Kelun-Biotech: A Commercializing China ADC Franchise Priced for Much of Its sac-TMT and MSD Global Success

The first stage of the company was platform formation. Kelun-Biotech describes more than a decade of accumulated ADC development experience and positions OptiDC as its proprietary platform. In practical terms, the important point is not the branding. It is that sac-TMT was not a lucky one-off discovery. By 2026 the company had more than 30 ongoing innovative-drug projects, more than 10 clinical-stage assets, two marketed ADCs, and several partnered assets beyond sac-TMT, including SKB571 with MSD, SKB378 with Windward/Harbour BioMed, and SKB105 with Crescent. An investor does not have to believe every early program will work to see the shape of the machine: Kelun-Biotech has become a repeatable drug-conjugate shop, not just a single-asset vehicle.

The second stage was external validation. In May 2022, Merck exercised its option on Kelun-Biotech’s TROP2 ADC program including sac-TMT. The economics disclosed by Merck are unusually important because they anchor the entire ex-China value case. Merck paid US$30 million on option exercise, committed another US$30 million upon specified project activities and US$25 million upon technology transfer, and agreed to make quarterly 2022–2023 R&D funding payments aggregating up to US$111 million. Beyond that, Kelun became eligible for up to US$90 million in development milestones, US$290 million in first-commercial-sale milestones and US$780 million in sales milestones, plus tiered royalties from the mid-single digits to the low double digits on net sales. Those figures are specific to the sac-TMT/TROP2 program disclosed in Merck’s filing; they are separate from the larger 2023 multi-ADC collaboration economics. This distinction matters because many investor discussions blur the two.

The third stage was public listing. Kelun-Biotech listed in Hong Kong on 2023-07-11 under Chapter 18A. The IPO marketing angle was classic late-18A biotech: platform depth, ADC leadership in China, a de-risking partnership with Merck, and the possibility that sac-TMT could define the company. Shares opened at HK$60.6, while Reuters reported the IPO aimed to raise about US$208.6 million before final sizing and later disclosures put gross proceeds at about US$200 million with the over-allotment option exercised. At that point, the market still mostly understood Kelun-Biotech as a future clinical winner rather than an operating company.

The fourth stage was the move from data to labels. Sac-TMT first gained China marketing authorization in November 2024 for adult patients with unresectable locally advanced or metastatic TNBC after at least two prior systemic therapies. In March 2025 it gained China approval in EGFR-mutant locally advanced or metastatic non-squamous NSCLC after EGFR-TKI therapy and platinum-based chemotherapy. By February 2026 the company announced a fourth approved sac-TMT indication in HR+/HER2- metastatic breast cancer after endocrine therapy and at least one chemotherapy line in the advanced setting. The same February 2026 announcement also clarified that sac-TMT by then had four marketed China indications, including a second EGFR-mutant NSCLC label after EGFR-TKI progression alone. That sequence changed the commercial equation. Kelun-Biotech was no longer waiting for its first launch; it was building a multi-label franchise around one lead ADC.

The fifth stage is the one investors are pricing now: earlier-line expansion and ex-China scale-up. Two events define it. One is China: the NMPA accepted the sNDA for sac-TMT plus pembrolizumab as first-line treatment for PD-L1-positive NSCLC in May 2026, and the application entered priority review. The other is ex-China: MSD had expanded its global Phase III program to 17 ongoing studies by the March 2026 annual-results announcement, spanning breast cancer, lung cancer, gynecologic cancer, gastric/gastroesophageal adenocarcinoma, and urothelial cancer. When investors pay a premium multiple to Kelun-Biotech, this is what they are paying for.

The financial history mirrors that strategic arc. Reported revenue has been lumpy because milestone, collaboration and development-service income still contributes heavily. In 2025, total revenue rose only 6.5% to RMB2.06 billion, but that headline understated the real shift underneath: revenue from product sales rose to RMB542.7 million from RMB51.7 million in 2024 as commercialization started to matter. Gross margin rose to 71.9% from 65.9%. Selling and distribution expense, however, jumped to RMB475.3 million from RMB182.7 million because launches began in earnest. R&D remained heavy at RMB1.32 billion. The company therefore still posted a net loss of RMB382.0 million. This is what a commercializing biotech should look like when the product base is still small relative to future ambition: cash consumption narrows, product sales inflect, but earnings remain negative because the company is buying time and market access.

