Henlius is a leading Chinese biopharmaceutical company dedicated to R&D. Currently, the company has six products approved for marketing in China, including Hansizhuang (Serplulimab), four biosimilars (Trastuzumab, Rituximab, Bevacizumab, and Adalimumab), and one licensed product (Neratinib). Additionally, four of its products have successfully entered international markets. The company's pipeline primarily focuses on oncology, autoimmune diseases, and other therapeutic areas, encompassing multiple First-in-Class (FIC) innovative candidates such as HLX43 (PD-L1 ADC) and HLX22 (anti-HER2 monoclonal antibody).
　　HLX43 (PD-L1 ADC): the global first PD-L1 ADC to enter Phase II clinical trial. Currently, no PD-L1 ADC product has been approved globally. HLX43 is the second global and first Chinese PD-L1 ADC to enter the clinical stage, boasting a favorable competitive landscape. The company has conducted multiple Phase II clinical trials, including non-small cell lung cancer (NSCLC), nasopharyngeal cancer (NPC), as well as head and neck cancer (HNC). In June 2025, the company presented the Phase I data of HLX43 (PD-L1 ADC) in patients with advanced/metastatic solid tumors at 2025 ASCO for the first time. HLX43 demonstrated excellent efficacy and safety in patients with NSCLC and thymic squamous cell carcinoma (TSCC), with an objective response rate (ORR) of 75% in TSCC patients and 40% in squamous NSCLC (sqNSCLC) patients. Given the favorable competition landscape in the PD-L1 ADC market, we believe the firm will secure potential licensing opportunities as HLX43 advances in clinical development.
　　HLX22 (HER2 mAb) is expected to change the SoC of 1L GC. HLX22 is a novel anti-HER2 monoclonal antibody, targeting different epitopes within domain IV of HER2. In combination with trastuzumab, which also targets HER2 domain IV, it can simultaneously promote the endocytosis of HER2/HER2 homodimers and HER2/EGFR heterodimers, increasing HER2 endocytosis by 40-80%. The company announced the updated results of the Phase II study (HLX22-GC-201) of HLX22 for the treatment of 1L HER2+ GC at 2025 ASCO. HLX22 has demonstrated consistent efficacy benefits, with a median follow-up period of 28.5 months, the median progression-free survival (PFS) has not yet been reached, and it is expected to update the first-line standard treatment for HER2-positive gastric cancer in the future. Currently, HLX22 is undergoing an MRCT Phase III clinical trial for the treatment of 1L HER2+ advanced gastric/gastroesophageal junction (G/GEJ) cancer, in combination with trastuzumab and chemotherapy. In addition, the company is actively exploring the use of HLX22 in the treatment of breast cancer. Currently, the combination of HLX22 and trastuzumab deruxtecan (T-Dxd) for the treatment of HER2 low, HR+ locally advanced or metastatic BC is currently under Phase II clinical trial.
　　Hansizhuang targets differentiated indications. Currently, Hansizhaung (Serplulimab) has been approved by the NMPA for multiple indications, including squamous non-small cell lung cancer (sqNSCLC, 1L), extensive-stage small cell lung cancer (ES-SCLC, 1L), esophageal squamous cell carcinoma (ESCC, 1L), and non-squamous non-small cell lung cancer (nsqNSCLC, 1L). Hansizhuang (Serplulimab) is the world's first PD-1 monoclonal antibody approved for the first-line treatment of ES-SCLC. With the approval of ES-SCLC, domestic sales of Hansizhuang have achieved rapid growth, reaching Rmb1.31bn in 2024. In addition, regarding to overseas markets, Hansizhuang has been approved in the EU, Southeast Asia, the UK, and India. At present, multiple international multi-center Phase III clinical trials of Hansizhuang (Serplulimab) are underway. The company's strategy focuses on the layout of differentiated indications, with ongoing research indications including gastric cancer, colorectal cancer, and limited-stage small cell lung cancer. If approved successfully, it is expected to further expand the market space of this product.
　　Multiple products have successfully entered international markets. The company has four products entering global markets successfully, including Hanlikang (four Latin American countries), Hanquyou (over 50 countries or regions, including the US, EU, and Canada etc.), Hanbeitai (two Latin American countries), and Hansizhuang (nearly 40 countries or regions, including the EU and Southeast Asia, etc.). Considering the company's robust biosimilar portfolio, Henlius continues to strengthen collaborations with international partners to enter into overseas markets. Since 2018, the company has entered into multiple collaborations for the global sales of HLX02 (trastuzumab) with Accord, etc. Currently, the company has signed commercialisation licensing agreements with a host of overseas pharmaceutical companies for rituximab, adalimumab, bevacizumab, daratumumab, ipilimumab, among others. Additionally, the Biologics License Applications (BLAs) for HLX14 (denosumab biosimilar) and HLX11 (pertuzumab biosimilar) have been accepted by the FDA, which is expected to further expand the company's biosimilar portfolio.
　　Initiate with BUY. We forecast the company’s revenue to reach Rmb5.96bn in 25E, Rmb6.36bn in 26E, and Rmb7.02bn in 27E, including biological product revenue of Rmb5.17bn, Rmb5.57bn, and Rmb5.81bn, respectively. In addition, we forecast net profits of Rmb790m in 25E, Rmb900m in 26E and Rmb1,140m in 27E. Under the DCF valuation, we derive a target price of HK$71.0. With a 40% upside, we are optimistic about the company's innovative pipeline layout and initiate coverage with a BUY rating.
　　Risks. Delayed R&D progress of core pipelines; uncertainties in clinical development, with lower-than-expected data readouts; lower-than-expected commercialisation of key products; intensified industry competition leading to higher-than-expected GPO price cuts for biosimilars; delayed BLA progress of new drugs.