The Zhitong Finance App learned that CICC released a research report stating that maintaining China Biopharmaceutical's (01177) “outperforming the industry” rating and target price of HK$8.90 corresponds to the price-earnings ratio of 26.5 times and 23.7 times for 2026 and 2027, respectively, implying 73% upward space. On November 4, the company announced that it had reached a strategic option and licensing agreement with Boehringer Ingelheim (BI), covering 6 pre-clinical ADC and TCE projects. The company will receive a total of US$358 million in down payment and recent payments, and will be eligible to receive a total of US$7 billion in potential milestone payments and up to double-digit sales commissions. The bank believes that this platform-based cooperation further reflects the recognition of the company's early innovative R&D capabilities.
CICC's main views are as follows:
Platform-based cooperation was reached with BI, and early research and innovation capabilities were further recognized
The cooperation covers 6 pre-clinical ADC and TCE projects, including 5 from Lixin Pharmaceutical, a wholly-owned subsidiary of the company, and 1 from Beijing Tide. The company will lead early development until the completion of the global Phase I clinical trial. After reaching the agreed milestones, BI can obtain rights for 4 projects in mainland China, Hong Kong, and Macau, as well as global rights for 2 other projects.
Under the agreement, the company will receive a $358 million down payment and recent payments, and will be eligible for a total of $7 billion in potential option exercise, development, registration and commercialization milestone payments, as well as up to double-digit sales commissions.
Large BDs continue to be launched, and cooperation with BI extends from commercialization in China to global R&D
Since 2026, the company has successively authorized lovaxitinib (JAK/ROCK inhibitor) and TQC3721 (PDE3/4 inhibitor) to Sanofi and AstraZeneca, with initial payments of US$135 million and US$200 million respectively, and total potential transactions of US$1.53 billion and US$1.9 billion, respectively.
As early as 2024, the company and BI established cooperation in the Chinese market around tumor pipelines. Among them, HER2 TKI zoneatinib has been approved for first-line and treated patients with HER2 mutant non-small cell lung cancer. This cooperation further extends the scope of cooperation between the two sides from commercialization in China to global R&D.
Increase the minority shareholding of Chia Tai Tianqing and increase the profit contribution of core assets to mother
On September 11, the company announced that it plans to acquire 5% of Chia Tai Tianqing's shares through the acquisition of a shareholding platform for RMB 4.48 billion. After the transaction is completed, the company's indirect shareholding ratio in Zhengda Tianqing will increase from 60% to 65%.
The company estimates that based on adjusted net profit for the past 12 months (LTM) up to the end of June 2026, this transaction could increase the Group's adjusted net profit of about 350 million yuan, an increase of about 7.4%.
Zhengda Tianqing is an important entity in the Group's innovative drug research and development, commercialization and international cooperation. The bank believes that increasing the shareholding ratio of core assets will help listed companies to more fully share the sales growth of innovative drugs and subsequent BD revenue.
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