BOCOM International has released a research report maintaining its "Buy" rating on RemeGen (09995), significantly raising its 2026 out-licensing revenue forecast, lifting its 2026 revenue estimate while lowering its 2027-28 revenue projections, primarily reflecting the latest recognition timing of out-licensing transaction revenue and adjustments to product sales forecasts based on 1Q-3Q results. Since the out-licensing business carries a significantly higher profit margin than product sales, the upward revision to this segment's revenue forecast directly drives a substantial improvement in overall profit expectations. Based on a DCF model, the target price has been adjusted to HK$128, implying 97% potential upside, with a rich pipeline of near-term catalysts expected to drive valuation recovery.
The main points from BOCOM International are as follows:
3Q26 product sales accelerated, with the quarter continuing to be profitable. In 3Q26, the company generated revenue of RMB 910 million (same unit hereafter), up 46% year-on-year, of which mainland China commercial sales revenue was RMB 810 million, up 33% year-on-year. By product: 1) Telitacicept 3Q26 sales revenue was RMB 550 million, up 45% year-on-year, mainly due to the sustained solid competitive advantage in SLE and the rapid expansion of new patients and sales scale after approval in the neurology/immunology and gMG fields. Future growth drivers include: a) new indications for IgA nephropathy and Sjogren's syndrome both approved in June, opening new growth space, while the gMG indication continues to penetrate the target market; b) the product was included in the new edition of the National Essential Drug List, which is expected to further expand coverage in primary-level hospitals. 2) Disitamab vedotin 3Q26 sales revenue was RMB 270 million, up 13% year-on-year; its first-line urothelial carcinoma indication in combination with toripalimab was approved in April, and the subsequent medical insurance negotiation results and ramp-up progress are worth watching. As of the end of 3Q26, the commercial teams for telitacicept and disitamab vedotin numbered approximately 900 and 500 people, respectively, and from year-end to early next year the company will increase team allocation in the nephrology field for telitacicept.
In the first three quarters, the gross margin on mainland China commercial sales was 83.6%, broadly flat year-on-year; benefiting from the scale effect brought by product ramp-up, the mainland China commercial sales expense ratio declined 7.7 percentage points year-on-year to 40.5%; R&D expenses fell 22% year-on-year, mainly due to reduced related clinical spending after overseas licensing of products. In 3Q26, the company's non-GAAP net profit attributable to shareholders was RMB 74 million, continuing to achieve quarterly profitability in its base business following 2Q. Management expects overall operations in 4Q26 to continue the positive trend and is confident in achieving the full-year goal of breaking even in the base business.
In 2027, the global development of core pipeline assets enters a harvest period. In 1H27, the company is expected to see three major readouts: global Phase III top-line data for telitacicept in gMG (led by partner Vor Bio, with a BLA submission planned for 4Q27), China Phase III data for telitacicept in oMG, and global Phase III data for disitamab vedotin in combination with Keytruda for 1L UC (led by partner Pfizer, followed by a BLA filing). The global Phase III trial of RC148 in 1L NSCLC is about to enroll its first patient, and in 2027 the company expects to read out part of the Phase II data from the Phase II/III trial in 1L CRC and advance a Phase II study combining with AbbVie's ADC. The company also plans to push multiple bispecific ADCs, trispecific ADCs, dual-payload ADCs, and TCE new molecules into IND filings for clinical trials in 2027.
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