HC-1119 is expected to be the best in class 2L+CRPC indication with limited treatment options. It has differentiated advantages, and it is planned to submit an NDA within the year. The second-generation AR antagonist HC-1119 independently developed by the company based on the deuterium generation technology platform has completed clinical phase III and reached the pre-set end point. It will submit an NDA within this year, and is expected to be approved for marketing in 2023. The commercialization of the first product is imminent. HC-1119 deuterated the enzalutamide molecule. The clinical results obtained showed that the PSA50 response rate of 80mGHC-1119 was 77%, similar to 160 mg of enzalutamide. At the same time, it is safer than enzalutamide, and is expected to be the best product of its kind among second-generation AR antagonists. The first indication for the company's HC-1119 application was first-line abirtrone/chemotherapy to resist prostate cancer (CRPC). The drugs approved for this indication were olapalil and radium-223 (patients with bone metastases), and treatment options were limited; none of the other AR antagonists had a CRPC second-line treatment plan, and the differentiated competitive advantage was remarkable.
It focuses on the field of oncology and metabolism, has a rich layout of major indications, and many products have the best potential in its class. It is expected to receive 3 NDAs in the next three years. HP501, the company's second anti-gout product to be commercialized, is a next-generation URAT1 inhibitor. The URAT1 inhibitors already on the market, such as phenbromalone, have serious liver and kidney toxicity. Currently, large single products such as phenbromalone have received a black frame warning from the FDA and have limited efficacy. HP501 will solve the pain points of poor efficacy and inadequate safety of gout drugs, and is expected to replace febusta and phenbromalone as major anti-gout products. Furthermore, HP518 developed by the company based on leading ProTAC platform technology for mCRPC patients who have failed standard treatment is the first oral PROTAC molecule to enter clinical treatment for prostate cancer in China. Compared with ARV-110 developed by global ProTAC leader Arvinas, HP518 showed stronger drug activity, AR mutation targeting, and lower plasma stability and lower drug interaction, and is expected to be the best in its class.
Profit forecasting and valuation: Use the DCF model to value the company's pipelines. Assuming WACC of 10% and a sustainable growth rate of 2%, considering only risk-adjusted sales revenue of products such as HC1119, HP501, HP558, and HP518, it is estimated that a reasonable valuation is 5.5 billion yuan, plus the value of the company's book cash and management team after the IPO was raised 2.3 billion yuan, corresponding to the company's reasonable valuation of 7.8 billion yuan. In the future, as the commercialization of the company's products continues to advance and the development of multiple pipelines accelerates, the company's value will gradually be unleashed.
Risk warning: risk of product development, listing and sales falling short of expectations; risk of policy uncertainty.