Incidents:
On April 5, 2024, US Eastern Time, Kingsley's subsidiary Legendary Biotech announced that the US FDA has approved CARVYKTI to treat patients with recurrent or refractory multiple myeloma (RRMM) who have received at least previous first-line treatment, including a proteasome inhibitor (PI) and an immunomodulator (IMid) and resistant to lenalidomide. Among B-cell mature antigen (BCMA) targeted therapies approved globally, including CAR-T therapy, bispecific antibodies, and antibody-drug conjugates (ADCs), CARVYKTI is the first and only one approved for second-line treatment of patients with multiple myeloma.
The world's first CAR-T was approved for second-line MM treatment. According to Kantar Health and 2020 ASH report data, excluding MM patients who did not receive any treatment due to remission, treatment gaps, or relapse, we estimate that in 2024 there will be more than 30,000 MM patients receiving second-to-fourth line treatment, which is about 2 times that of terminal (4+ line) patients. Considering that CARVYKTI recorded sales of $500 million in the end of MM (4+ line) treatment in 2023, we believe that as CARVYKTI is approved for second-line treatment and legendary Biologics and Johnson further expand the supply of European and American cell therapy production capacity in 2024, Carvykti is expected to accelerate commercialization.
Profit Forecasts, Valuations, and Ratings
We expect Kingsley Biotech's revenue for 2024-2026 to be US$13.31/20.30/US$2,792 million, with corresponding growth rates of 58.52%/52.54%/37.56%, respectively; net profit to mother of -1.48/0.33/ US$226 million, respectively, with corresponding growth rates of -54.87%/121.99%/596.23%, respectively. In view of the large differences between the company's business segments, we used the segmental valuation method to give the company a target market value of HK$58.4 billion in 2024 and a corresponding target price of HK$27.47, maintaining a “buy” rating.
Risk warning: Clinical trial results fall short of expectations; commercialization of new products falls short of expectations; industry policy fluctuations; increased market competition; changes in exchange rates