chinese market.
The Overweight rating indicates that JPMorgan analysts see Ascentage Pharma’s stock as a better value than the average stock within the analyst’s coverage universe. The $27.00 price target suggests a significant level of confidence in the company’s growth prospects and the potential for investor returns over the long term. InvestingPro analysis indicates the stock is currently trading near its Fair Value, with an overall financial health score of "FAIR." Subscribers can access 6 additional ProTips and comprehensive financial metrics to make more informed investment decisions.
In other recent news, Ascentage Pharma’s initial public offering (IPO) on the NASDAQ commenced with shares opening at $17.25 per American depositary share (ADS), matching the IPO price. The company issued 7,325,000 ADSs, each representing four ordinary shares. The IPO is projected to generate gross proceeds of approximately $126.4 million before accounting for underwriting discounts, commissions, and other expenses. Additionally, underwriters have a 30-day option to purchase up to an additional 1,098,750 ADSs at the initial price. The ADSs are expected to start regular trading on January 27, 2025, under the symbol "AAPG." J.P. Morgan and Citigroup (NYSE:C) are acting as joint book-running managers for this offering.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.