Gan & Lee Pharmaceuticals Corporate Day Key Takeaways: Internationalization and Innovative Pipelines to Drive the Next Growth Phase

Overview

This report is a company research meeting note from Goldman Sachs following the 2026 China Healthcare Corporate Day, focusing on Gan & Lee Pharmaceuticals Co. management's comments on international expansion, R&D pipeline progress, and operating guidance and outlook. The report believes the company is entering a new growth phase, with growth pillars including a stable domestic China insulin business, accelerating overseas commercialization, and long-term upside from innovative drugs represented by GZR18 and GZR4.

Core views

The core views are: first, international business is shifting from an option into an actual growth driver, particularly in Europe, Brazil, and other emerging markets; second, the domestic insulin business remains supported by stable prices, volume growth, and an improved product mix before the next VBP adjustment; third, if GZR18 once-every-two-weeks GLP-1 and GZR4 once-weekly basal insulin are filed by the end of 2026 or early 2027 as planned by management, they will materially improve the company's long-term growth trajectory; fourth, US filing remains delayed, with no approval expected in 2026, representing one of the near- to medium-term uncertainties.

Analysis framework

The report evaluates the quality of the company's growth and its target price by combining Corporate Day management discussions, product commercialization progress, clinical development timelines, the impact of domestic centralized procurement and tax policies, and an SOTP valuation framework. It applies exit P/E valuation to mature China and emerging-market businesses and DCF valuation to US, European, and innovative drug businesses.

Methodology notes

• Valuation methodologySOTP

  Sum-of-the-parts valuation

  The 12-month target price of Rmb77 is based on an SOTP methodology, valuing and aggregating the China and emerging-market businesses, US and European businesses, and innovative drug business separately.

• Valuation methodologyDCF

  Discounted cash flow

  The US and European businesses and innovative drug business are valued using a DCF methodology. The report discloses a 10% discount rate and 2% terminal growth rate.

• Valuation methodologyExit P/E

  Exit P/E

  The China and emerging-market businesses use a five-year exit P/E methodology, referencing the global peer group's 17.9x one-year forward P/E.

• Factor frameworkGS Factor Profile

  Growth, financial returns, valuation multiples, and composite percentile

  The Goldman Sachs Factor Profile compares individual stocks' positions relative to the market and industry peers across growth, financial returns, valuation multiples, and composite metrics, providing investment context.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 603087.SS

  Core covered stock

  Strengths

  One of China's insulin industry leaders, with a stable domestic base, initial overseas commercialization, approved European products, Brazil PDP revenue contributions, and innovative pipelines including GZR18 and GZR4.

  Weaknesses

  US filing remains delayed, with FDA inspection remediation constrained by production scheduling; the 2026 VAT adjustment will suppress reported revenue and profit.

  Comparison

  The report values the company's China and emerging-market businesses by reference to the global peer group's 17.9x one-year forward P/E, while comparing it with Chinese healthcare companies such as Aier Eye Hospital, Mindray, and Tonghua Dongbao within the coverage universe.

  Risks

  US insulin analog launches slower than expected, US ramp-up slower than expected, and R&D progress for pipelines such as GLP-1 and next-generation insulin slower than expected.

Key data

• Target priceRmb7712-month target price based on SOTP valuation.
• Analyst ratingBuyThe report states that Goldman Sachs maintains a Buy rating on the company.
• Number of commercialization countries21 countriesNumber of countries where the company's international business has achieved commercialization.
• Number of market-access countries55 countriesNumber of countries where the company has obtained market access.
• Cumulative number of approvals80Cumulative approvals obtained by the company's international business.
• European sales cadenceCommercial shipments to begin by the end of 2026, with 2027 as the first full sales yearInvolving insulin glargine, insulin aspart, and insulin lispro.
• 2027 European shipment targetTens of millions of vialsManagement's expectation for 2027 shipment volume.
• Total revenue from Brazil PDP projectAt least Rmb3bnExpected total revenue from the 10-year PDP project; Rmb120mn was recognized in 2025.
• Brazil PDP project net marginApproximately 30%Management stated that the net margin is broadly comparable to that of the China business.
• GZR18 filing timingEnd of 2026 or early 2027Management's expected timing for submitting the NDA for the weight-management indication.
• GZR4 filing timingEnd of 2026 or early 2027Phase III data have been read out for the once-weekly basal insulin.
• Domestic insulin pricing windowExpected to remain broadly stable through the end of 2027, before the next VBPManagement's assessment of the domestic China insulin pricing environment.
• 2026 tax-rate impactVAT adjusted from 3% to 13%Expected to weigh on reported revenue and profit for the full year.

Impact & implications

If management's guidance is delivered, Gan & Lee's investment thesis will expand from a single focus on domestic insulin import substitution to a combination of stable domestic cash flow, volume growth in Europe and emerging markets, and joint contributions from GLP-1 and next-generation insulin innovative pipelines. In the short term, domestic VBP renewal, US FDA review feedback, the start of European commercial shipments, and recognition of Brazil PDP revenue will influence the market's pricing of the growth cadence; over the medium to long term, the successful filing, approval, and commercialization of GZR18 and GZR4 will be key to a valuation re-rating.

Risks

• US FDA inspection remediation and filing progress could be delayed further; the report states that no US approval is expected in 2026.
• US insulin analog launches or ramp-up could be slower than expected.
• R&D, filing, or commercialization progress for GZR18, GZR4, and other pipelines could be slower than expected.
• The increase in VAT from 3% to 13% in 2026 will create full-year pressure on reported revenue and profit.
• If pricing pressure in the next round of insulin VBP exceeds expectations, it could weaken the profitability of the domestic base business.
• International expansion depends on partners, market access, shipment cadence, and local commercialization execution. Slower-than-expected ramp-up in Europe or emerging markets would affect the realization of growth.

What to watch

• US FDA review feedback and inspection-remediation progress for the company's insulin products.
• The rules, pricing, and volume-price impact of insulin VBP renewal at the end of 2027.
• Whether European commercial shipments begin by the end of 2026 as planned by management, and the sales ramp in 2027, the first full sales year.
• Subsequent revenue recognition and margin realization for the Brazil PDP project.
• Whether the NDA for the GZR18 weight-management indication is submitted by the end of 2026 or early 2027.
• Whether GZR4 once-weekly basal insulin is filed by the end of 2026 or early 2027.
• Clinical and partnership progress for early-stage platform assets including GZR101, GZR102, PROTAC, ADC, and AAV.