JMP Securities initiated coverage on BeiGene Ltd (NASDAQ:BGNE), noting the Chinese biotech firm as a ‘unique investment opportunity.’
The company’s flagship drug, Brukinsa (zanubrutinib), is among the more recent BTK inhibitors to break into a global market projected to hit $12.2 billion by 2031. Three major players dominate this sector, with Johnson & Johnson‘s (NYSE:JNJ) Imbruvica leading the charge, peaking at $8.7 billion in sales in 2021.
However, competition intensified when AstraZeneca Plc‘s (NASDAQ:AZN) Calquence and Brukinsa entered the market in 2017 and 2019, respectively.
Analyst Reni Benjamin’s confidence in Brukinsa emerging as a market leader is bolstered by an exclusive survey of 37 doctors, indicating that 80% plan to boost their use of Brukinsa due to its perceived safety and long-term effectiveness advantages.
As Imbruvica’s popularity declines, Calquence and Brukinsa will capture a larger market share. By 2031, Brukinsa is expected to command 55% of the market, potentially generating global sales of $5.4 billion, the analyst adds.
Benjamin says Brukinsa is on track to generate over $2 billion for the company in 2024, with total revenues to reach $3.7 billion.
The analyst has initiated the coverage with a Market Perform rating and a price target of $288.
China ranks as the third-largest healthcare market globally, behind the U.S. and the EU, with expenditures reaching $1.2 trillion.
BeiGene, which offers 14 products in China through various U.S. partners, holds a significant position in this market. Despite limited visibility into China’s regulatory and commercial environment, BeiGene’s sales force has driven annual revenues from China to $1.1 billion.
However, JMP writes that the numbers can drop to $178 million by 2031 due to patent expirations unless additional therapeutics are licensed.
Price Action: BGNE stock is up 1.05% at $199.59 at last check Wednesday.
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