Performance review
The 2022 results are in line with our expectations
The company released the 2022 annual performance report: revenue of 957.46 million yuan, from revenue from cooperation with authorized products with AbbVie, net loss - 372 million yuan; 2022 results are in line with our expectations.
Development trends
The clinical registration of the KRAS G12C inhibitor Glarese domestically is progressing smoothly. In September 2022, Glairase's phase II critical clinical trial was approved by the Drug Evaluation Center (NMPA) of the China Drug Administration (NMPA). The single drug is used to treat patients with advanced or metastatic non-small cell lung cancer (NSCLC) with KRAS G12C mutations (NSCLC) with a KRAS G12C mutation. The company plans to submit to the NDA 4Q23. Glarese is leading the progress of drugs with the same target in China, and presented competitive efficacy and safety data at the 2022 ASCO conference, and is expected to become the company's first commercialized product. Glarese is also exploring clinical trials for monodrug treatment of pancreatic cancer and treatment of colorectal cancer in combination with cetuximab. The company expects 2H23 to begin registered clinical trials for these two indications in China.
The combined use of JAB-3312, a first-tier SHP2 inhibitor in the world, and Glarese is expected to be conceptually certified in 2023. SHP2 plays a key role in tumor growth and T-cytotoxicity in both the KRAS and PD-1 pathways. It is a popular target for solid tumors, yet no drug in the world has completed conceptual verification. Gacos's second-generation SHP2 inhibitors originated from the company's unique inducible allogeneic drug discovery platform. Preclinical data showed excellent pharmacological properties. The company expects 2H23 to read data on the efficacy of NSCLC in combination with Glarese to treat the KRAS G12C mutation. In addition, the company and AbbVie are also collaborating to promote NSCLC clinical phase II trials where JAB-3312 is used in combination with paborizumab to target PD-1 drug resistance or the development of ositinib in combination with ositinib to further expand market space.
The early innovative clinical pipeline focuses on developing targeted anticancer drugs on difficult drug targets and arranging iADC projects in tumor immunization pathways. The company has laid out a variety of related target drugs that are receiving high global attention. Clinical or pre-clinical research and development of pipeline products such as the BET inhibitor JAB-8263, the KrasMulti inhibitor JAB-23400, and CD73-STING iADCJAB-x1800 is being carried out in an orderly manner, demonstrating the company's independent research and development capabilities.
Profit forecasting and valuation
Due to exchange rate changes and revenue adjustments in cooperation with AbbVie, we lowered our 2023 revenue by -2% to 236 million yuan, and introduced a 24-year revenue forecast of 261 million yuan for the first time. Due to smooth global clinical progress and overseas JAB-3312 related clinical expenses paid by AbbVie, we raised our net profit for 2023 from -505 million yuan to -419 million yuan. For the first time, we introduced a net profit forecast of -426 million yuan for 2024. Using the DCF valuation method, we maintained an outperforming industry rating. Since the company's pipeline is progressing smoothly and Grarese is expected to be commercialized in 24/25, we raised our target price by 65.1% to HK$10.8, which is 33.2% upward from the current stock price.
risks
Regulatory review risks; new product launches, clinical trial data and sales fall short of expectations; increased competition.