Key points of investment
The accumulation of traditional formulations nurtures innovation, paving the way for Bailey Tianheng to become global: Bailey Tianheng was founded in 1996, and its development has gone through the generic drug stage and the stage of innovation and transformation. In 2010, it laid out innovative drug research and development. The company already has small molecules, multiple antibodies and ADC development and production capabilities. Based in China, with a global perspective, Bailey Tianheng has established R&D centers in China and the US, including US SysTimMune and China's Bailey Pharmaceuticals and Dotter Biotech. Established in the US, SysTimMune is mainly engaged in pre-clinical research and development of innovative biopharmaceuticals. It will further expand clinical trials, drug registration and other businesses, and is expected to promote innovative drug types with global intellectual property rights and global rights overseas.
BL-B01D1 pioneered a dual-antibody ADC and teamed up with BMS to create the next blockbuster: BLB01D1 is the world's first EGFR×HER3 dual-target ADC drug. It has shown positive efficacy signals in multiple epithelial tumor indications, and is expected to become a major pan-tumor single product. In 2023, B01D1 research results were showcased at international conferences such as ASCO, ESMO, and SABCS, showing outstanding data on solid tumors such as non-small cell lung cancer, breast cancer, nasopharyngeal cancer, small cell lung cancer, and head and neck cancer. The indications are still expanding. In December 2023, Bailey Tianheng and BMS reached a global strategic cooperation agreement of more than 8 billion US dollars, with a down payment of up to 800 million US dollars to jointly promote clinical development of BLB01D1 globally. Domestically, Bailey Tianheng has initiated three phase III clinical trials and multiple phase II clinical trials, and phase I/II exploratory clinical trials are testing more than ten potential indications; overseas, BL-B01D1 is currently undergoing global multi-center phase I clinical research (BL-B01D1-LUNG101), and BMS and Bailey Tianheng will launch globally registered clinical trials in the field of lung cancer and breast cancer one after another.
The ADC and multi-antibody platforms are globally differentiated, and the echelon product portfolio is gradually building a global Biopharma: Bailey Tianheng's integrated ADC platform has successfully promoted 4 ADC drugs into phase I/II clinical research, and EGFR/HER3 ADC has successfully verified the advantages of the platform. By designing SEBA (specificity-enhanced bispecific antibody) molecules and GNC (guidance, navigation & control) molecular structures, Baili Tianheng achieved more accurate targeting of multiple antibodies, richer pharmacological activity, and higher tumor killing efficiency. The two innovative platforms have incubated a number of world-leading drugs, including the dual-antibody drug SI-B001 (EGFR-HER3) in phase III clinical trials, dual-antibody SI-B003 (PD-1-CTLA-4), the cornerstone of tumor immunotherapy, and quadruple antibody projects such as GNC-038, GNC-035, and GNC-039 in phase I.
Profit forecast and investment rating: The company built innovative technologies such as ADC, dual antibody, quadruple antibody, etc., and BL-B01D1, a major dual-antibody ADC product, went overseas, and the development of various major products progressed smoothly. We forecast the company's revenue for 2023-2025 to be 562 million/6.034 billion/ 2.018 billion, respectively. The sharp increase in revenue in 2024/2025 was mainly due to confirmed down payments and milestone payments from BMS. Considering the company's product barriers, innovative attributes and overseas value, we believe that Baili Tianheng has great potential for growth. First coverage, giving a “buy” rating.
Risk warning: R&D progress falls short of expectations, data disclosure falls short of expectations, overseas clinical progress falls short of expectations, global cooperation cancellation risks, industry policy risks, etc.