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UBS downgraded Remegen Co Ltd (9995:HK) stock rating to Neutral from Buy on Friday, while raising its price target to HK$63.80 from HK$33.70. The Hong Kong-listed biotech company has seen its shares surge 300% year-to-date, significantly outperforming the broader Hong Kong biotech sector’s 64% gain.
The rating change follows what UBS describes as substantial pipeline progress for Remegen’s key drug candidates. The firm highlighted advancements in RC18 (BLyS/APRIL) for generalised myasthenia gravis (gMG), RC48 (HER2 ADC) for first-line uroepithelial cancer treatment, and expectations surrounding RC18 BD.
Remegen recently completed a HK$796 million placement that has alleviated its "tight financial situation," according to UBS. The capital raise provides the biotech company with additional resources to advance its clinical programs and commercial initiatives.
UBS notes that Remegen’s current risk-adjusted price-to-peak sales ratio stands at 2.2x, approaching the peer median of 2.4x. This valuation metric suggests the stock is now trading near fair value compared to industry peers.
The downgrade reflects UBS’s view that Remegen stock is "fairly priced from a 12-month perspective, with most near-term positive catalysts priced in." Despite the rating change, the significant price target increase acknowledges the company’s improved financial position and pipeline developments.
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