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Lepu Biopharma (SEHK:2157): Valuation Check After Upfront Licensing Milestone with Excalipoint

Simply Wall St · 2d ago

Lepu Biopharma (SEHK:2157) just ticked off a key milestone, receiving its initial upfront licensing payment from Excalipoint after meeting deal conditions, a concrete step toward monetizing its CTM012 and CTM013 cancer assets.

See our latest analysis for Lepu Biopharma.

Despite today’s softer mood, with a negative 1 day share price return, Lepu Biopharma’s share price has still logged a triple digit year to date gain, while the 1 year total shareholder return, though strong, lags that surge slightly. This hints that momentum is cooling but not broken as investors digest the Excalipoint licensing win and recent RSU approvals.

If this licensing milestone has you thinking more broadly about oncology opportunities, it might be a good time to explore other healthcare stocks that are starting to attract market attention.

With shares more than doubling this year but still trading at roughly half of analyst targets, is Lepu Biopharma a mispriced oncology innovator, or is the market already baking in most of its future growth?

Price-to-Sales of 12x: Is it justified?

On a Price to Sales ratio of around 12 times, Lepu Biopharma trades slightly above its estimated fair P S level and only modestly below peers.

The Price to Sales multiple compares the company’s market value to its annual revenue, a common yardstick for fast growing but loss making biotechs where profits are still some way off.

For Lepu Biopharma, the current 12 times sales implies investors are paying a premium to the fair P S level of about 10.1 times. This suggests the market is already assigning extra value to its oncology pipeline and expected top line expansion.

Yet, versus both Hong Kong Biotechs at roughly 12.4 times sales and a peer group nearer 25 times, this premium looks restrained. That hints that a rerate could occur if its therapies hit key clinical or commercial milestones.

Explore the SWS fair ratio for Lepu Biopharma

Result: Price-to-Sales of 12x (ABOUT RIGHT)

However, setbacks in late stage trials or slower than expected uptake for approved therapies could quickly pressure sentiment and challenge today’s optimistic revenue expectations.

Find out about the key risks to this Lepu Biopharma narrative.

Build Your Own Lepu Biopharma Narrative

If our interpretation does not quite align with yours, dive into the numbers yourself and build a custom view in just a few minutes: Do it your way.

A great starting point for your Lepu Biopharma research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.