RE: CEO Interview on Bloomberg 10th September13 Sep 2021 09:23
Looking at the rapid pipeline and regulatory progress it’s easy to see why our CEO remains confident Hutchmed will be a very large Company by 2025. Today’s valuation will seem very small by then. Looking at Beigene and Gennab, two of my favourite peers, you can see how a company can grow from $5bn to $30bn within a few years as the pipeline commercialises
Most American pre-commercial Biotechs, which is what Tiziana will effectively be after the London de-listing, are acquired by large Pharma. Very few grow organically to become a big pharma. Tils will therefore probably be acquired at some point.
sally, no, it is not the sum of all 3 markets - the leading listing still remains in London and yes, the ADR's are the same shares. In other words the total number of shares:-
"For illustrative purposes only, the 864,367,280 ordinary shares would be equivalent to 864,367,280 depositary interests (each equating to one ordinary share) which are traded on AIM or, if the depositary interests were converted in their entirety, equivalent to 172,873,456 American depositary shares (each equating to five ordinary shares) which are traded on Nasdaq."
With regards to where we will be heading over the next couple of years, In my opinion, we will have a valuation well in excess of $20bn by 2024/5 based on pipeline success and annual revs approaching $1bn. That would put us on a conservative valuation par with Beigene and Genmab.
£70 would value the company at circa $80bn which is a bit ambitious. I put the 2025 valuation at around $40bn aka £35 per share based on continued pipeline success, revs of circa $1.2bn and positive cashflow etc
That is my expectation and that is why I continue to hold a large amount of shares.
I was their first low cost Sippdeal customer about 20 years ago and have been with them ever since. I've had various issues, particularly over corporate actions and not being allowed to enter AGM's because they claimed to have sent letters of authorisation which never arrived. They also called me to to say I wasn't allowed to withdraw cash from my own dealing account! Yet another"training" issue. If you just want a basic trading account and won't want to ask much of them when it comes to corporate actions etc they are OK, but not the cheapest.
Today's announcement of the inclusion in various indexes including the Biotech, Healthcare and Composite is great news and should result in a flurry of institutional buyers. Even more important is the inclusion in the stock connect program and north and southbound trading opening the shares up to mainland chinese investors.
This is a very sensible decision. The London market does not support small Biotechs and there is no Biotech investor ecosystem of any size, unlike the U.S. which has a large specialist Analyst community. A U.S. listing and effectively making the firm a U.S. Company will serve shareholders very well.
Interesting that the title of the slide on Page 42 reads "Figure 65: Our Pricing Estimates for Innovent's Main Molecules"......I'll email them and suggest they correct it! Otherwise this is a very well put together research note. I like the way they provide detailed analysis of peak sales and pricing for each asset and each indication.