ZLAB - A Risky Bet: Zai Lab's Uncertain Future

2024-04-16 17:08:09 ET

Summary

• Zai Lab offers a weaker value proposition for investors looking to bet on Chinese biotech due to its pure license in approach, limiting its potential to tap into global market.
• Its key products have shown a slow-down in 2023 and is facing increased competition.
• There is limited excitement in the current pipeline, as competitors have already taken the lead in the development timeline.
• The company is overvalued because it is trading at a similar P/S ratio to its peers, even though it has weaker quality in several key aspects.

Investment Thesis

I initiate coverage of Zai Lab with a Sell rating due to its slower revenue growth compared to peers, increasing competition for its key products, and a weak drug pipeline....

For further details see: