BEIGENE JPM2025 releases positive news, multiple international investment banks continue to be optimistic about the company's prospects

According to the Zhitong Finance APP, recently, several investment banks including Goldman Sachs, China Merchants Bank International, Pudong Development Bank International, and Nomura Securities have released the latest research reports, successively raising the target price for Beigene (ONC.US, 06160, 688235.SH) and giving it a "buy" rating, continuing to be optimistic about the company's prospects, stating that it has reached a critical turning point where annual operating profit is turning positive and a batch of innovative products with FIC/BIC potential are emerging.

Among them, Goldman Sachs raised the 12-month target price for Beigene's U.S. stock from the previous $308.82 to $319.76, and the target price for its A-shares from RMB 244.59 to RMB 256.76, reflecting a high recognition of Beigene's global market layout, R&D strength, and product commercialization potential.

The institutions pointed out in the latest research report that Beigene has made significant progress across its entire product portfolio, with a notable improvement in financial conditions, a promising early-stage R&D pipeline, and excellent performance of Zebutini as a leading asset in the market. Many institutions are optimistic about Beigene's outstanding performance in the industry and future growth potential, raising the company's target price and maintaining an optimistic outlook on its product value enhancement and future profit growth.

Public information shows that from January 13 to January 16, at the 43rd JPMorgan Healthcare Conference (referred to as "JPM Conference"), Beigene showcased its main strategic direction for 2025 to the global industry, stating that the company will continue to strengthen and consolidate its leadership in the hematology field and advance a series of oncology R&D pipelines.

Expected to break even by 2025, deep layout in hematological tumors

At the 2025 JPM Conference, Beigene's management provided a clear profit timeline guidance for the first time, expecting to achieve GAAP operating profit breakeven in 2025, one year earlier than market expectations.

Previously, Beigene had achieved Non-GAAP operating profit for two consecutive quarters (with profits of $65.63 million and $48.46 million in 3Q24 and 2Q24, respectively). Institutions pointed out that in the $12 billion CLL market, the company's core product Zebutini ranks first in new patient prescriptions in the U.S. In the first three quarters of 2024, Zebutini's global sales exceeded RMB 12.9 billion, totaling about $1.8 billion, continuously breaking through the "billion-dollar milestone" achieved by the company in 2023.

At the JPM Conference, Beigene stated that in order to further consolidate its leadership in hematological tumor treatment, it is progressively laying out based on Zebutini, using the potential best-in-class BCL-2 inhibitor sonrotoclax and the targeted BTK chimeric degradation-activated compound (CDAC) BGB-16673 as key anchors.

Based on research analysis, Goldman Sachs, Pudong Development Bank International, and others emphasized the potential of BCL-2/BTK-CDAC in the CLL field in their reports, and held an optimistic view on the fixed-duration therapy of Zebutini combined with sonrotoclax in first-line CLL treatment, expecting to complete enrollment in the first quarter of 2025.

In the future, in the field of CLL treatment, Beigene has a potential best-in-class drug combination, including various therapies such as BTK inhibitor monotherapy, BTK + BCL2 inhibitor combination (with Phase I TN CLL deep sustained remission data to be announced at 2024 ASH, N=137), and BTK CDAC ± BTK/BCL2 inhibitors Establish a comprehensive moat.

The R&D pipeline for solid tumors is accelerating, with research efficiency surpassing industry levels

In addition, at the JPM conference, Beigene disclosed its latest R&D pipeline as of January 6, 2025, including over 25 early-stage pipelines in Phase 1 clinical research, as well as over 15 pipelines in Phase 2 and 3, covering various molecular types such as small molecules, antibodies, antibody-drug conjugates (ADC), and CDAC. Among them, up to 7 products are expected to achieve peak sales targets of USD 2 billion or more, including several solid tumor pipelines (small molecules, ADCs, degraders, etc.) and IRAK4 CDAC in the autoimmune field.

In the solid tumor field, research reports indicate that Beigene's approved PD-1 product, Tislelizumab, has successfully expanded its indications in the U.S. to first-line treatment for gastric cancer, which is expected to have a positive impact on future sales. Additionally, Beigene is rapidly advancing potential differentiated projects targeting key cancer types such as breast cancer, gastrointestinal cancer, and lung cancer, leveraging its strong research capabilities and various technology platforms. The company noted that over 10 new molecules are expected to read out clinical proof of concept (PoC) data within the next 6-18 months. From 2025 to 2026, the company will also see multiple R&D pipelines reaching new late-stage clinical milestones.

Institutions pointed out that in terms of development speed, Beigene takes an average of 8-9 months from GLP toxicology trials to the first human trials, which is 30% faster than the industry average; it takes about 6 weeks to enroll patients in each dose escalation group, which is 3 times faster than the industry average; the interval between dose escalation and dose expansion is only 3-5 weeks, which is 50% faster than the industry average. The efficient R&D advancement reflects the strong execution capability of the company's clinical team. Furthermore, in 2024, Beigene is set to have 13 new molecules enter clinical trials (vs. 5 in 2023), showcasing its unexpectedly high early R&D efficiency and execution capability.

It is noteworthy that cost reduction and efficiency enhancement have become the key to Beigene's operating profit turning positive. In recent years, Beigene has established a global clinical team of over 3,600 people through extensive global layout, essentially achieving a reduction in reliance on CROs. Since 2019, the proportion of clinical trials executed through CROs has decreased from 77% to 5% by 2024. At the same time, Beigene has achieved a steady decline in sales expense ratio under refined management. With core products continuously contributing revenue and clear sales expectations for backup pipelines, the company's sustainable profit path has become evident