Chinese Biotech BeiGene Labeled 'Unique Investment' As Analyst Confident In Lead Cancer Drug

JMP Securities initiated coverage on BeiGene Ltd BGNE, noting the Chinese biotech firm as a ‘unique investment opportunity.’

The company’s flagship drug, Brukinsa (zanubrutinib), is among the more recent BTK inhibitors to break into a global market projected to hit $12.2 billion by 2031. Three major players dominate this sector, with Johnson & Johnson‘s JNJ Imbruvica leading the charge, peaking at $8.7 billion in sales in 2021.

Also Read: Cancer Medicines From Merck, Bristol Myers And BeiGene In Question, As FDA Committee To Discuss Limiting PD-1 Drugs For Stomach Cancer.

However, competition intensified when AstraZeneca Plc‘s AZN Calquence and Brukinsa entered the market in 2017 and 2019, respectively.

Analyst Reni Benjamin’s confidence in Brukinsa emerging as a market leader is bolstered by an exclusive survey of 37 doctors, indicating that 80% plan to boost their use of Brukinsa due to its perceived safety and long-term effectiveness advantages.

As Imbruvica’s popularity declines, Calquence and Brukinsa will capture a larger market share. By 2031, Brukinsa is expected to command 55% of the market, potentially generating global sales of $5.4 billion, the analyst adds.

Benjamin says Brukinsa is on track to generate over $2 billion for the company in 2024, with total revenues to reach $3.7 billion.

The analyst has initiated the coverage with a Market Perform rating and a price target of $288.

China ranks as the third-largest healthcare market globally, behind the U.S. and the EU, with expenditures reaching $1.2 trillion.

BeiGene, which offers 14 products in China through various U.S. partners, holds a significant position in this market. Despite limited visibility into China’s regulatory and commercial environment, BeiGene’s sales force has driven annual revenues from China to $1.1 billion.

However, JMP writes that the numbers can drop to $178 million by 2031 due to patent expirations unless additional therapeutics are licensed.

Price Action: BGNE stock is up 1.05% at $199.59 at last check Wednesday.

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