Key points of investment
Incident: On May 30, 2023, the company announced that the marketing license application for a new drug for rickizumab injection (trade name is Yilutsu) was approved by the NMPA on May 26, 2023 to treat adult patients with moderate to severe plaque psoriasis suitable for systematic treatment or light therapy, and obtained a drug registration certificate on May 30, 2023.
Eilutran is a humanized LGG1/kappa monoclonal antibody designed to selectively bind to the interleukin-23 (IL-23) subunit and inhibit its interaction with IL-23 receptors, thereby inhibiting the release of pro-inflammatory cytokines and chemokines. Yilutsu has patents on substances and formulations in China. The results of the expanded study of the phase III clinical trial in China showed that the response rate of PASI75, the main efficacy evaluation indicator, continued to rise over the course of treatment. The PASI75 response rate remained at 91.3% in week 52 of treatment, and the safety and tolerability of long-term use of Eilutol was good. The maintenance period of Yilu requires only 4 doses per year. Lower dosing frequency may lead to higher patient compliance and provide safe and effective treatment options for adult patients with moderate to severe plaque psoriasis.
Clinical development capabilities have been proven, and innovative development paths have yielded results one after another. Yilutsu only took 14 months from obtaining the Chinese Drug Clinical Trial Approval Notice (IND) to submitting the NDA, including 2.5 months (including the Spring Festival) to completing the enrollment of 220 test subjects, confirming Kangzhe Pharmaceutical's efficient clinical development capabilities based on commercialization advantages. Yilutsu is Kangzhe Pharmaceutical's second innovative drug approved for marketing in China this year after methotrexate injection was approved. After five years of investment layout and R&D promotion, the company's path of innovation and development reached a major milestone.
Yilutsu's commercialization work is progressing steadily, collaborating with products on sale to strengthen competitiveness in the skin field. Yilutsu is one of the company's major innovative products, and product commercialization work is progressing steadily. It will further strengthen the company's overall competitiveness in the field of skin treatment in collaboration with Kangzhelimei's products Xiliaotuo, Anshukoxi, and the soon-to-be marketed product Lucotinib Cream.
Profit forecast and valuation: We maintain our profit forecast. We expect the revenue for 2023-2025 to be 94.94, 104.09 and 11.868 billion yuan respectively, up 3.75%, 9.64% and 14.02% year-on-year; the estimated net profit to the mother is 3353, 3655 and 4.136 billion yuan respectively, up 2.89%, 8.99%, 13.16% over the previous year, corresponding to the closing price on June 2, 2023, PE 7.38, 6.77, 5.99 times 5.99, maintaining the “buy” rating.
Risk warning: Risks such as the impact of collection exceeding expectations, the marketing progress of products under development falling short of expectations, overseas expansion falling short of expectations, and changes in industry policies.