Early HLX43 efficacy expands BD potential, while biosimilars support cash flow

Overview

This report summarizes Goldman Sachs' takeaways on Henlius Biotech following China Healthcare Corporate Day 2026. The core conclusions are that early clinical efficacy for HLX43 strengthens its global BD potential, the biosimilar business provides stable cash flow and accelerates overseas expansion, serplulimab remains a near-term growth driver, and policy disruptions are currently relatively manageable.

Core views

First, as a PD-L1 ADC, HLX43 is supported by updated ASCO data for global Phase 3 development and a potential accelerated approval pathway. The company also emphasizes the need for a strong global partner to unlock value across multiple indications. Second, serplulimab continues to maintain a leading share in small-cell lung cancer, while a new perioperative gastric cancer indication could extend treatment duration and expand market potential. Third, overseas biosimilar expansion benefits from a favorable US regulatory environment. Although domestic VBP creates pricing pressure, cost amortization for mature products and lower selling expenses could cushion the impact on margins.

Analysis framework

The report's assessment is primarily based on management communication during the corporate day, updated ASCO clinical data, global pipeline development plans, BD feasibility, biosimilar regulatory and commercialization trends, and a risk-adjusted DCF valuation framework.

Methodology notes

• Valuation methodsRisk-adjusted DCF

  Assessing the value of pipeline and commercialized assets using discounted cash flow

  Goldman Sachs' 12-month target price of HK$104.79 is based on a 10% discount rate and a 3% perpetual growth rate.

• Factor analysisGS Factor Profile

  Comparing stock characteristics across growth, financial returns, valuation multiples, and composite dimensions

  The report discloses that this framework uses Goldman Sachs' forecast data to calculate standardized percentiles, but the core investment conclusions in this report are primarily based on corporate day takeaways and the DCF.

• M&A/BD assessmentM&A Rank / BD potential

  Assessing the potential value of a company or asset for acquisition, licensing, or partnership

  HLX43's pan-tumor positioning and need for Phase 3 development across multiple indications make the capabilities of global partners critical to unlocking value.

Asset mapping & comparison

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

• Henlius Biotech (02696.HK)

  Research subject

  Strengths

  Positive early efficacy for HLX43, expansion of serplulimab indications, stable biosimilar cash flow, and accelerating overseas expansion.

  Weaknesses

  The innovative drug pipeline remains at an early stage, visibility on global BD timing is limited, and the domestic policy environment still requires monitoring.

  Comparison

  Among covered Chinese biotechnology companies, the company combines a commercialized biosimilar base with the upside potential of an innovative ADC pipeline.

  Risks

  Incomplete realization of BD value, clinical failure, intensifying competition in later-line solid tumor treatment, and talent competition.

• HLX43

  Core innovative pipeline and potential BD asset

  Strengths

  ASCO data show consistent efficacy across multiple lung cancer subgroups, with potential for global Phase 3 development and expansion across multiple indications.

  Weaknesses

  The data require more mature follow-up, and global Phase 3 development requires a strong partner.

  Comparison

  The company positions it as a pan-tumor PD-L1 ADC asset with broader indication coverage than single-cancer projects.

  Risks

  ORR may be insufficient to support accelerated approval, Phase 3 failure, and competition from similar ADCs.

• Biosimilar business

  Source of cash flow and overseas growth

  Strengths

  Mature products have largely completed cost amortization, a favorable overseas regulatory environment may shorten launch timelines, and assets such as Keytruda and Darzalex biosimilars have potential to contribute over the long term.

  Weaknesses

  Domestic VBP may create pricing pressure.

  Comparison

  Compared with the early-stage innovative pipeline, the biosimilar business offers greater certainty and stronger cash flow characteristics.

  Risks

  Price cuts under centralized procurement, overseas commercialization investment, and approval and competitive uncertainty.

Key data

• HLX43 squamous NSCLC PFS6.9 monthsDisclosed at ASCO for patients with squamous NSCLC after multiple prior lines of therapy and post-docetaxel treatment.
• HLX43 AGA-nonsquamous NSCLC PFS6.67 monthsIn patients with nonsquamous NSCLC without actionable genomic alterations.
• HLX43 clinical development20+ trials covering 10+ indicationsThe company emphasizes its pan-tumor positioning and global development potential across multiple indications.
• Serplulimab treatment duration comparisonApproximately 16 months in perioperative gastric cancer vs approximately 6 months in SCLCThe longer treatment duration could significantly expand market potential.
• Expected US approval of bevacizumab biosimilarSecond half of 2026The company may consider establishing an internal sales team.
• Long-term overseas biosimilar revenue targetApproximately US$1bnManagement's target is for 2030-31.
• Target priceHK$104.79Risk-adjusted DCF, 12-month target price.
• DCF assumptions10% discount rate; 3% perpetual growth rateKey valuation parameters disclosed in the report.

Impact & implications

For investment purposes, the report reinforces the combination logic of Henlius Biotech, with biosimilar cash flow support and innovative drug pipelines providing valuation elasticity. If HLX43 is validated by more mature data and achieves global BD, it could become an important catalyst; however, delays in partnerships, difficulties in Phase 3 development, or intensifying competition could pressure valuation realization.

Risks

• Failure to fully realize the global value of pipeline drugs through partners.
• Clinical development failure risks in the early-stage pipeline.
• Intensifying competition in later-line solid tumor treatment.
• Organizational and R&D execution challenges caused by talent competition.
• The impact of domestic anti-corruption measures and biosimilar VBP policy requires a longer observation period.

What to watch

• More mature clinical data and ORR performance for HLX43.
• Progress in the company's discussions with the FDA regarding a global Phase 3 MRCT and potential accelerated approval pathway.
• The timeline for HLX43 global BD negotiations, partner quality, and transaction terms.
• The outcome of NRDL negotiations for the perioperative gastric cancer indication of serplulimab.
• US approval and launch preparations for the bevacizumab biosimilar in the second half of 2026.
• Detailed domestic biosimilar VBP policy rules and their pricing impact.