The balance sheet is much stronger than the income statement. Cash and financial assets rose to RMB4.56 billion at the end of 2025 from RMB3.08 billion in 2024, helped by the June 2025 placement that raised net proceeds of about HK$1.943 billion. Net cash used in operating activities narrowed to RMB180.3 million in 2025 from RMB429.8 million in 2024, and capital expenditure was only RMB126.3 million, mainly for R&D equipment. The company disclosed no borrowings. On a simple 2025 operating-cash-burn-plus-capex basis, cash and financial assets represented well over ten years of runway. That figure should not be read literally because spending can increase as commercialization scales, but it does answer the important question: financing is not the central investment risk today. Execution is.

Business model moat industry and cycle

Kelun-Biotech’s business model works through three engines. The first is self-commercialization in Greater China for approved products, with sac-TMT now the dominant economic driver. The second is upfronts, milestones and royalties from outbound partnerships, especially MSD. The third is internal platform option value: programs that are not yet material to earnings but matter to valuation because the market wants proof that sac-TMT is the start of a slate rather than the end of one. Revenue structure still reflects the second engine more than the first, but the direction of travel is clear as product sales rise.

The commercialization build in China is more advanced than many investors outside the sector realize. By first half 2025, commercial sales had reached RMB309.8 million, with sac-TMT contributing 97.6%. The company said its business had reached 30 provinces, more than 300 prefectures and more than 2,000 hospitals, with over 1,000 hospitals generating sales. It had relationships with more than 60 tier-one distributors and more than 400 DTP pharmacies, and sac-TMT had been included in 29 provincial networks by that point. That does not prove enduring pricing power. It does prove that Kelun-Biotech is not trying to launch an oncology brand from scratch with a paper sales force.

The moat is real, but it is narrower than the share price sometimes implies. The strongest moat source is platform know-how in ADC design and development. The second is execution credibility with regulators and partners, which is why MSD kept deepening the relationship rather than treating sac-TMT as a one-asset bet. The third is increasingly integrated capability: discovery, translational medicine, process development, manufacturing, clinical operations and commercialization inside one group. What is not a moat is brand in the consumer sense; oncology drug adoption depends on efficacy, reimbursement, label position, physician confidence and hospital access, not on retail-style brand affection. Switch costs also remain clinical rather than contractual. If a rival TROP2 ADC proves clearly superior in a given line of therapy, physicians will switch.

The industry backdrop is supportive but crowded. ADCs remain one of the most important oncology modalities because they can widen the therapeutic window compared with untargeted chemotherapy, but the profit pool accrues very unevenly. A small number of molecules capture most of the value. Kelun-Biotech’s opportunity lies in the fact that TROP2 is one of the most active solid-tumor targets, and sac-TMT already has a rare position as the first TROP2 ADC globally approved for lung cancer. The danger is the same thing: TROP2 is too attractive a target to stay under-contested. Gilead’s Trodelvy is already established in breast cancer, and AstraZeneca/Daiichi’s Datroway has now gained U.S. approvals in EGFR-mutated NSCLC and metastatic TNBC. This is not a field where incumbency guarantees longevity.

Policy and regulation matter here in two different ways. China oncology pricing and reimbursement affect near-term commercial monetization, while drug-approval and review pathways affect how quickly Kelun can turn data into labels. Sac-TMT’s first two approved indications were included in China’s NRDL by February 2026 according to the company, which helps volume expansion. The first-line PD-L1-positive NSCLC sNDA was accepted for review and entered priority review in May 2026, showing that regulatory speed can materially change the revenue curve for a successful asset. Outside China, Kelun’s dependence is not on its own regulatory apparatus but on MSD’s execution.

