[ET Net News Agency, 14 November 2018] J.P. Morgan lowered its target price for
Genscript Biotech Corporation (01548) to HK$28 from HK$37 and maintained its "overweight"
rating.
The research house said CAR-T development for multiple myeloma has been in line with
expectations, but JPM has seen Genscript announcing a number of initiatives in 2H (more
CAR-T pre-clinical trials, bispecific development, vaccine production and CMO). While
these new initiatives/businesses are likely to add to revenues and profits after three
years, they will likely add to research and development costs and lower profits for the
next three years.
Normally JPM said it would need to adjust its target price for the upside for these new
businesses. However, given current market conditions and negative sentiment, it has not
factored in significant value for these new businesses until they are closer to
commercialization. (KL)