Shenwan Hongyuan Group Co., Ltd. issued a research report stating that ZAI LAB (09688) is expected to achieve non-GAAP operating profit in the fourth quarter of 2025, driven by commercialized product sales growth and localized production deployment. The firm projects the company's revenue for 2025-2027 at $553 million, $802 million, and $1.203 billion respectively, with net profit attributable to shareholders of -$134 million, $15 million, and $173 million for the same period. Based on a DCF model, the target price is set at HK$35.2, representing 39% upside potential. The firm initiates coverage with a "Buy" rating, optimistic about the company's innovative pipeline layout.
Key investment highlights from Shenwan Hongyuan Group Co., Ltd.:
ZAI LAB is an innovative global biopharmaceutical company in the commercialization stage. Through licensing-in strategies and proprietary R&D, the company currently has seven products approved for market in China, including four oncology products (Zejula, Optune, Qinlock, and Welireg), one immunology product (Efgartigimod), and two infectious disease products (Nuzyra and DOPTELET). Additionally, the company maintains an extensive product pipeline covering oncology, immunology, neuroscience, and infectious diseases.
Core Products Drive Sustained Sales Growth with New Products Expanding Portfolio
Since 2019, following the domestic approval of its first commercialized product niraparib, the company now has seven commercial products. In 2024, total revenue reached $399 million, up 50% year-over-year, primarily driven by strong sales performance of Welireg/Welireg and Nuzyra. For new products, the company submitted marketing applications for KarXT and vetisotamab (TF ADC) to NMPA in the first half of this year. Furthermore, the company expects to submit a marketing application for datopotamab deruxtecan for first-line gastric cancer to NMPA in the second half of this year. With continued sales growth of existing commercial products and future approvals of new products including KarXT, datopotamab deruxtecan, ZL-1310 (DLL3 ADC), and povetacicept, the company projects revenue could reach $2 billion by 2028.
Efgartigimod Multi-Indication Expansion Positioned as Blockbuster in Autoimmune Space
As the world's first FcRn antagonist, Efgartigimod received FDA and NMPA approvals in 2021 and 2023 respectively for treating generalized myasthenia gravis (gMG). Beyond the approved indications of gMG and CIDP, the company continues exploring additional indications for Efgartigimod, including thyroid eye disease (TED), myositis, Sjögren's syndrome, and lupus nephritis (LN), potentially covering broader patient populations across neurology, rheumatology, nephrology, and ophthalmology departments. Efgartigimod's domestic sales reached $94 million in 2024, representing 835% year-over-year growth. With continuous indication expansion and approval of new formulations, Efgartigimod is expected to maintain strong sales momentum.
Actively Advancing Global Rights Pipeline with FIC/BIC Potential
The company actively expands multiple global rights pipeline assets, primarily focusing on ADC and bispecific antibody platforms, including DLL3 ADC, LRRC15 ADC, ROR1 ADC, PD-1/IL-12, and autoimmune product ZL-1503 (IL-31/IL-13R). Notably, ZL-1310 has received Fast Track designation from the U.S. FDA. In June 2025, the company presented positive data from ZL-1310's global Phase Ia/Ib clinical study at the 2025 ASCO Annual Meeting, demonstrating clinically meaningful anti-tumor activity and favorable safety profile. The company expects to initiate a global pivotal study for ZL-1310 in second-line extensive-stage small cell lung cancer (2L ES-SCLC) in the second half of this year. Additionally, the company maintains multiple undisclosed pipeline assets in clinical preparation stage, expecting to add at least one new investigational new drug (IND) application annually.
Risk Factors: Core pipeline development progress below expectations; uncertainties in new drug clinical development with data readouts falling short of expectations; core product commercialization sales below expectations; drug price reductions exceeding expectations; new drug approval progress below expectations.