Key Takeaways:
Goldman Sachs raised its 12-month price target on Sino Biopharmaceutical Ltd. (SBP Group) by 8.3% to HKD8.05, citing a new partnership with GSK for a promising hepatitis B treatment.
The bank called SBP Group an "ideal commercial partner" for the drug, bepirovirsen, because of its "nearly four decades of experience and insight in China’s hepatitis market" and a sales force of approximately 2,000 people.
The rating change comes after SBP Group's subsidiary, Chia Tai Tianqing Pharmaceutical Group, secured exclusive commercialization rights for the drug in mainland China. Goldman Sachs maintained its Buy rating on the stock.
The deal positions SBP Group to capitalize on a significant market, as bepirovirsen is a potential first-in-class therapy for the 75 million people in China with chronic hepatitis B. Goldman Sachs analysts estimate the drug has a peak sales potential of around RMB5 billion and raised their 2027-2028 earnings forecasts for SBP Group by 1.1% and 1.7%, respectively.
Under the agreement, SBP Group will manage importation, distribution, and promotion across more than 5,000 medical centers for an initial term of 5.5 years. GSK, which submitted the drug for approval in China in March, will retain regulatory and medical oversight.
The partnership with SBP Group is GSK's second major deal with a Chinese pharmaceutical group. The British drugmaker also announced it was launching the fifth and final tranche of its GBP2.0 billion share buyback program.
The upgrade suggests SBP Group could see a significant new revenue stream, strengthening its hepatitis product portfolio. Investors will now watch for the final drug approval from Chinese regulators, which is expected in 2027.
This article is for informational purposes only and does not constitute investment advice.
