The innovation strategy is clear, the comprehensive layout is accurate, and the combined drug Lepu Biotech focuses on precise tumor treatment. The R&D pipeline covers drugs with various structural forms such as antibodies, ADCs, bispecific antibodies, and oncolytic viruses.

The company focuses on accurate matching of PD-1 to create a diverse and comprehensive combination of drugs: around the “PD-1+ADC” forward-looking layout, the EGFR ADC and HER2 ADC combined PD-1 treatment plan is currently in phase II clinical stage; the oncolytic virus CG0070 and PD-1 are being prepared for clinical trials in combination with oncolytic virus CG0070 and PD-1 for non-intramuscular bladder cancer.

ADC drugs achieve differentiated layout through refined technology and speed

Lepu Biotech introduced Synaffix's coupling technology, optimized the design, and continuously iterated the ADC technology platform; it also aimed at new indications or differentiated target layouts to avoid piles and achieve breakthroughs.

MRG003 has submitted a BLA application and became the first approved EGFR-ADC in China; CMG901 is the first Claudin 18.2 ADC to enter clinical phase 3, making the fastest progress in the world; MRG004 is the fastest progressing domestically produced TF-ADC; under the HER2 ADC internal volume, MRG002 lays out indications for breast cancer liver metastasis, and there are clinical differences; MRG006A is expected to become the first domestically produced GPC3 ADC to be clinically applied.

Commercialization+BD two-wheel drive, amplifying pipeline value

Lepu Biotech's Pritrizumab began commercialization in 2022, and continued to expand new indications and increase revenue through joint use with ADC.

The company actively seeks BD to expand the commercial value of pipelines. CMG901 has successfully gone overseas; the indications for MRG003 treatment of nasopharyngeal cancer have successively been approved by the FDA as an orphan drug, fast track, and breakthrough therapy, while clinical development has been carried out in China and the US; MRG004A has seen initial positive efficacy in pancreatic cancer and has been granted orphan drug qualification by the FDA, laying a good foundation for internationalization.

Profit forecast and investment rating: The company is studying a variety of potential FIC drugs, and the ADC pipeline is about to enter the harvest period. Based on the competitive landscape and pipeline progress, we forecast Lepu Biotech's revenue for 2024/2025/2026 to be 0.306/0.504/0.87 billion yuan, respectively. The valuation was carried out using cash flow discounting and pipeline sales peak multiples. The corresponding market values were HK$10.08 billion and HK$11.41 billion, respectively. First coverage, giving a “buy” rating.

Risk warning: risk of drug candidate development falling short of expectations; risk of related technology falling behind; risk of third party cooperation; risk of loss of core talent; business risk.