Investment logic
Pioneering Pharmaceutical is an innovative drug research and development company focusing on AR targets. It currently has seven clinical drug candidates, of which Puclosamide and Freitain have entered the clinical III phase.
Puclosamide is expected to be approved for the treatment of COVID-19. COVID-19 small molecule oral medicine has the advantages of universal effectiveness, strong convenience, high production capacity and low price for mutants. On April 6, the company released the III top-line data of COVID-19 in the treatment of mild to moderate illness with Puclosamide. On December 27, 2021, the company announced that the mid-term data of the clinic were not significant. In the final data released this time, the hospitalization rate was reduced by 50% among people taking medication for at least one day, and by 100% among those taking medication for more than 7 days (p < 0.02). The hospitalization rate was also reduced by 100% for patients with high-risk mild to moderate disease (p < 0.02), and the viral load of patients was significantly reduced by Puclosamide (p < 0.01). And improve some COVID-19 related symptoms. The company will continue to complete further data analysis and plans to submit listing or EUA applications to the United States, China and other countries based on this clinical practice. We expect that Puclosamide is expected to be listed or approved by EUA for the treatment of mild to moderate COVID-19 patients in domestic and foreign markets. At the same time, the global phase III trial of proclomide in the treatment of severe COVID-19 patients is under way, and the indications are expected to be further expanded in the future. We estimate that the risk-adjusted revenue of Puclosamide from 2022 to 2024 will be 1.63 billion yuan, 2.29 billion yuan and 1.54 billion yuan, and will gradually drop to 600 million yuan in 2030 with the normalization of the COVID-19 epidemic.
Pucloidomide in the treatment of AR positive prostate cancer and Freitaine in the treatment of androgenic alopecia have entered clinical III trials and are expected to be approved for listing around 2023. The total risk-adjusted sales from 2023 to 2025 are 50 million yuan / 140 million yuan / 320 million yuan, and the peak sales are expected to be 1.5 billion yuan in 2030. The company also has ALK-1, PD-L1/TGF- β, mTOR, SMO and other target drug candidates in early clinical research and development.
Profit forecast and valuation
We estimate that the company's revenue from 2022 to 2024 will be 1.34 billion yuan and its net profit will be 4.2 billion yuan and 1.23 billion yuan respectively. We use the DCF valuation method to value the COVID-19 part and the non-COVID-19 part of the company. COVID-19 's part is valued at 4.9 billion yuan, the non-COVID-19 part is valued at 5.1 billion yuan, the comprehensive company is reasonably valued at 9.99 billion yuan, and the corresponding target price is HK $30.95. Cover for the first time, giving the company a "buy" rating.
Risk hint
The progress and data of new drug research and development are lower than the expected risk, and the application and approval of new drug marketing are less than expected risk. Global COVID-19 epidemic change risk, sales less than expected risk, policy regulatory risk and so on.