Management and governance sit in the middle. Chairman Liu Gexin is the Kelun founder figure; the CEO role is effectively carried by Dr. Ge Junyou, whose background spans innovative-drug R&D, manufacturing and management. That mix suits the company’s current stage. The governance discount is not about competence. It is about control. Kelun-Biotech is a holding subsidiary of Kelun Pharmaceutical, related-party commercial arrangements exist, and the broader control structure still links the listed biotech to the parent’s ecosystem. That can be efficient. It also means minority investors should not value the business as though it were a fully independent founder-led U.S. biotech.

Horizontal competitor analysis

At the product level, Kelun-Biotech has direct comparators. At the corporate level, it does not. That is the core complication in horizontal analysis. Trodelvy belongs to Gilead, and Datroway belongs to AstraZeneca and Daiichi Sankyo. Those are large diversified groups whose corporate multiples say almost nothing about the standalone value of their TROP2 programs. So the right comparison is competitive position, not headline P/E.

Trodelvy became the proof that TROP2 ADCs could be a real commercial class in solid tumors. Its strength is commercial establishment, physician familiarity and guideline position in metastatic breast cancer. Its weakness, from Kelun-Biotech’s perspective, is that its NSCLC expansion has been less convincing: Gilead said the Phase III EVOKE-01 study in previously treated metastatic NSCLC missed its primary OS endpoint in 2024. Trodelvy has also moved forward in first-line metastatic TNBC, including label expansion in the U.S. and Europe, but the lung-cancer narrative around it weakened. That matters because lung cancer is the indication where sac-TMT is trying to build its most differentiated identity.

Datroway sits closer to sac-TMT in the market’s imagination because it is another next-generation TROP2 ADC trying to expand beyond breast cancer. Its recent regulatory path has been mixed but strategically important: the FDA granted accelerated approval in June 2025 for previously treated EGFR-mutated NSCLC, and in May 2026 approved Datroway for metastatic TNBC in patients not eligible for PD-1/PD-L1 inhibitor therapy. That means Kelun is not racing against an unapproved future rival; it is racing against a moving competitor that is winning labels now. Datroway’s weakness is that the European NSCLC filing had previously been withdrawn after feedback from regulators, showing that the path is not linear. Still, Kelun investors should treat Datroway as the most relevant external benchmark for how quickly a TROP2 ADC can compound label value if data stay good.

Sac-TMT’s position against those two rivals is more favorable in China than it is globally. In China, Kelun controls commercialization, knows the hospital-access system, and has already secured four approved indications. It also has the first TROP2 ADC lung-cancer approval globally, which gives the molecule a genuinely differentiated clinical identity rather than a pure copycat breast-cancer profile. The company’s own data package in EGFR-mutant NSCLC is strong: the annual report cites ORR of 60.6% versus 43.1%, PFS of 8.3 versus 4.3 months, and a preplanned interim OS result of not reached versus 17.4 months in the Phase III study that supported labeling progress, with publication in the New England Journal of Medicine. That is a better anchor than vague platform claims.

The most important horizontal comparison, though, is not one drug versus another. It is a question of who owns the value chain. Kelun-Biotech kept Greater China rights to sac-TMT and gave ex-China rights to MSD. That produces a very specific economic profile. Kelun gets full strategic leverage in China but only an indirect economics stream abroad. Gilead and AstraZeneca/Daiichi own their global economics more directly through their own corporate structures. The trade-off is obvious. Kelun gave up some upside to reduce execution risk and to accelerate global development using MSD’s scale. For a Chinese biotech, that was rational capital allocation. For an equity investor, it means ex-China success is worth a lot, but not as much as if Kelun had kept global rights.

Kelun’s broader Chinese competitor set also matters because investors in Hong Kong use local innovative-drug names as valuation references whether the products are directly comparable or not. RemeGen, Mabwell and Harbour BioMed sit in the wider ADC and innovative-biologics conversation; parent Kelun Pharmaceutical matters because it remains the strategic and control anchor; and MSD matters because it is effectively the global commercial arm for the lead asset. Kelun-Biotech’s niche is therefore not “China biotech” in the generic sense. It is “China biotech with a validated ADC platform, commercial rights in its home market, and a multinational partner carrying global scale risk.” Few peers match that exact mix.

