Lepu Biopharma (SEHK:2157): Valuation Check After New GLP-1 CDMO Framework Deal With Lepu Medical

Lepu Biopharma (SEHK:2157) just signed a GLP-1 focused CDMO framework deal with related party Lepu Medical, a move that could turn spare manufacturing capacity into recurring cashflow and reshape how investors think about its pipeline driven story.

See our latest analysis for Lepu Biopharma.

The 1 day share price return of 3.0% to HK$5.76 comes after a volatile few months, with the 3 month share price return still down sharply. However, the year to date share price return and 1 year total shareholder return suggest momentum may be turning back in Lepu Biopharma's favor.

If this CDMO pivot has you thinking about where else new revenue streams could surprise the market, it is worth exploring healthcare names screened via healthcare stocks.

With shares still trading at a steep discount to analyst targets despite a rebounding track record and new GLP-1 CDMO cashflows emerging, is Lepu Biopharma a mispriced growth story, or is the market already discounting its future upside?

Price-to-Sales of 13.5x: Is it justified?

Lepu Biopharma last closed at HK$5.76, and on a price-to-sales ratio of 13.5x it screens as expensive versus both its fair ratio and the wider biotech space.

The price-to-sales multiple compares the company’s market value with its annual revenue, a common yardstick for high growth, loss making biopharma names where earnings are still negative.

For Lepu Biopharma, the current 13.5x sales multiple sits below the 26.4x peer average, which hints that investors are not paying the same premium as they do for comparable Hong Kong biotechs. However, it still exceeds both the Hong Kong Biotechs industry average of 13.2x and the estimated fair price-to-sales ratio of 10.3x. This suggests the market is already pricing in substantial revenue growth and pipeline progress and that the multiple could compress toward that fair level if execution disappoints.

Explore the SWS fair ratio for Lepu Biopharma

Result: Price-to-Sales of 13.5x (OVERVALUED)

However, risks remain, including ongoing net losses and potential clinical or regulatory setbacks that could undermine both GLP-1 CDMO ambitions and oncology pipeline expectations.

Find out about the key risks to this Lepu Biopharma narrative.

Build Your Own Lepu Biopharma Narrative

If you see the numbers differently, or simply prefer digging into the details yourself, you can build a custom view in minutes. Do it your way.

A great starting point for your Lepu Biopharma research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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