Incident: The company disclosed its 2023 annual report. In 2023, the Group achieved revenue of US$840 million (+34.2%) and achieved gross profit of US$410 million (+34.7%). The Group's loss narrowed from about US$430 million in 2022 to about US$360 million, and the adjusted net loss narrowed to about US$300 million from about US$360 million in 2022.
Cell therapy: The commercialization of Carvykti continues to be released, and clinical trials of frontline treatments are progressing smoothly. In 2023, the company's cell therapy external revenue was approximately $290 million (+144.2%), and CARVYKTI (Sidakiolensis, cilta-cel) 2023Q4 and full-year net trade sales were approximately $159 million and $500 million, respectively. The European Medicines Agency (EMA) Committee on Medicines for Human Use (CHMP) recommended expanding the scope of CARVYKTI indications to frontline treatment for adult patients with recurrent and lenalidomide-resistant multiple myeloma; the FDA ODAC will hold a meeting on March 15 to review data from the CARTITUDE-4 study, which supports the use of cilta-cel in the frontline treatment of adult patients with recurrent and lenalidomide-resistant multiple myeloma. On January 3, 2024, Legendary Biotech received an advance payment of $100 million under a global licensing agreement with Novartis Pharmaceuticals AG to develop, produce and commercialize LB2102 and other potential CAR-T therapies specifically targeting DLL3. Since the beginning of 2023, Legendary Biotech's production capacity has expanded by 100%, including the start of clinical production at the new Obelisc plant in Ghent, with plans to achieve an annual production capacity target of 10,000 doses by the end of 2025. As of December 31, 2023, Legendary Biotech has approximately $1.3 billion in cash and cash equivalents, deposits, and short-term investments, which the company believes will provide financial support until the end of 2025.
Non-cellular therapies: The life sciences business maintained a steady growth rate, and the revenue and profit of biopharmaceutical CDMO declined year-on-year.
1) Life science services and products: Achieved external revenue of about US$400 million (+15.6%, fixed exchange rate +16.4%) in 2023, and maintained a steady growth rate; 2) Booming Biotech: Achieved external revenue of US$107 million (-11.2%) in 2023, adjusted operating losses of about US$29.7 million, a year-on-year decline due to industry sentiment; 3) Bestmaster: achieved external revenue of approximately US$42.9 million (+12.2%, fixed exchange rate) in 2023 +22.6%), adjusted operating profit of about US$2 million, accounting for 4.6% of revenue, and industrial synthetic biological products maintained rapid growth.
Profit forecast and rating: The company's 2024-2026 revenue is expected to be US$13.7/22.9/US$3.34 billion, and net profit to mother is -US$180 million/US$120 million/US$120 million. According to the Segment Valuation Act, a reasonable market value of HK$69.105 billion was given in 2024, and the corresponding target price was HK$32.55, giving it a “buy” rating.
Risk warning: New business development falls short of expectations; Boom Biotech's on-hand order transformation falls short of expectations; the company's production capacity expansion progress falls short of expectations; commercialization and promotion of CAR-T products falls short of expectations; risk of policy fluctuations; risk of changes in fair value, etc.