ASH 2020 Abstracts Bring No Major Surprises for GenScript, Reaffirm FVE of HKD 20.50

On Nov. 4, the abstracts for the 62nd American Society of Hematology’s, or ASH, Annual Meeting and Exposition were released a day earlier than expected. This included a number of abstracts in BCMA-targeting therapies for multiple myeloma, including cilta-cel (or JNJ-4528). This is the flagship pipeline drug of no-moat GenScript’s cell therapy subsidiary, Legend Biotech (not covered), and is co-developed with Johnson & Johnson’s subsidiary Janssen. We reviewed the abstracts and conclude that the new data reaffirms cilta-cel’s likely position as best-in-class among BCMA-targeting Car-T therapies. Although this does not change our forecast for cilta-cel, it removes the risk of a surprise development, given that ASH’s Annual Meeting is one of the most significant events of the year for new data on Car-T therapies. Our fair value estimate remains at HKD 20.50 per share, and since the market price is a 42% discount to our valuation, we view the stock as very cheap.