UBS Initiates Coverage on DUALITYBIO-B with "Buy" Rating and HK$320 Target Price

Deep News08-17 11:11

UBS has initiated coverage on DUALITYBIO-B (09606) with a "Buy" rating and a target price of HK$320, based on a risk-adjusted discounted cash flow (DCF) valuation. This target implies a 1.2x risk-adjusted peak sales ratio.

UBS believes the company is currently undervalued, trading at just 0.7x its risk-adjusted peak sales ratio, significantly below the industry median of 1.6x, making the valuation attractive. DUALITYBIO-B is a clinical-stage biotechnology company focused on developing novel antibody-drug conjugates (ADCs).

The bank is optimistic about its four proprietary ADC platforms, which support a broad pipeline of 10 clinical-stage drug candidates. These span monospecific (DITAC platform), bispecific (DIBAC), dual-payload (DUPAC), and non-oncology (DIMAC) applications. Several candidates rank among the top three globally in development progress, and the company has secured collaborations with global pharmaceutical firms such as BioNTech, GSK, BeiGene (06160), and Avenzo, with total transaction value exceeding US$6 billion.

UBS expects DB-1311 (a B7-H3 ADC) to be a key value driver, forecasting peak sales of RMB 38.3 billion, above the consensus estimate of RMB 28.6 billion. The bank believes the market has not yet fully priced in upcoming key data, including combination therapy proof-of-concept data for DB-1311 with a PD-L1/VEGF bispecific antibody in lung cancer (at 2026 WCLC) and non-lung cancer indications (at 2026 ESMO), as well as the global Biologics License Application (BLA) submission for the HER2 ADC, DB-1303.

UBS projects total revenue (unadjusted) will rise from RMB 1.8 billion in 2025 to RMB 22.8 billion by 2035, with EBITDA expected to turn positive in 2030.

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