GSK Steps Up Investment in B7-H3/B7-H4 ADCs, Further Clarifying Hansoh Pharma’s Overseas Value Realization Path

Overview

The report focuses on two ADC assets licensed by Hansoh Pharma to GSK: Ris-Rez and Mo-Rez. Goldman Sachs believes GSK’s recent significant expansion of the global clinical plans for both assets reflects their inclusion in its long-term oncology strategy and increases the certainty of Hansoh Pharma’s future overseas milestone payments, royalties, and pipeline value realization. The report maintains a Buy rating with a 12-month target price of HK$50.10.

Core views

Ris-Rez and Mo-Rez may become Hansoh Pharma’s most important sources of overseas value over the next decade. GSK’s intensive investment in indications including lung cancer, prostate cancer, ovarian cancer, and endometrial cancer provides a clearer global registration roadmap than some competing assets. Ris-Rez is expected to become an important foundational asset for GSK’s lung cancer franchise and form a portfolio with its ROS1 and ALK targeted therapies; Mo-Rez may leverage Zejula and Jemperli to drive the next wave of innovation in GSK’s gynecologic oncology business. Existing clinical results are competitive, but cross-trial comparisons are not head-to-head evidence and require further data validation.

Analysis framework

The report assesses the probability of global commercialization for the two assets by combining partner R&D investment and changes in clinical stage, non-head-to-head efficacy comparisons with ADCs targeting the same and adjacent targets, indication strategy, and synergies with GSK’s oncology portfolio. Valuation uses a sum-of-the-parts approach, adding the DCF value of innovative drugs to the P/E-based valuation of generic drugs.

Methodology notes

• Valuation methodsSum-of-the-parts valuation

  Separately valuing the innovative drug and generic drug businesses and then adding them together

  The target price is based on sum-of-the-parts valuation, with innovative drugs valued using DCF at HK$281.4bn and generic drugs valued at HK$21.9bn.

• Valuation methodsDiscounted cash flow method

  Evaluating the value of the innovative drug business by discounting future cash flows

  The DCF valuation of the innovative drug segment is HK$281.4bn, the main component of the target price calculation.

• Relative valuationP/E valuation

  Evaluating the generic drug business based on forecast earnings and target P/E multiple

  The generic drug business is valued at 10x FY2026 P/E, corresponding to a value of HK$21.9bn.

• Clinical competitive analysisNon-head-to-head cross-trial comparison

  Comparing ORR, mPFS and mOS disclosed in different clinical trials

  The report compares the clinical metrics of Ris-Rez and Mo-Rez with other ADCs, but notes that differences such as patients’ prior lines of therapy may affect results and should not be treated as equivalent to head-to-head trial evidence.

Asset mapping & comparison

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

• Hansoh Pharma（3692.HK）

  Report subject and Buy-rated investment target

  Strengths

  Has an ADC pipeline with global development potential and receives support from international clinical development and commercialization resources through its partnership with GSK.

  Weaknesses

  Overseas value realization depends on the partner’s execution speed, clinical success, and commercialization performance, while the generic drug business remains affected by centralized procurement.

  Comparison

  GSK’s global clinical layout for related projects is more proactive and clearer than the public roadmaps of some competing assets.

  Risks

  Innovative drug R&D failure, partnership income below expectations, slower-than-expected ramp-up of new drugs, and pressure on generic drug sales.

• Ris-Rez

  Core B7-H3 ADC asset licensed overseas by Hansoh Pharma

  Strengths

  Has achieved the first positive Phase III overall survival result for a B7-H3 ADC, demonstrated competitive ORR, mPFS and mOS in second-line small-cell lung cancer, and received GSK’s investment in multi-indication development.

  Weaknesses

  Cross-trial efficacy comparisons may be biased, and ultimate commercial value still depends on registration trials, regulatory approval, and market competition.

  Comparison

  The report believes its existing second-line small-cell lung cancer data are competitive versus ZL-1310 and ABBV-706, though not based on head-to-head comparisons.

  Risks

  Clinical results failing to replicate, regulatory delays, competition from ADCs targeting the same target or using other mechanisms, and commercialization penetration falling short of expectations.

• Mo-Rez

  Core B7-H4 ADC asset licensed overseas by Hansoh Pharma

  Strengths

  Recorded high ORRs in endometrial cancer and platinum-resistant ovarian cancer, and is supported by five Phase III studies from GSK.