Current fundamentals valuation and risk

The most recent public operating picture is strong enough to justify investor interest and not strong enough to justify complacency. In first half 2025, revenue reached RMB950.4 million, total commercial sales were RMB309.8 million, and sac-TMT accounted for 97.6% of that commercial revenue. Management was already building the full launch infrastructure by then. Full-year 2025 showed the next step: product-sales revenue rose to RMB542.7 million, but the company still lost RMB382.0 million because commercialization spend and R&D remained high. This is a real business ramp, not a one-quarter spike. It is also a ramp still funded by a large base of licensing and collaboration economics.

What the market is trading right now is not 2025 earnings. It is the conversion of clinical breadth into earlier-line revenue. The sharpest example is OptiTROP-Lung05. Kelun announced in January 2026 that sac-TMT plus pembrolizumab had received breakthrough therapy designation in China for first-line PD-L1-positive NSCLC after Phase III data showed a statistically significant and clinically meaningful PFS benefit with a positive OS trend. In May 2026 the company said the NMPA accepted the sNDA and put it into priority review. Around the same period, the company announced that its Phase III first-line TNBC study had met the PFS primary endpoint. Those are exactly the kind of step-ups that move an asset from later-line salvage positioning toward franchise economics.

The clinical readout itself was strong. Public summaries around ASCO 2026 reported that OptiTROP-Lung05 reduced the risk of disease progression or death by 65% versus pembrolizumab monotherapy, with ORR of 70.2% versus 42.0%. A positive OS trend was observed, with median OS not reached versus 14.5 months and a 12-month OS rate of 80.4% versus 68.9%, while grade 3 or higher treatment-emergent adverse events were higher in the combination arm. The regulatory implication is straightforward: the dataset was strong enough to support a China sNDA and priority review. The investment implication is more subtle: first-line PD-L1-positive NSCLC is large enough that a label win changes the China commercial model, but it also raises the standard of proof investors will demand from subsequent first-line studies.

The gynecologic update from the 2026 SGO meeting is supportive but not yet central to valuation. Kelun said data from SKB264-II-06/MK-2870-002 showed promising and durable antitumor activity with manageable safety in pretreated recurrent or metastatic cervical cancer using sac-TMT plus pembrolizumab, and positive efficacy signals with favorable safety for maintenance use in platinum-sensitive recurrent ovarian cancer. Those data improve the breadth case for sac-TMT, but management had not disclosed a China gynecologic NDA by the base date. The bigger near-term gynecologic value still sits ex-China, where MSD’s Phase III program includes endometrial, cervical and ovarian studies. Reuters separately reported in May 2026 that MSD’s late-stage endometrial-cancer trial met its primary endpoints of OS and PFS, which matters for the future royalty stream even though it does not immediately add China revenue to Kelun.

The owner-earnings check points to the same conclusion the business narrative does. Kelun is not a company you value on near-term accounting earnings. In 2025, net cash used in operating activities was RMB180.3 million against a net loss of RMB382.0 million, because milestone and other operating cash inflows were meaningful. Capital expenditure was RMB126.3 million, mainly for R&D equipment. I therefore treat only a minority of capex as maintenance and the majority as growth capex, which means owner-earnings screens based on current profit are not useful. The business is still an investment phase business, but it is no longer a financing-risk business. That is precisely why rNPV and SOTP are the right valuation tools here.

