Maxim Group Starts BeiGene, Ltd. (BGNE) at Buy
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Maxim Group initiates coverage on BeiGene, Ltd. (NASDAQ: BGNE) with a Buy rating and a price target of $41.00.
Analyst Gabrielle Zhou commented:
- BeiGene's BTK inhibitor (BGB-3111) is going pivotal. We view 3111 as a de-risked, high-value asset in the rich BTK world of therapeutic kinases. Recall that Imbruvica (AbbVie) is indicated for multiple hematological malignancies. The compound was acquired through the $21B acquisition of Pharmacyclics. AstraZeneca recently acquired 55% ownership of Acerta, driven by interest in its BTK inhibitor, for $4B. As such, we can argue that 3111, based on its clinical profile and scarcity value, supports BeiGene's valuation and potential as the company works to bring the next BTK to market.
- Not just BTK, but a PD-1 too. We believe that, ultimately, PD-1 checkpoint antibodies could emerge as the largest new drug class in oncology, with each checkpoint entering the space (just as we see in other therapeutic areas) exhibiting nuanced differences. As such, we see value in BeiGene's humanized PD-1 (BGB-A317) as a potentially differentiated checkpoint and one with access to the domestic Chinese marketplace. A317 is currently in dose-escalating studies and is being evaluated as both a monotherapy and in combination (BTKs).
- Bottom line. BeiGene, as a China-based company, brings unique advantages in the ability to commercialize its own pipeline in the country. The company staffs a fully integrated R&D center in Beijing and a manufacturing plant in Suzhou, with operations centers in both Beijing and Shanghai.
Shares of BeiGene, Ltd. closed at $30.98 yesterday.
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