20220718-招银国际-Positive_on_the_US_BLA_approval_of_tislelizumab_despite_the_deferral_6页_928kb

BeiGene (BGNE US) Summary

Core Content

BeiGene is a global biopharmaceutical company that has been actively developing and commercializing innovative cancer therapies. The company has recently faced a deferral in the FDA's review of its BLA for tislelizumab in the second-line treatment of esophageal squamous cell carcinoma (2L ESCC) due to the impact of the COVID-19 pandemic on travel restrictions. Despite this deferral, the BLA is viewed positively due to strong data from the multi-regional Phase 3 (MRCT) RATIONALE302 trial, which demonstrated significant improvements in patient outcomes compared to chemotherapy.

Main Points

• BLA Status: The FDA deferred the review of tislelizumab's BLA for 2L ESCC due to travel restrictions, but the application remains under review.
• Clinical Trial Data:
  • The RATIONALE302 trial enrolled 512 patients from 11 countries, with 21% from Europe and North America.
  • Tislelizumab reduced the risk of death by 30% (HR = 0.70, P = 0.0001) and extended the median overall survival (OS) by 2.3 months compared to chemotherapy.
  • In comparison, Keytruda and Opdivo showed 22% and 23% risk reductions, respectively.
• 1L ESCC Trial: The RATIONALE306 trial demonstrated that tislelizumab plus chemotherapy significantly improved OS by 6.6 months and reduced the risk of death by 34% compared to chemotherapy alone.
• Cross-trial Comparison:
  • Keytruda: 2.8 months OS extension, 28% risk reduction.
  • Opdivo: 2.5 months OS extension, 26% risk reduction.
• Market Position: Tislelizumab is well-positioned as a potential standard of care for ESCC, supported by robust MRCT trial results.
• Investment Recommendation: The analyst maintains a BUY rating, with a target price of US$248.52 (unchanged from previous).
• Valuation: The DCF-based target price is based on a WACC of 9.20% and a terminal growth rate of 3.0%.

Key Information

• Current Price: US$177.15
• Up/Downside: 40.3%
• Market Cap: US$20,105 million
• Share Performance:
  • 1-month return: 32.4%
  • 3-month return: -2.9%
  • 6-month return: -25.8%
• Shareholding Structure:
  • Amgen: 18.45%
  • Baker Bros: 11.42%
  • HHLR Advisor: 11.02%
  • Capital: 8.01%
  • Others: 51.10%
• Financial Summary:
  • Revenue is expected to grow from US$1,398 million in FY22E to US$3,340 million in FY24E.
  • Net profit is projected to improve from US$-1,648 million in FY22E to US$272 million in FY24E.
  • Adjusted net profit margin is expected to rise from -117.9% in FY22E to 8.2% in FY24E.
• DCF Valuation:
  • The target price of US$248.52 is derived from a DCF model, with the terminal value estimated at US$51,259 million.
  • Sensitivity analysis shows the target price is sensitive to changes in terminal growth rate and WACC.
• Risks and Disclosures:
  • The report contains important disclosures about the risks of investing in securities and the independence of the analyst.
  • The analyst confirms no direct or indirect conflicts of interest in the report's content.
  • The report is not intended for distribution in the U.S. and is solely for major U.S. institutional investors.

Conclusion

Despite the deferral of the FDA's BLA approval for tislelizumab due to the impact of the pandemic, the solid clinical data from the MRCT trials supports the potential approval of the drug. The company's strong market position, global approvals, and promising financial outlook reinforce the BUY recommendation. The DCF model suggests a target price of US$248.52, indicating significant upside potential for the stock.