Focus Stocks》Taikang Biotech: Bright revenue in October, dual engines working

Taikang Biotechnology (6589) announced that its revenue in October exceeded 270 million yuan, the second highest in history, with a monthly increase of 131% and an annual increase of 287%. The cumulative revenue for the first ten months of this year reached 1.38 billion yuan, an annual increase of 94.7%, a new high in the past three years. Taikang Biotech's stock price opened higher today, hitting the upper limit of 51.5 yuan in early trading. As of 9:32, the stock price was tightly locked at the daily limit, with a trading volume of 645 contracts, and the number of buy orders at the daily limit was about 40.

Tai Kangsheng said that the revenue growth in October mainly came from the continued expansion of CDMO (commissioned development and manufacturing) business, as well as the revenue related to the global and Japanese market licensing cooperation of biosimilar drugs EG12014 and EG1206A, demonstrating the results of the "CDMO + biosimilar" dual-engine strategy.

Liu Lizheng, chairman of Taikang Biotechnology, said: "Taikang's revenue growth does not only rely on a single milestone payment. Based on the relevant contract terms and performance progress, the revenue related to development milestones is recognized on a monthly basis based on the completion ratio, and not all is recorded in a single month. As subsequent product regulatory submissions, listing approvals and commercialization progress, it is expected to continue to bring phased milestone income, and gradually extend to sales profits after listing, forming a multi-year, sustainable revenue source."

EG1206A has submitted a marketing authorization application (MAA) to the European Medicines Agency (EMA) at the end of October this year, and plans to submit a biologics marketing application (BLA) to the US Food and Drug Administration (FDA) before the end of this year, as well as a marketing application to the Canadian competent authority. In the first half of 2027, Taikang Project and its partner Sandoz submitted marketing applications to 26 countries, and completed the submission of marketing applications to the Taiwan Food and Drug Administration (TFDA) of the Ministry of Health and Welfare during the same period. The global market layout continues to accelerate.

In terms of commercialization, EG1206A aims to launch sales in Europe in 2027 and the United States in 2028. The company expects that major licensing milestone revenue will be realized gradually from 2027 to 2028 as regulatory review and approval progresses; after the product is launched, it is also expected to obtain high double-digit proportions of sales profits and sales bonuses according to the contract, allowing the licensing development results to be further transformed into long-term revenue.

In terms of CDMO, Taikang continues to expand international cooperation and one-stop biopharmaceutical development and manufacturing services, and is expected to continue its growth trend from 2027 to 2028. Zhubei Factory No. 2 is preparing for an on-site inspection by the Japan Pharmaceuticals and Medical Devices Agency (PMDA), and aims to start shipping commercial products to Japanese customers in 2027.

Liu Licheng further pointed out that as the revenue from biosimilar drug licensing is gradually realized, the CDMO business continues to expand, and commercial products gradually contribute to revenue, the company expects that the operating scale and profit structure will improve more significantly in the second half of 2027, and gradually move towards an important turning stage in operating results.