20220808-招银国际-Strong_sales_continued_in_2Q22_6页_935kb

BeiGene (BGNE US) Summary

Core Content

BeiGene (BGNE US) has demonstrated strong sales performance in 2Q22, with product revenue reaching US$304.5 million, representing a 120% year-over-year (YoY) increase and a 16% quarter-over-quarter (QoQ) increase. This growth is primarily attributed to the rapid sales ramp-up of two key products: zanubrutinib (BTK inhibitor) and tislelizumab (PD-1 antibody).

• Zanubrutinib Sales: US$128.7 million in 2Q22, up 203% YoY and 23% QoQ, driven largely by strong sales in the US.
• Tislelizumab Sales: US$104.9 million in 2Q22, up 40% YoY and 20% QoQ, with plans to expand its NRDL coverage and add more indications in China.

The company also continues to optimize cost efficiency, with SG&A expenses as a percentage of product sales dropping to 109% in 2Q22, compared to 168% in 1Q21 and 156% in 2021. The firm has a substantial cash balance of US$6.7 billion, supporting its R&D activities and global expansion.

Key Information

Product Sales and Market Expansion

• Zanubrutinib:

  • Demonstrated superiority over ibrutinib in r/r CLL/SLL in the global head-to-head Ph3 ALPINE trial with an ORR by IRC of 80.4% vs 72.9% (p = 0.0264).
  • FDA extended the PDUFA date for its sNDA for CLL to January 2023.
  • Final results of the ALPINE trial, including PFS data, are expected in 2H22E.
  • If PFS results are positive, zanubrutinib will be further validated as the global best-in-class BTK inhibitor.

• Tislelizumab:

  • Approved in China for nine indications, including large ones such as 1L nsq-/sq-NSCLC and 2L HCC.
  • Plans to expand NRDL coverage late in 2022 with a small price cut to add four additional indications: 1L NPC, 2L ESCC, 2L NSCLC, and MSI-H/dMMR solid tumors.
  • sNDA for 1L GC is under review by CDE, with approval expected in 1H23.
  • BLA for 2L ESCC in the US was deferred due to travel restrictions related to the pandemic.
  • BeiGene and Novartis plan to file BLAs for 1L GC, 1L HCC, 1L ESCC, and localized ESCC in the US next year, all supported by Ph3 MRCTs with US patient enrollment.
  • Results of the Ph3 trial of tislelizumab vs sorafenib in 1L HCC are expected in 3Q22E.

Financial Performance and Valuation

• Earnings Summary:

  • Revenue is projected to grow from US$308.9 million in FY20A to US$3,410.4 million in FY24E.
  • Net profit is expected to improve from a loss in FY20A to a profit of US$219 million in FY24E.
  • EPS (Reported) is expected to rise from US$-19.13 in FY20A to US$2.12 in FY24E.

• DCF Valuation:

  • Revised target price (TP) from US$248.52 to US$252.55 based on DCF analysis.
  • Terminal growth rate is set at 3.0%, with WACC at 9.20%.
  • The equity value is estimated at US$26,131 million, with a DCF per ADS of US$252.55.
  • The valuation includes a sensitivity analysis showing the impact of varying terminal growth rates and WACC on the target price.

• Share Performance:

  • Market cap is US$22,028 million.
  • 12-month price performance is shown in an image (not included in the text).
  • Shareholding structure includes Amgen (18.5%) and Baker Bros (11.4%).

Main Points

• BeiGene's strong sales momentum is driven by the success of zanubrutinib and tislelizumab.
• Zanubrutinib is expected to gain more market share in the global BTK inhibitor market with the approval of the CLL indication.
• Tislelizumab is expanding its indications in China and planning for US market entry.
• The company is improving cost efficiency, as shown by the declining SG&A expenses as a percentage of sales.
• The firm has a significant cash reserve, supporting its global expansion and R&D activities.
• Financial forecasts indicate continued revenue growth and improved net profit by FY24E.
• The revised DCF-based target price is US$252.55, reflecting the company's strong growth potential.

Analyst Recommendations

• Rating: BUY (Maintain)
• Target Price: US$252.55
• Up/Downside: 29.9%
• Current Price: US$194.47

Related Reports

• Positive on the US BLA approval of tislelizumab despite the deferral – 18 Jul 2022
• Harvest season for a global leading biopharma company – 17 Jun 2022

Disclaimer

• The report contains forward-looking statements that are subject to risks and uncertainties.
• CMBIGM does not provide individually tailored investment advice.
• The information is for the use of intended recipients only and should not be reproduced or distributed without prior written consent.
• The analyst certifies that the views expressed reflect personal opinions and there are no conflicts of interest affecting the report's objectivity.