20220126-招银国际-A_significantly_undervalued_biotech_company_with_solid_pipeline_assets_4页_943kb

I-Mab BioPharma (IMAB US) Summary

Core Content

I-Mab BioPharma is a biotech company with a significantly undervalued market position due to its highly differentiated and comprehensive innovative pipeline. The company is focused on developing monoclonal antibodies targeting various oncology and immunology indications, including CD47, CD73, CD38, and others. The current market cap is USD 2.2 billion, but the company's pipeline is expected to generate substantial value through potential out-licensing deals and regulatory milestones.

Key Pipeline Assets

• Lemzoparlimab (CD47 mAb):

  • Demonstrated 71% ORR and 57% CR in NHL treatment, outperforming magrolimab (49% ORR, 21% CR) and ALX148 (64% ORR, 27% CR).
  • Showed a superior safety profile with only 13% mild anemia and all TRAEs were Grade 1/2.
  • Expected to release dose-expansion data in NHL in 2H22E and Ph2 data in MDS this year.
  • Solid tumor data readout from the US trial with Keytruda is expected in 1H22E.

• Uliedlimab (CD73 mAb):

  • Demonstrated linear PK profile and full receptor occupancy at middle and high doses.
  • No "hook effect" observed.
  • Expected to release China Ph2 study results in solid tumors in mid-2022E, which could lead to an out-license deal within 2022E.

• Felzartamab (CD38 mAb):

  • Expected to submit BLA to NMPA for 3L MM treatment in 1Q22E.
  • Completed patient enrollment for Ph3 registrational trial for 2L MM.
  • Potential second-to-market CD38 mAb in China, as Darzalex is the only approved one.

Financial Overview

• Cash Position: As of June 30, 2021, I-Mab had USD 673 million in cash.
• Upfront Payments: Received USD 35 million from Jumpcan in 2H21 for the out-license of TJ101 and may receive USD 50 million milestone payment from AbbVie in 1H22E.
• Target Price: USD 103.60 (unchanged from previous), implying a +281.16% upside from the current price of USD 27.18.
• DCF Valuation: Based on WACC of 9.74% and terminal growth rate of 3.0%, the equity value is estimated at USD 7,974 million.

Financial Highlights

• Revenue:
  • FY19A: RMB 30 million
  • FY20A: RMB 1,543 million
  • FY21E: RMB 546 million
  • FY22E: RMB 843 million
  • FY23E: RMB 1,247 million
• Net Profit:
  • FY19A: (RMB 1,485 million)
  • FY20A: RMB 471 million
  • FY21E: (RMB 1,340 million)
  • FY22E: (RMB 981 million)
  • FY23E: (RMB 772 million)
• EPS (RMB per ADS):
  • FY19A: N/A
  • FY20A: 8.07
  • FY21E: (17.42)
  • FY22E: (12.74)
  • FY23E: (10.03)
• Consensus EPS:
  • FY21E: (11.39)
  • FY22E: (8.92)
  • FY23E: (8.10)

Shareholding and Performance

• Market Cap: USD 2,172 million
• Average 3-month Total Return: USD 26.74 million
• 52-Week High/Low: USD 85.40 / USD 25.90
• Total Issued Shares: 80 million
• Share Performance:
  • 1-month: -42.1%
  • 3-month: -59.8%
  • 6-month: -62.9%

Shareholding Structure

• Founders: 6.7%
• CBC Group: 17.5%
• Hillhouse Capital: 10.8%
• Other Public Shareholders: 65.0%

Key Ratios

• Gross Margin:
  • FY19A: 100%
  • FY20A: 100%
  • FY21E: 100%
  • FY22E: 85%
  • FY23E: 86%
• Current Ratio:
  • FY19A: 2x
  • FY20A: 9x
  • FY21E: 30x
  • FY22E: 128x
  • FY23E: 52x
• Total Debt to Asset Ratio:
  • FY19A: 38%
  • FY20A: 11%
  • FY21E: 5%
  • FY22E: 4%
  • FY23E: 6%

Analyst Ratings and Recommendations

• CMBIS Rating: BUY
• Potential Return: Over 15% over the next 12 months.

Strategic Collaborations

• Jumpcan: Upfront payment in 2H21 and potential milestone payment in 1H22E.
• Sinopharm: Strategic cooperation for commercialization in China.
• AbbVie: Potential milestone payment for TJ101.
• Trillium Therapeutics: Acquired by Pfizer in Aug 2021 for USD 2.26 billion, indicating the potential value of CD47/SIRPα targeted therapies.

Conclusion

I-Mab BioPharma is positioned to benefit from its strong and differentiated pipeline, with promising clinical results and potential out-license deals in 2022. The company has significant cash reserves and a solid financial structure, supporting future R&D and commercialization efforts. Despite recent share price declines, the DCF-based target price suggests a substantial upside. The BUY rating is maintained based on the company's growth potential and pipeline value.