Incident: Recently, Corning Jerry Pharmaceuticals announced its 2022 full-year results report. During the reporting period, the company achieved revenue of 167 million yuan, an increase of 14% over 146 million yuan in the same period last year. Among them, the company's R&D expenditure reached 468 million yuan, which is basically stable from 481 million yuan last year. Total overall loss during the year was $326 million, a 21% decrease from the loss of 412 million yuan in the same period last year.
Comment:
Listed products drive revenue growth, and the commercialization process continues to advance. The company's first commercial product, KN035 envolizumab (subcutaneous PD-L1 monoclonal antibody), was launched in 2021. During the reporting period, the company received 82 million yuan in sales revenue and 62 million yuan in privileged royalties. Furthermore, the positive response of envolizumab did not meet clinical needs, and 5 CSCO guidelines were included in the 2022 CSCO guidelines by the end of the reporting period. The successful commercialization of envolizumab has accumulated experience for the company, leading the company's business into a new stage of development+commercialization.
Focusing on differentiated layout, product development is progressing smoothly. Significant progress was made in the company's core products during the reporting period: (1) During the reporting period, the company's core product targeting PD-L1/CTLA-4 anti-KN046 combined chemotherapy to treat non-small cell lung cancer stage III clinical trials reached the end point, and was also approved to treat non-small cell lung cancer phase II clinical IND with acitinib. A multi-center trial of KN046 combined with chemotherapy for pancreatic ductal adenocarcinoma completed the enrollment of 90% of patients. KN046 is expected to submit an NDA application in 2023. (2) KN026 targeted to treat gastric phase II/III clinical approval and the first patient administration was completed. The phase II trial to treat solid tumors completed patient enrollment, the breast cancer phase II treatment trial progressed and positive results were announced at the 2022 SABCS conference. The joint KN046 clinical trial to treat gastric cancer phase III was approved by the IND. It is expected that KN026 will submit an NDA application in 2025.
(3) The HER2 dual-epitope ADC JSKN003 was approved for the treatment of solid tumors phase I clinical IND in China. Phase I trials for solid tumors are being carried out in Australia and the administration of the first patient has been completed. The company's product pipeline is progressing smoothly, and the technology platform empowers a differentiated layout, which is expected to bring about new commercial growth points.
Improve the layout of production facilities and lay the foundation for product release. During the reporting period, the company completed the construction of a pilot and formulation workshop, and completed the expansion of a production base with a production capacity of 6,000L. The total production capacity of the site is expected to exceed 40,000 liters in the future. The construction of production facilities meets the company's growing R&D, clinical, production, operation and product commercialization needs, laying the foundation for the company's long-term growth.
Profit forecast: The company's business conditions are good, and the core pipeline is advancing at an accelerated pace. The company is expected to achieve revenue of 530/855/ 1,220 million yuan in 2023-2025, with earnings per share of -0.49/-0.41/-0.06 yuan/share, maintaining the “increase in holdings” investment rating.
Risk warning: Competition increases risk, and performance predictions and valuation judgments fall short of expectations