Event: the company (Party A) signed the "Technology Development (Cooperation) contract" with the Guanganmen Hospital of the Chinese Academy of traditional Chinese Medicine (Party B) on October 16, 2018. The two sides plan to jointly participate in the research and development of the preparation project of the medical institution of "Tangning Tongluo capsule". Research and development objectives: party An and Party B jointly develop Tangning Tongluo capsule in accordance with the requirements of the measures for the Administration of preparation Registration of Medical institutions (trial) (Bureau order No. 20), and apply for the Registration approval of preparations of Medical institutions in Beijing. After obtaining the registration approval of preparations of medical institutions in Beijing, party B shall prepare and use them in accordance with the management system of hospital preparations in Beijing.
Event comments:
Join hands with many high-quality third-class hospitals to help Tangning to promote throughout the country. Diabetes product Tangning Tongluo capsule, which originated from Miao medicine prescription, has been approved by Guizhou Province and Hunan Province, and has been used in more than 20 hospitals in Guizhou Province. In order to promote the research and development of the drug nationwide, since the company signed the technology development contract with Guangdong Hospital of traditional Chinese Medicine in June 2017, the company signed similar contracts with Ruikang Hospital affiliated to Guangxi University of traditional Chinese Medicine and Inner Mongolia Autonomous region traditional Chinese Medicine Hospital in January and June 2018 respectively in order to obtain the registration approval of medical institution preparation in the corresponding provinces. In addition, the company also signed a non-standard preparation cooperation agreement with the Chinese people's Liberation Army General Hospital in 2015, and the project successfully entered the clinical trial phase in July 2017. This time, we signed a cooperation agreement with Guanganmen Hospital of traditional Chinese Medicine, successfully copied the model of Guangdong Hospital of traditional Chinese Medicine, and further expanded the cooperative development territory of Tangning Tongluo in the whole country.
Guang'anmen Hospital of traditional Chinese Medicine has strong research strength and is expected to strengthen the demonstration effect. Guanganmen Hospital of traditional Chinese Medicine is a Grade 3A traditional Chinese medicine hospital directly under the State Administration of traditional Chinese Medicine, which integrates medical treatment, teaching, scientific research and prevention and health care. it is a health care base for central cadres and a national "demonstration hospital of traditional Chinese medicine".
The main results are as follows: 1) Guanganmen Hospital has strong scientific research strength and rich achievements. At present, the hospital has 44 experts who enjoy special government subsidies; since its establishment, it has won 164 awards for scientific research achievements, including 13 national scientific and technological progress awards and 135 provincial and ministerial awards; 37 scientific research achievements have been transferred and 9 new drug certificates have been obtained; a total of 40 patents are held, including 35 invention patents and 5 utility model patents. 2) with rich resources and experience in diabetes research, it is expected to accelerate the research and development of Tangning Tongluo. In addition to having a diabetes vascular function testing laboratory, as early as 2013, the hospital launched a special project for the traditional Chinese medicine industry of the State Administration of traditional Chinese Medicine to recruit 200 patients with II type diabetes in Beijing. The study was randomly divided into traditional Chinese medicine group and western medicine group. The hospital provided patients with free research drugs and related examinations for one year. If the application for the approval of preparation Registration of Beijing Medical institutions is successful, its demonstration effect will promote the national coverage of Tangning Tongluo.
The clinical trial of the new drug Puilastat mesylate was accepted by CDE and officially entered the field of hematology and oncology. On October 8th, the company announced that the application for registration of the clinical trial of the "1.1 class new drug for hematoma chemotherapeutic drug Pruitar mesylate" jointly developed by the company and West China Hospital of Sichuan University has been accepted by the State Drug Administration. 1) Puilestat mesylate is a new generation of selectively targeted histone deacetylase inhibitors (HDAC inhibitors), which is a new class of chemical drugs with a new chemical structure, which has not been listed at home and abroad. The company owns all the independent intellectual property rights of the compound and has applied for international patents to more than 30 countries, including the United States, Japan, the European Union and so on. 2) preclinical studies have shown that its anti-tumor activity and safety are better than those of similar target drugs, and the first indication of this drug is recurrent or refractory hematological malignant tumors. including but not limited to B-cell lymphoma, multiple myeloma, B-cell acute leukemia, T-cell lymphoma, T-cell acute leukemia. 3) benefiting from the application for acquiescence in clinical trials that landed in July, Puilestat is expected to start phase I clinical trials as early as December 2018. At the same time, the company plans to complete the declaration of IND to FDA of the United States in March 2019. 4) the market of hematological oncology drugs is vast, and the current scale is more than 17 billion yuan. According to the Industrial Information Network, the number of new hematological tumors in China reached 176500 in 2015, including 75300 of leukemia, 13000 of myeloma and 88200 of lymphatic cancer. Conservatively assuming that the drug cost is 100,000 yuan per year, it can be calculated that the existing market scale of hematological oncology drugs is 17.65 billion yuan.
Investment advice:
We estimate that the net profit of the company from 2018 to 2020 will be 600 million yuan, 691 million yuan and 800 million yuan respectively, and the EPS will be 0.43,0.49,0.57 yuan respectively, corresponding to 18 times, 16 times and 14 times of PE. Considering the steady growth of the company's key varieties and the rapid release of granule products, Tangning Tongluo capsule has great market potential and cooperates smoothly with a number of hospitals; the application for the new drug Puilasta mesylate clinical trial is accepted by CDE, and we maintain its "buy" investment rating.
Risk Tips:
Product price reduction; Tangning Tongluo capsule market promotion progress is slow; focus on product research and development results are lower than expected; pledge equity unwinding risk