BeiGene Earnings: We Lift Valuation on Better-Than-Expected Brukinsa Sales; Shares Fairly Valued

We slightly raise our fair value estimate for no-moat BeiGene to HKD 132 from HKD 125 following better-than-expected Brukinsa drug sales. Brukinsa revenue in the first nine months of 2024 was USD 1.8 billion, more than doubling from a year prior and almost reaching our full-year forecast of USD 1.9 billion. We believe the strong sales growth is largely attributable to Brukinsa acquiring more market share from existing drugs. Evidence for this can be seen in the 7.2% sales decline of AbbVie’s Imbruvica in the same period. We lift our Brukinsa annual sales forecast to USD 2.2 billion while keeping other assumptions largely unchanged. As a result, our respective 2024 and 2025 revenue forecasts are nudged slightly higher to USD 3.7 billion and USD 4.6 billion from USD 3.4 billion and USD 4.2 billion. We continue to view BeiGene shares as fairly valued, and we think investors should wait for a better entry point.