Gan & Lee Pharmaceuticals' third-quarter results miss expectations: Overseas licensing revenue delayed, while innovative drug progress supports growth outlook
Original source：Goldman SachsFirst published on Unhidea：Original source date：
Key takeaway
Goldman Sachs believes Gan & Lee Pharmaceuticals' domestic business remains stable and that overseas expansion and its innovative drug pipeline offer room for growth, but the timing of licensing revenue recognition and R&D spending affect near-term earnings.
Why did third-quarter growth still fall short of expectations?
Gan & Lee Pharmaceuticals reported third-quarter 2026 revenue of 1.15 billion yuan, up 16.9% year on year. Goldman Sachs said delayed recognition of business development and licensing revenue caused the quarter's results to fall short of expectations.
The company received an upfront payment of 62 million euros in October under its European licensing agreement for bofanglutide. Goldman Sachs believes the payment could significantly boost fourth-quarter earnings if the conditions for revenue recognition are met.
What has overseas expansion contributed to the existing business?
In the first three quarters of 2026, domestic revenue was 2.8 billion yuan, up 4.0% year on year, mainly supported by growth in insulin sales volume. International revenue rose a much faster 60.4% to 572 million yuan.
Overseas product sales rose 34.4% year on year over the same period, partly due to continued shipments under Brazil's PDP project. The company also expanded into markets in Latin America, India, South Korea and Europe through product registrations and licensing partnerships.
How far have the two innovative drug candidates progressed?
Bofanglutide, a GLP-1 receptor agonist administered once every two weeks, achieved maximum weight loss of 18.5% at 52 weeks in a pivotal Phase III obesity trial. Its new drug application was accepted by China's National Medical Products Administration in September 2026.
Once-weekly insulin ludefen achieved greater reductions in glycated hemoglobin than once-daily basal insulin in three Phase III trials. In the SUPER-8 trial, its efficacy was non-inferior to that of once-weekly insulin icodec, and it required no initial loading dose. Goldman Sachs believes clinical progress in both candidates has reduced R&D risk and created growth opportunities beyond the existing insulin business.
How has Goldman Sachs adjusted its earnings forecasts and investment view?
Considering the potential increase in R&D expenses, Goldman Sachs maintained its revenue forecasts for 2026–2028 but lowered its net profit forecasts for 2027 and 2028 by 1.5% and 2.9%, respectively, to 1.596 billion yuan and 1.97 billion yuan.
Goldman Sachs maintained its Buy rating and 12-month price target of 78 yuan, citing domestic substitution for imported insulin, exports to Europe and the United States, and expansion in emerging markets. Near-term points of attention include the US FDA's review comments on the company's insulin products and the implementation of the renewed insulin volume-based procurement agreement. Slower-than-expected US launches and sales ramp-up, and slower pipeline development, are the main risks.
