[ET Net News Agency, 21 January 2020] Citi Research lowered its target price for 3SBio
(01530) to HK$16 from HK$25 and maintained its "buy" rating.
The research house said 3SBio's major drug YiSaipu (YSP) is under pressure after its
competitor Humira and Remicade NRDL (National Reimbursement Drugs List) inclusion. Humira
accepted 60% ASP cut and annual cost comes to Rmb33.6K. While YSP does not cut ASP but
adopted new PAP (patient assistance program) strategy of "buy 20 and get 28 for free" with
annual cost down to Rmb19.3K at a 42% discount to Humira's NRDL price.
Citi lowered its FY2019-21 earnings by 3-12%. While most investors are concerned about
the company's growth in the next few years, Citi thinks further valuation re-rating
requires stronger execution capability and better sales delivery. (KL)