HK Stock Market Move | INNOVENT BIO (01801) rose by over 5% and reached the seventh global strategic cooperation agreement with Eli Lilly. Goldman Sachs pointed out that its stock price is undervalued.

INNOVENT BIO (01801) rose by over 5%, reaching a 5.56% increase at the time of publication, to HK$90.1, with a trading volume of HK$6.03 billion. On the news front, INNOVENT BIO recently announced its seventh strategic collaboration with Eli Lilly. The two companies will work together to advance the global research and development of innovative drugs in the field of oncology and immunology. Under the agreement, INNOVENT BIO will receive a upfront payment of US$350 million. Depending on the achievement of various milestones such as research and development, regulatory approvals, and commercialization, HAITONG INT'L may be eligible to receive milestone payments of up to approximately US$8.5 billion and a sales share of related products outside the Greater China region. It is reported that during yesterday's business progress update conference call, INNOVENT BIO management provided detailed disclosure on the underlying logic, fund allocation, and global strategy of this high-value transaction. Management stated that the upfront payment of US$350 million will be received soon and can effectively cover the company's future overseas clinical investments. HAITONG INT'L believes that the upfront payment and milestone payments will strengthen INNOVENT's financial security cushion, while the sales share will benefit from long-term growth in the global market. The collaboration focuses on the fields of oncology and immunology, which can synergize with INNOVENT's existing core pipeline, such as IBI363 (PD1/IL2) and IBI343 (CLDN18.2 ADC), to enhance overall competitiveness. Goldman Sachs stated that, considering the current market's implied weighted average cost of capital (12%) is high, they believe the current stock price is undervalued, and they give the stock a "buy" rating with a target price of HK$102.85, based on risk-adjusted, discounted cash flow method.