Main points of investment
Recommendation logic: (1) the posterior line indication of potential BIC variety Dururamide is about to be submitted to NDA. Among the first-line indications in the global multicenter phase III clinical group, the domestic potential sales peak is more than 2.8 billion. (2) PROTAC molecules such as HP518 are expected to solve the problem of drug resistance in prostate cancer. HP518 is the first oral PROTAC molecule to treat drug-resistant prostate cancer in China. (3) PROTAC and deuterium cutting-edge technology platforms support the ability of continuous independent innovation, and 5 PROTAC products and 3 deuterium products are accelerating, which is worth looking forward to.
Doxorubicin posterior line therapy for metastatic castration-resistant prostate cancer (mCRPC) is expected to be submitted to NDA in the first half of 2023. First-line indications are included in the global multicenter Ⅲ phase clinical group. Enzalutamide is a deuterated drug of Enzalutamide. Indications for posterior-line treatment of mCRPC are expected to be submitted to NDA in the first half of 2023 and are expected to be approved for market in the first half of 2024. The first-line global multicenter phase III clinical trial was launched at the beginning of 2022 and is being enrolled in the group. Horizontal comparison of Enzalutamide trial data showed that 80mg was more effective, 80mg was as effective as 160mg, and patients were more compliant; it was safer, and no epilepsy occurred in existing clinical subjects; and the patent for the de Enzalutamide compound was due to expire in 2032 and was valid longer. It is estimated that the peak sales of domestic back-line and first-line indications are 880 million yuan and 2.02 billion yuan respectively, and the DCF valuation is 5.99 billion yuan.
HP518 is the first oral PROTAC molecule to be used in the clinical treatment of drug-resistant prostate cancer in China. HP518 has high degradation activity to wild-type AR and Enzaluamide-resistant mutant AR. It can degrade both wild-type AR and mutant AR, which is expected to solve the problem of drug resistance in prostate cancer. HP518 is currently in phase I Australian clinical trials, and IND was accepted by FDA in December 2022. The company will first develop second / third-line therapy for AR mutations, and then extend to frontline therapy.
PROTAC and deuterated cutting-edge technology platforms support continuous independent innovation, and high quality is accelerated in the research and development pipeline. The company has 10 products in the research pipeline, 9 of which are self-developed new drugs. In addition to deuterated products, HP530 for pancreatic cancer and a variety of solid cancers are applying for IND, and HP515 for NASH is in the preclinical stage. In addition to HP518,HC-X029 and HC-X037, the PROTAC platform is also in the preclinical stage for drug-resistant prostate cancer, and the HC-X035 for KRAS mutated cancer is expected to submit IND,HC-X038 in 2023. In addition, HP501, a potentially safer and more effective anti-hyperuricemia / gout URAT1 inhibitor, is about to enter phase III of the clinical trial.
Profit forecast and investment advice. It is estimated that the operating income of the company from 2022 to 2024 is about 0, 0 and 160 million yuan respectively. Considering the strong R & D strength of Haichuang Pharmaceutical Industry, the outstanding strength of deuterium and PROTAC technology platforms, the application for listing of the first innovative drug de Enluamide is imminent, and the total pipeline valuation and financial asset value estimated by DCF valuation method is about 7.7 billion yuan, corresponding to the target price of 77.7 yuan, giving a "buy" rating for the first time.
Risk hint: the risk that the newly developed product is approved and put into production or is not as expected, the market competition aggravates the risk, the policy risk of the pharmaceutical industry and so on.