Guojin Securities has released a research report maintaining a "Buy" rating on Simcere Pharma (02096). The report notes the company's continued strengthening of its innovative transformation, with multiple innovative pipelines being licensed overseas. Considering the recognition of upfront and milestone payments in 2026, Guojin Securities has raised its revenue and profit forecasts for that year while maintaining its profit predictions for 2025 and 2027. The firm now expects total operating revenues for 2025-2027 to be RMB 7.63 billion, RMB 10.03 billion, and RMB 11.04 billion respectively (previously RMB 7.63 billion, RMB 9.10 billion, and RMB 11.04 billion). Net profit attributable to shareholders is projected to be RMB 1.15 billion, RMB 1.65 billion, and RMB 1.66 billion (previously RMB 1.15 billion, RMB 1.38 billion, and RMB 1.66 billion), with corresponding EPS of RMB 0.44, RMB 0.64, and RMB 0.64 (previously RMB 0.44, RMB 0.53, and RMB 0.64). The key points from Guojin Securities' analysis are as follows.
On February 3, 2026, the company announced it received a recent milestone payment of $40 million from AbbVie related to SIM0500, a GPRC5D/BCMA/CD3 trispecific antibody. In January 2025, Simcere Pharma entered into an exclusive option agreement with AbbVie for SIM0500. Under the agreement, Simcere is eligible to receive an upfront payment, potential option exercise payments and milestone payments of up to $1.055 billion, as well as tiered royalties on net sales outside Greater China.
SIM0500 is a humanized T-cell engager trispecific antibody that can target two tumor-associated antigens, potentially leading to superior efficacy. It combines a low-affinity, high-targeting-initiation CD3 antibody with two anti-tumor-associated antibodies targeting GPRC5D and BCMA. Through multiple anti-tumor mechanisms, SIM0500 has demonstrated potent T-cell-mediated cytotoxicity against multiple myeloma cells. In April 2024, SIM0500 received Fast Track designation from the U.S. FDA for the treatment of patients with relapsed/refractory multiple myeloma who have received at least three prior lines of therapy and are resistant or intolerant to standard treatments known to provide clinical benefit.
Since the beginning of 2025, the company has successfully licensed out four pipeline assets, indicating a gradual validation of its innovation strategy. These include: ① The licensing option agreement for SIM0500 with AbbVie; ② A collaboration for SIM0505, a CDH6 ADC, with NextCure, which could yield up to $745 million in payments; ③ A collaboration for SIM0613, an LRRC15 ADC, with Ipsen, with a total potential deal value of up to $1.06 billion; and ④ An exclusive licensing agreement for SIM0709, a TL1A/IL-23 bispecific antibody, with Boehringer Ingelheim. For this agreement, Simcere is eligible for an upfront payment of €42 million, plus potential milestone payments of up to €1.016 billion based on development, regulatory, and commercial achievements, alongside tiered royalties on net sales outside Greater China.
The out-licensing of these self-developed pipelines further validates the enhancement of Simcere's innovative R&D capabilities. The fact that its partners include major multinational corporations indicates its innovation capacity is gaining recognition from overseas pharmaceutical companies and other enterprises. There remains potential for further new business development deals involving its dozens of other self-developed pipeline assets and innovative ADC platform.
Risk factors include sales performance falling short of expectations, delays or failures in R&D progress, and risks associated with volume-based procurement policies.