  Weaknesses

  The existing study population may have fewer prior lines of therapy than competitor trials, and the efficacy advantage still requires confirmation from more mature data.

  Comparison

  In the non-head-to-head data listed in the report, its ORR is higher than the results of multiple FRα, TROP2 and B7-H4 ADC studies.

  Risks

  Patient baseline differences leading to overestimation of efficacy, failure in later-stage trials, safety issues, and intensified competition in gynecologic oncology.

• GSK

  Global development partner for Ris-Rez and Mo-Rez

  Strengths

  Has global clinical, regulatory, and commercialization capabilities, and has embedded the two ADCs into its long-term strategies for lung cancer and gynecologic oncology.

  Weaknesses

  Resource allocation and project priorities may change with shifts in internal pipeline and external competition.

  Comparison

  Its clinical expansion pace and public development roadmap are more proactive than those of some competitor partners cited in the report.

  Risks

  R&D strategy adjustments, trial progress delays, or resources being redirected to other oncology projects.

Key data

• 12-month target priceHK$50.10Buy rating maintained, using sum-of-the-parts valuation.
• Reference share priceHK$31.42Share price listed in company-specific disclosures in the report.
• Potential upsideApproximately 59.5%Calculated based on the HK$50.10 target price and HK$31.42 reference share price, excluding dividends.
• Ris-Rez peak sales forecastUS$3bnEstimated peak sales before adjustment for probability of success.
• Mo-Rez peak sales forecastUS$1bnEstimated peak sales before adjustment for probability of success.
• GSK’s new development layoutRis-Rez: four Phase II studies; Mo-Rez: five Phase III studiesCovering lung cancer and prostate cancer, and ovarian cancer and endometrial cancer, respectively.
• Ris-Rez efficacy in second-line small-cell lung cancerORR 53.5%; mPFS 5.9 months; mOS 10.1 monthsThe TOP1i-naïve subgroup showed ORR 59.5%, mPFS 6.3 months, and mOS 14.9 months.
• Mo-Rez efficacy in second-line and above endometrial cancerORR 67%The report states that it outperforms certain FRα, TROP2 and B7-H4 ADCs in non-head-to-head comparisons.
• Mo-Rez efficacy in platinum-resistant ovarian cancerORR 62%Fewer prior treatment lines among enrolled patients may have contributed to better results, pending further validation.
• Innovative drug business valuationHK$281.4bnValued using DCF.
• Generic drug business valuationHK$21.9bnValued using 10x FY2026 P/E.

Impact & implications

GSK’s increased R&D resource investment means the two ADCs will receive stronger support in global registration, commercialization, and indication expansion. This is expected to improve the long-term visibility of Hansoh Pharma’s overseas partnership income and reinforce the valuation logic of its transition from a domestic pharmaceutical company to a global exporter of innovative drug assets. If key trials continue to deliver positive results, milestone payments, royalties, and potential indication expansion could become medium- to long-term valuation catalysts; conversely, clinical failure, development delays, or competitors catching up would weaken expected value.

Risks

• Generic drug sales after centralized procurement fall below expectations.
• Commercialization ramp-up of innovative drugs is slower than expected.
• The innovative drug pipeline faces clinical R&D, regulatory approval, and safety risks.
• Partnership income from global pipeline expansion falls below expectations.
• Cross-trial comparisons are affected by differences in patient baselines and prior lines of therapy, and existing efficacy advantages may not be replicated in subsequent studies.
• Intensifying competition from ADCs targeting the same targets and using other mechanisms may compress market share and pricing room.

What to watch

• Enrollment progress and data readouts for the four Phase II studies of Ris-Rez and related lung cancer and prostate cancer indications.
• Complete Phase III overall survival data for Ris-Rez, regulatory communications, and filing timetable.
• Progress, durability of efficacy, and safety of Mo-Rez’s five Phase III gynecologic oncology studies.
• Whether GSK further expands the indications, combination therapies, and registrational trial layout for the two ADCs.
• Near-term milestone payments, partnership income, and future royalty guidance received by Hansoh Pharma.
• Key clinical data for competing B7-H3, B7-H4, DLL3, FRα, and TROP2 ADCs.
• Innovative drug sales ramp-up and performance of the generic drug business after centralized procurement.