The most fragile assumption in the stock is ex-China peak sales. Kelun’s disclosures prove the scale of MSD’s commitment, but they do not guarantee commercial dominance. For the valuation below, I use three explicit assumptions. First, for sac-TMT outside Greater China, I model global peak sales of roughly US$5 billion in the conservative case, US$8 billion in the base case and US$11 billion in the optimistic case, with modeled royalty capture centered around 8.5% in the base case inside the disclosed mid-single-digit to low-double-digit range. Second, for sac-TMT in Greater China, I model peak sales of about RMB6.5 billion, RMB9.5 billion and RMB13.0 billion in the three cases, reflecting current labels plus differing conversion rates for first-line NSCLC and first-line TNBC. Third, I use probability-of-success ranges of 90% for approved labels, 75%–85% for late-stage sNDA/NDA assets, around 60%–70% for first-line TNBC expansion and 35%–50% for earlier gynecologic and other still-clinical programs, discounted at roughly 10.5% for ex-China royalty streams and 11.5%–12.5% for China commercial assets. These are research assumptions, not reported company guidance. They are what make the current price look respectable rather than compelling.

Valuation scenario analysis

The business reason behind these numbers is simple. Kelun-Biotech is already worth a great deal because investors are granting real value to an asset that has de-risked clinically and commercially. To beat the current price by a large margin, Kelun now needs not one success but a chain of them: first-line China expansion, sustained China hospital access, and enough global approvals from MSD to turn milestone language into royalty math. That is why the upside still exists and the margin of safety does not.

Margin-of-safety recheck

At HK$419, the stock trades above my conservative intrinsic-value range of HK$325–350, so the margin of safety against the conservative case is zero.

The most fragile assumption is ex-China peak sales under MSD. If the base-case ex-China royalty and milestone stream is cut to 70% of my model, the base-case SOTP falls from HK$455–485 to roughly HK$395–425 per share in my framework. That is the clearest sign that the stock is sensitive to global expectations rather than just China execution.

If the business merely stays flat operationally over the next three years, with no substantial additional label expansion and no royalty inflection, the expected annualized return from HK$419 would likely undershoot what a growth investor should require from a biotech risk asset. On that basis, this is a good company but not a wide-margin buy price. The margin-of-safety sufficiency verdict is: none.

Tracking dashboard

These are the variables that will actually move the equity. Revenue beats matter, but only if they answer a structural question: is sac-TMT becoming a franchise or just adding labels? Likewise, global conference data matter only if they move regulatory odds or future royalty intensity.

Cross-synthesis summary

Looking vertically across Kelun-Biotech’s history, the capability the company has genuinely proven is not generic “innovation.” It is the ability to turn ADC platform work into assets that survive real-world filters: partnering, pivotal studies, approvals, manufacturing, and launch. Plenty of biotech companies can produce a compelling Phase I poster. Much fewer can produce a lead asset important enough for MSD to take global rights outside Greater China and then expand into a 17-study global Phase III campaign while the originator simultaneously builds a China commercial organization. That is the part of Kelun-Biotech’s history that deserves a valuation premium.

What drove past success was a mix of platform competence and institutional advantage. The platform competence is visible in sac-TMT’s breadth and in the fast accumulation of additional ADC and novel-DC candidates. The institutional advantage came from being born inside the Kelun ecosystem, which meant access to manufacturing, parent support, distribution knowledge and capital-market credibility. Luck helped, as it always does in oncology. But the sequence is too consistent to explain away as luck: Merck partnership, repeated data readouts, four China approvals for sac-TMT, a successful follow-on offering, and removal of the “B” marker. That is not random variance.

Horizontally, Kelun-Biotech’s real advantage is not that sac-TMT has no competition. It is that the company has found a valuable middle ground between independence and scale. In China it kept control, which lets it capture the full economics of current launches. Outside China it traded away control for the execution power of MSD, which sharply raises the probability that global development breadth becomes real commercial presence. Against Gilead and AstraZeneca/Daiichi, Kelun’s weakness is obvious: it is smaller, narrower and more concentrated. Against most Hong Kong biotech peers, its strength is equally obvious: it has already crossed the product, partner and launch hurdles that many peers still talk about in the future tense.

That leads to the valuation judgment. The current share price is rewarding a lot of future success, but not all of it. I do not think Kelun-Biotech is in a valuation bubble in the simplistic sense. The asset base is too real for that. I also do not think the stock offers a genuine margin of safety at HK$419. The present price is already paying for China first-line expansion to matter and for MSD’s global program to produce enough approvals to make royalties economically large. The market may still be underestimating how large the ex-China royalty pool could become if sac-TMT wins across multiple tumor types. It is probably underestimating less than bulls think, and more than bears think.

