Key Takeaways:
- Product sales rose 112% to RMB657 million, beating Goldman's RMB600 million forecast
- Net profit of RMB388 million swung from a loss, aided by settlement income
- Goldman raised FY26 EPS forecast to RMB2.3, kept Buy with HKD581.2 target
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Kelun-Biotech swings to profit as drug sales jump 112%
Kelun-Biotech swung to a first-half net profit of RMB388 million as product sales jumped 112% to RMB657 million, beating analyst forecasts.
"There is going to be a major change in the business structure," Chief Executive Ge said on the earnings call, as the company shifts from a collaboration-driven model toward commercial-stage revenue.
Total revenue was RMB978 million, roughly flat from a year earlier, while gross profit reached RMB736 million for a margin of 75.36%. The profit swing was aided by RMB702 million in settlement income from MediLink Therapeutics and a RMB140 million US withholding tax refund, according to the company. R&D expenses climbed 25.7% to RMB768 million as late-stage trials expanded.
Goldman Sachs raised its FY26 EPS forecast for the biotech to RMB2.3 from RMB1.39, citing faster-than-expected sac-TMT sales after the TROP2 antibody-drug conjugate entered the National Reimbursement Drug List in January. The broker trimmed its price target to HKD581.2 from HKD582.95 and kept a Buy rating. Shares rose 3.5% on the day.
The results mark a turning point for the Chengdu-based company, which now has four approved products covering eight indications. sac-TMT, sold under the brand 佳泰莱, has won approval for four indications including second-line triple-negative breast cancer and EGFR-mutant non-small cell lung cancer, with two more applications under review. The commercialization team has grown to more than 800 people, nearly doubling year over year, and now covers 2,000 hospitals across 30 provinces.
Global expansion is accelerating through a partnership with Merck Sharp & Dohme, which has 17 ongoing Phase 3 studies of sac-TMT. In May, MSD said the TroFuse-005 registrational trial met its primary endpoints of overall survival and progression-free survival in advanced or recurrent endometrial cancer, the first global Phase 3 study to show both benefits for an ADC in that setting.
The profit swing signals management expects commercial revenue to keep outpacing collaboration income, with full-year product sales guided to at least double from 2025. Investors will watch the OptiTROP-Lung06 Phase 3 data for first-line PD-L1-negative non-small cell lung cancer, due at the European Society for Medical Oncology congress, which Goldman said could remove key risks for sac-TMT's global Phase 3 development.
This article is for informational purposes only and does not constitute investment advice.
