Yuanta Securities Maintains 'Buy' Rating on Fosun Pharma (02196.HK) Following Licensing Deal with Eisai for Serplulimab in Japan

According to the Zhitong Finance APP, Cathay Securities issued a research report stating that Fosun Pharmaceutical (02196) is expected to achieve net profits of 3.32 billion yuan, 4.68 billion yuan, and 4.77 billion yuan in 2025, 2026, and 2027 respectively, with year-over-year growth rates of +19.9%, +40.8%, and +2.1%. The EPS will be 1.2 yuan, 1.8 yuan, and 1.8 yuan respectively, corresponding to H-share PE ratios of 15X/11X/11X. The H-share valuation is relatively low, and they are optimistic about its long-term development, maintaining a "Buy" investment rating.

The main viewpoints of Cathay Securities are as follows:

Event

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.'s controlled subsidiary, Shanghai Henlius Biotech, Inc., has granted Eisai Co., Ltd. (listed on the Tokyo Stock Exchange, code 4523.T) the rights for the development, production, and commercialization of Serplulimab Injection for oncology indications in Japan. According to the agreement, Eisai will pay Shanghai Henlius Biotech, Inc. up to 155.01 million US dollars in non-refundable upfront and regulatory milestone payments, including an upfront payment of 75 million US dollars and up to 80.01 million US dollars in regulatory milestone payments. Additionally, based on the annual net sales of the licensed product in Japan, the company is eligible to receive up to 233.33 million US dollars in sales milestone payments and can also receive double-digit percentage royalties based on product sales.

Serplulimab Competitiveness Strong

Sulrilimab, a PD-1 monoclonal antibody independently developed by the company, was launched in China in March 2022. It has already covered multiple indications including squamous non-small cell lung cancer (sqNSCLC), extensive-stage small cell lung cancer (ES-SCLC), non-squamous non-small cell lung cancer (nsqNSCLC), and esophageal squamous cell carcinoma (ESCC). In 2024, the product achieved revenue of 1.31 billion yuan, with a year-over-year increase of 17.2%. In terms of international expansion, Sulrilimab received EU approval for marketing in February 2025, becoming the world's first PD-1 monoclonal antibody approved by the EU for first-line treatment of SCLC. The product has also been approved for marketing in the UK, Indonesia, Cambodia, Thailand, Malaysia, Singapore, and India. This authorization granted to Eisai Co., Ltd. for sales in the Japanese market will further expand the overseas market and enhance the accessibility and recognition of the company’s products in the international market.

New Markets and New Indications Under Continuous Development

The U.S. bridging trial for serplulimab in combination with chemotherapy as a first-line treatment for ES-SCLC is proceeding in an orderly manner, while the bridging trial in Japan is also progressing steadily, with a marketing application set to be submitted during Eisai's fiscal year 2026. The company is also actively developing new indications. Currently, the drug registration application for serplulimab in combination with chemotherapy for neoadjuvant/adjuvant treatment of gastric cancer was accepted by the National Medical Products Administration (NMPA) of China in December 2025 and has been granted priority review status. In addition, clinical trials are ongoing for indications such as head and neck squamous cell carcinoma, colorectal cancer, liver cancer, and advanced solid tumors. With the approval of new markets and new indications, serplulimab is expected to maintain rapid growth.

Risk Warning:Progress in new product development and sales fell short of expectations; the price cuts from national drug procurement and national negotiations exceeded expectations, posing risks of goodwill impairment.