JPMorgan: WuXi AppTec — TIDES to Benefit as Peptide Therapeutics Expand
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
JPMorgan maintains Overweight ratings on WuXi AppTec's A-shares and H-shares, with target prices of Rmb142 and HK$142, respectively. The recent FDA approval of icotrokinra, an oral peptide for plaque psoriasis, validates the potential of peptide drugs beyond GLP-1 and Amylin in large indications.
Peptide drug development is rapidly accelerating across cardiovascular and autoimmune diseases. This expansion drives demand for advanced chemical synthesis, macrocyclization, and GMP-scale manufacturing, directly benefiting WuXi AppTec's TIDES platform. Key peptide assets include zilucoplan for myasthenia gravis, elamipretide for Barth syndrome, and enlicitide, which achieved a 56-60% LDL-C reduction in Phase 3 trials and could become the first approved oral PCSSK9 inhibitor.
Oral macrocyclic peptides present significant chemistry, manufacturing, and controls (CMC) challenges, including low yields and complex cyclization. WuXi AppTec's integrated TIDES platform is well-positioned to meet these specialized needs, leveraging capabilities in non-natural amino acids, macrocyclization, and conjugation. Valuation is based on a DCF model, applying a 9.8% WACC for A-shares and 10.3% for H-shares, with a 3.0% terminal growth rate. Downside risks include geopolitical headwinds and product development failures.