The most likely market misjudgment today is one of shape rather than direction. Some investors treat Kelun-Biotech like a binary event stock around each data release. That was more accurate in 2023. It is less accurate now. The company is becoming a long-duration franchise-development story where value creation comes from stacking approvals, broadening usage, and turning platform credibility into more than one monetizable asset. That lowers existential risk. It does not remove valuation risk.

Bull and bear reasons

Core bull reasons

• Sac-TMT has already moved from lead asset to multi-label China franchise, with four marketed indications by February 2026 and reimbursement support on the first two labels.
• MSD’s ex-China commitment is unusually deep for an originator this size, with 17 ongoing global Phase III sac-TMT studies disclosed in March 2026.
• The Greater China commercial build is real: first-half 2025 sales were RMB309.8 million, sac-TMT represented 97.6% of that, and hospital/distribution coverage was already broad.
• The balance sheet is strong enough that equity dilution is no longer the near-term survival issue; 2025 year-end cash and financial assets were RMB4.56 billion with no borrowings disclosed.
• The platform is producing additional option value beyond sac-TMT, including A166 on market, A400 at NDA stage, SKB378/WIN378 with Windward, and SKB105 with Crescent.

Core bear reasons

• Economic concentration remains extreme: the commercial ramp and most of the valuation still anchor on one molecule, sac-TMT.
• The company remains loss-making because commercial and R&D intensity are high; 2025 net loss widened to RMB382.0 million even as product sales rose.
• Direct product competition is intensifying as Trodelvy and Datroway extend labels in breast cancer and, in Datroway’s case, EGFR-mutated NSCLC.
• Ex-China upside is valuable but indirect; Kelun gets royalties and milestones, not the full economics of a self-owned global franchise.
• At the current price, the stock already trades above my conservative value range, so downside from expectation misses remains meaningful even if the business itself stays solid.

Pre-mortem

A plausible three-year loss script is not “clinical risk in general.” It is this: by 2027, China approves first-line PD-L1-positive NSCLC, but real-world uptake is slower than expected because physicians sequence immunotherapy and ADC use more conservatively, safety management weighs on earlier-line adoption, and rival TROP2 options strengthen in breast and lung cancer. Sac-TMT China peak-sales expectations fall from something like RMB9.5 billion to RMB6–7 billion in investors’ models, while the stock’s valuation multiple compresses as the market stops treating Kelun as a uniquely open-ended winner. A 30%–40% drawdown would not be hard to imagine in that setup.

A harsher script runs through the ex-China leg. Suppose MSD’s broad Phase III portfolio produces fewer clean commercial wins than investors now assume. Perhaps endometrial sees competitive crowding, some lung settings prove narrower than hoped, and breast-cancer outcomes are good but not class-defining against established or newly approved TROP2 rivals. Then the market would cut not only future royalty estimates but also confidence in Kelun’s platform premium. In that case the stock could plausibly lose 50% from a high-expectation starting point without a single catastrophic failure in the core China business.

Final research conclusion

Kelun-Biotech has become one of the more credible Hong Kong biotech success stories because it has done the hard part: it translated platform work into a marketed franchise and into a global partnership that still appears to be deepening rather than narrowing. That deserves respect. The company has also reached the stage where the next leg of value creation is harder. It now has to prove that sac-TMT can become an earlier-line standard in China, that the first commercialization wave can scale without destroying economics, and that MSD’s huge ex-China development map becomes real royalties rather than just clinical ambition.

At HK$419, I think the stock is worth owning for investors who already own it and understand the path-dependency of oncology value creation. I do not think it offers enough margin of safety for fresh buying on a valuation-disciplined basis. The biggest reason is not that the science is weak. The reason is that the current price already assumes a substantial amount of future clinical, regulatory and commercial success. What would change my mind? A materially lower entry point, or a combination of China first-line NSCLC approval plus commercial evidence showing sac-TMT can convert expanded labels into faster-than-expected product sales without a proportional explosion in launch spending.

