The current situation of the company
On June 21, 2022, the company announced that its core product OT-401 fluororelaxation vitreous implant (YUTIQ, you Shiying) has been approved for the treatment of chronic non-infective uveitis (chronic NIU-PS,non-infectious posterior uveitis) involving the posterior segment of the eye.
Comment
According to the company announcement, OT-401 (YUTIQ) is the first and only uveitis treatment approved by the US Food and Drug Administration (FDA) to release fluoride for up to 36 months. This product, introduced to EyePoint by the company in China, is an injectable, sustained-release micro-vitreous steroid implant. Its clinical studies have shown that it can significantly reduce the recurrence rate and disease burden of chronic NIU-PS patients, improve vision, and have good safety. According to the company announcement, the inflammatory attack of NIU-PS will cause irreversible damage to the intraocular tissue of patients and is the second leading cause of blindness in China, with an average age of 33 years old. Frost& Sullivan predicts that the number of chronic NIU-PS patients in China will reach 1.6 million by 2025. We believe that with the approval of OT-401 sales, the company's commercial products are expected to open a new chapter.
The company continues to expand product lines and reach strategic cooperation with Huizhi China in drug promotion. As of June 2022, the company has more than 20 ophthalmic drugs and has established a comprehensive ophthalmic drug pipeline, of which 6 drug candidates are in clinical III phase. According to the disclosure of the company, 1) the company reached a strategic cooperation with Huizhi China in drug promotion, and obtained the exclusive promotion rights of Serida (latanoprost eye drops), Seliga (latanthiomol eye drops) and Exepine (azelastine hydrochloride eye drops) in Chinese mainland area hospitals; 2) OT-1001 (0.24% cetirizine hydrochloride eye drops) phase III clinical trial reached the main end point. 3) OT-703 (ILUVIEN) was approved for phase III clinical trial.
Pipeline expansion is conducive to channel expansion. The company announced that as of December 2021, the company covered 1024 hospital terminals, of which 59 were third-tier hospitals. We believe that the cooperation and promotion between the company and Huizhi China will help the company to rapidly expand the admission channels of public hospitals and tertiary hospitals in the future. In addition, the company announced that the Suzhou Xiaxiang factory began trial production. According to the company announcement, the maximum capacity of the plant is expected to reach 455 million doses per year, we expect to ensure the follow-up production capacity of the company.
Profit forecast and valuation
Taking into account the repeated effects of the epidemic, we downgrade the 2022 Universe revenue forecast of 24.1% to 130 million yuan / 350 million yuan in 2023, but we maintain a net loss of-180 million yuan /-135 million yuan in 2023, taking into account that the company will benefit from increased economies of scale and lower expense rates in the future. We maintain our outperform industry rating and maintain our target price based on DCF valuation of HK $16.60, which is 40.7% upside from the current share price.
Risk
The launch of new products is not as expected; the profitability of drug candidates is not as expected.