Panmure and Cavendish reiterate buy on Hutchmed after GSK deal Proactive uses images sourced from Shutterstock
Hutchmed (China) Ltd (AIM:HCM, NASDAQ:HCM, HKG:0013, FRA:H7T2) won ringing endorsements from City brokers on Thursday after securing a blockbuster licensing agreement with GSK PLC (LSE:GSK, NYSE:GSK), exposing what analysts regard as a deep valuation disconnect.
The shares leapt 15% to 205.84p as Cavendish and Panmure Liberum reiterated their respective ‘buy’ ratings, arguing that the market continues to overlook the biotech’s expanding oncology pipeline.
At the heart of the agreement is an exclusive worldwide accord outside Greater China for HMPL-A830, unlocking $110 million upfront and up to $1.185 billion in milestone payments (as estimated by Cavendish).
Panmure Liberum, however, calculates the total potential milestone payments at up to $1.295 billion.
HUTCHMED retains full development and commercial rights across Greater China.
That candidate anchors the drugmaker’s novel antibody-targeted therapy conjugate platform, coupling a selective KRAS inhibitor to an EGFR antibody to tackle stubborn colorectal, lung, and pancreatic tumours.
Under the partnership terms, the biotech will steer global phase I trials starting in the second half of 2026, before GSK assumes responsibility for bankrolling and executing later-stage clinical development across western markets.
The agreement also grants GSK a right of first negotiation on one earlier-stage ATTC candidate.
Panmure Liberum, which set a 400p target price, noted that the upfront windfall pushes full-year revenue close to the upper end of management’s $330 million to $450 million guidance range.
In a parallel endorsement, Cavendish affirmed its 370p target, stressing that GSK’s capital injection provides important external validation for early-stage discovery assets currently receiving negligible equity credit.
The transatlantic tie-up follows a blistering run of clinical successes, including positive phase III readouts from the SAFFRON (mid-August) and SANOVO (early September) lung cancer studies, alongside Chinese regulatory approval for liver therapy ATLED granted last week.
All eyes now turn to an imminent regulatory filing with the US Food and Drug Administration for Orpathys, which positions its commercial partner, AstraZeneca, for an American market launch by mid-2027.