Verastem (VSTM)

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As of November 2nd 2018 CSPC Pharmaceutical Group

Investment thesis
NBP plant visit: The Shijiazhuang NBP plant is at full capacity now for ~HK$5bn in NBP sales (vs.our projected NBP 2018E total revenue of HK$5.1bn). This implies NBP needs new capacity to support future growth. According to the plant manager, the new NBP plant will commence production in 1H2019 and will double NBP capacity to ~HK$10bn in value, i.e. fulfilling next three years’ projected production requirements. Furthermore, NBP shipments and channel inventory remain
healthy, so we expect NBP to continue its solid growth momentum in Q3 2018. Overall, we expect NBP to deliver ~43% YoY top-line growth in 2018E (+42.6% YoY in 1H2018).

Visit to CSPC’s Central Institute of Pharmaceutical Research: We visited CSPC’s Central Institute of Pharmaceutical Research in Shijiazhuang. Following are the key takeaways:

? Innovative - COPIKTRA (licensed from Verastem for leukemia) is under final human race trial.