Cathay Securities and Haitong Securities: Initiates "Buy" rating on LEPU BIO-B, MRG003 expected to be approved domestically soon
CITIC Securities has initiated coverage on LEPU BIO-B with a rating of "Buy" and a target price of RMB 9.55 / HKD 10.38. It is expected that the operating revenues for 2025-2027 will be RMB 853 million / RMB 1.204 billion / RMB 1.665 billion, respectively. The company's MRG003 is about to be approved and has established multiple oncology product pipelines, covering immunotherapy, ADC targeted therapy, and oncolytic virus drugs. MRG003 is expected to receive CDE priority review qualification in 2024 and submit NDA for review in 2025
According to the Zhitong Finance APP, Guotai Junan has released a research report stating that it has initiated coverage on LEPU BIO-B (02157) with an "Overweight" rating. It predicts that the operating revenue for 2025-2027 will be 853 million / 1.204 billion / 1.665 billion yuan, referencing a comparable company's average PS of 34.1X for 2025. Considering the company's comprehensive product layout and the imminent approval of MRG003, it assigns a 23X PS for the company in 2025, corresponding to a reasonable valuation of 10.87 yuan / 11.81 HKD; referencing a comparable company's average PB of 18.7X, and given that comparable companies have relatively low net assets, it assigns a 25X PB for the company in 2025, corresponding to a reasonable valuation of 9.55 yuan / 10.38 HKD. Based on both PS and PB valuations, applying a cautious principle, it sets a target price of 9.55 yuan / 10.38 HKD for the company.
The report states that the company has established multiple oncology product pipelines covering three major areas: immunotherapy, ADC targeted therapy, and oncolytic virus drugs. The company uses anti-PD-1 antibody candidate drugs as the cornerstone of its immunotherapy, develops innovative ADCs through an advanced ADC technology development platform, and differentiates its layout in oncolytic viruses, aiming to develop more optimized and innovative drugs to better serve the unmet clinical needs of cancer patients. Additionally, the company is actively exploring combination therapies of PD-L1 and ADC drugs.
The company's MRG003 monotherapy for the treatment of R/MNPC has received priority review qualification from the CDE in September 2024 and is expected to submit an NDA review in March 2025, with a high likelihood of domestic approval in the near future. In terms of combination therapy, in September 2025, MRG003 in combination with the PD-1 antibody Putilizumab HX008 has been officially included by the Center for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA) as a breakthrough therapy for the indication of recurrent or metastatic nasopharyngeal carcinoma that has failed at least platinum-based and PD-1/L1 treatments