【Company-profile scores】

• Fundamental quality: high
• Growth: high
• Moat: medium
• Financial soundness: strong
• Management credibility: medium
• Valuation attractiveness: low
• Risk level: high
• Suitable investor type: long-term growth

【Investment rating】

• Rating: Hold
• One-line thesis: A real ADC franchise is forming, but HK$419 already prices in much of the sac-TMT China-plus-MSD global success path.
• 【Ideal Buy Price】260–280 HKD Basis: at least a 20% margin of safety below my conservative rNPV/SOTP value range of HK$325–350 per share.
• Acceptable hold price: 390–560 HKD
• Clearly overvalued price: 660–705 HKD
• Current-price classification: acceptable hold
• Whether to wait for a better price: yes; a fresh position makes more sense below HK$280, or after first-line PD-L1-positive NSCLC approval if the post-approval commercial trajectory materially outperforms current expectations.
• Target holding horizon: 3–5 years
• Expected annualized return: conservative about -8% to -5%; base about +3% to +5%; optimistic about +13% to +16%
• Max-loss risk: roughly 50% in a scenario where China earlier-line commercialization disappoints and ex-China MSD economics are de-rated at the same time
• Reassessment-trigger signals:
  • if the first-line PD-L1-positive NSCLC sNDA is materially delayed, narrowed, or rejected in China
  • if product-sales growth stalls for two reporting periods after a major new label
  • if MSD visibly prunes the sac-TMT Phase III map without offsetting approvals
  • if grade 3 or higher toxicity in earlier-line settings materially changes physician adoption
  • if non-sac-TMT pipeline value remains unconverted while the stock continues to price a broad platform premium

【Valuation Range】

• current: 419.0 (close as of 2026-06-25)
• bear (conservative · ideal buy zone): [260, 280]
• base (fair · acceptable hold zone): [390, 560]
• bull (optimistic · above the clearly-overvalued line): [660, 705]

Research uncertainties

The biggest uncertainty in this report is not the current sac-TMT label status; that is comparatively clear. The uncertainty is the shape of future ex-China economics. Merck’s disclosures provide milestone pools and royalty bands, but not the exact internal commercialization assumptions that will determine realized value.

A second uncertainty is that Hong Kong disclosure cadence is semiannual rather than quarterly, so “last four quarters” analysis has to be approximated through 1H25 and FY2025 public disclosures rather than true rolling quarterly reporting.

A third uncertainty is corporate comparability. Direct product rivals sit inside very large diversified companies, which makes corporate multiple comparisons less meaningful than product and pipeline comparisons.

Sources

Primary weight in this report was given to Kelun-Biotech’s HKEX annual-results announcement for 2025, HKEX corporate announcements, the 2023 prospectus, Merck’s SEC filing that disclosed sac-TMT deal economics, official Kelun-Biotech press releases and company pages, FDA approval notices, and official or primary company disclosures from Gilead, AstraZeneca and Daiichi Sankyo.

Other tickers mentioned

• MRK.US: global ex-China partner for sac-TMT and the main driver of Kelun’s future milestone and royalty stream
• GILD.US: owner of Trodelvy, the most established TROP2-ADC benchmark in breast cancer
• AZN.US: co-developer and co-commercializer of Datroway, a key competing TROP2-ADC franchise
• 4568.TSE: Daiichi Sankyo, AstraZeneca’s partner on Datroway and a major ADC innovator
• 002422.SHE: Kelun Pharmaceutical, Kelun-Biotech’s parent and controlling-shareholder anchor
• 02142.HK: Harbour BioMed, Kelun partner on SKB378/WIN378
• 09995.HK: RemeGen, part of the broader China innovative-biologics and ADC comparison set
• 688062.SHG: Mabwell, a China ADC peer discussed in the context of the domestic ADC race

This report is based on public information and does not constitute investment advice. Markets carry risk; invest with caution.