Event: innovative drugs continue to cash in and revenue accelerates. In 2022 Q3, the company achieved revenue of 850 million yuan (yoy+ 33.8%), net profit of 33 million yuan (yoy+ 173.6%), and non-return net profit of 28 million yuan (yoy+166.4%). Q1-3 in 2022, the company achieved revenue of 2.1 billion yuan (yoy + 9.7%), company return net profit of 103 million yuan (yoy-62.5%), deducting non-return net profit of 79 million yuan (+ 608.1%).
The indications of cyclopropofol have been continuously expanded and a breakthrough has been made in internationalization. New indications of ICU sedation and gynecological outpatient surgery sedation were added in July and August of 2022. In September 2022, the US Phase Ⅲ Clinical trial of Hesco Cyclopropofol injection (HSK3486-304) reached the preset primary end point, and about 250 US subjects were enrolled. The incidence of non-inferior, moderate and severe injection pain (NRS score ≥ 4) was significantly reduced (propofol vs propofol, 6.0% vs 61.4%). The company is also actively promoting external licensing of propofol.
Four innovative drugs are expected to be collected in 2024, and a number of molecules will actively promote foreign cooperation. Innovative projects such as cyclopropofol and BTK-Protac actively promote license out, and a number of innovative drugs are in the late clinical stage:
1) long-acting hypoglycemic drug (HSK7653) phase Ⅲ clinical end, 2 Monday, plan to declare by the end of 2022 NDA;2) neuralgia drug (HSK16149) has been submitted to NDA;3) acute and chronic pain drug (HSK21542) to accelerate phase Ⅲ clinical trial; 4) antineoplastic drug HSK29116 accelerates Ⅰ phase climbing test.
TYK2 external authorization milestone reached to maximize the value of innovation. TYK2 (tyrosine kinase 2) mainly mediates immune signaling pathways driven by IL-23, IL-12 and type I interferon, and has the potential to treat autoimmune diseases such as psoriasis, lupus and inflammatory enteritis. October 24, 2022, the company announced that the first subject in the Phase II clinical trial of TYK2 products has taken medication, and the counterparty has recently paid US $37 million for the first milestone. The company holds about 55.84% of the FT Group, a subsidiary, and should be allocated about $20.66 million. The company has recently received the payment, which is expected to increase the company's total profit in 2022 by about $20.66 million.
Profit Forecast and Investment rating: due to the achievement of the TYK2 milestone in 2022 and the continuous cashing of cyclopropofol, we have raised our homing net profit in 2022-2024 from RMB 2.2 billion to RMB 3.5pm, and the current market capitalization corresponding to PE in 2022-2024 is twice as much as that in 73-64-41. As a result of the company: 1) cyclopropofol has great commercial potential and continues to cash in; 2) innovative drugs actively carry out external cooperation to maximize value; 3) the negative position is gradually cleared, innovative products are ready for harvest, and medium-and long-term income and profits are accelerated. Maintain a "buy" rating.
Risk hint: innovative drug delivery is less than expected, drug price reduction risk, with volume procurement risk