Main points of investment
Items:
One of the company's business partners, Sagimet Biosciences Inc. Phase II (FASCINATE-1) clinical trial data of TVB-2640 (company code: ASC40), a candidate drug for nonalcoholic steatohepatitis (NASH), are released today. The results show that the drug has a good efficacy. The company has the exclusive production and sales rights and interests of the drug in Greater China.
Peace viewpoint:
Fatty liver is a major disease in China and the world, and there are no targeted drugs at present. Nonalcoholic fatty liver disease (NAFLD) includes simple fatty liver, non-alcoholic steatohepatitis (NASH) and NASH-related cirrhosis. If left untreated, simple fatty liver may develop into NSAH, while the latter may develop into liver cirrhosis. NAFLD is the most common chronic liver disease in the world. The global incidence of NAFLD is 25%, and the incidence in China is 20%. There are about 200-300 million NAFLD patients in China. It is estimated that there are more than 30 million NASH patients in the country. NAFLD is the most common cause of hepatocellular carcinoma in the United States. A study in the United States shows that NAFLD-related hepatocellular carcinoma accounts for 59% of all hepatocellular carcinoma. Obesity, Ⅱ diabetes, hyperlipidemia and hypertension are the three major risk factors of NAFLD. The incidence of NAFLD in obese people is as high as 70%. With the continuous increase of obesity and the three high populations, the prevalence rate of NAFLD shows an upward trend. At present, there is no specific drug for the treatment of NAFLD, so we can only use hepatoprotective drugs.
The results of phase II clinical trials of ASC40 are excellent, and the progress of research and development is in the first echelon in China. Phase II clinical data of ASC40 showed that it significantly reduced liver fat content (the main end point of this trial). In the 50mg group, the proportion of patients with liver fat loss of more than 30% was 11.1% in the 61%vs control group.
Horizontal reference comparison of this index: the Firsocostat of Gilead is 15.4% of 47.8%vs control group, and the Tropiflexor of Novartis is 64%vs control group of 20%. The Resmetirom of Madrigal is 74.4% vs 29.4%. In addition, in the phase II trial of ASC40, the subjects also showed improvements in liver function and fibrosis indicators. The side effect was less, and the main event was level 1. The research and development progress of ASC40 is probably the fifth in the world, and it is in the first echelon in China. If it can be listed smoothly, it will have a first-mover advantage.
Maintain the recommended rating. It is estimated that the EPS of the company from 2020 to 2022 is-0.09,0.06 and-0.03 yuan respectively, and the corresponding PE is-33X/-44X/-111X respectively. There is a lack of specific drugs in the domestic liver disease market. As one of the few companies in the forefront of liver disease drug research and development, the company has considerable potential in the future. The second-stage clinical results of ASC40 are excellent, and the probability of successful listing is further improved. The clinical results of PD-L1, which aims to cure hepatitis B, are also expected to be released in the second half of the year, which may become a stock price catalyst. Share prices are at an all-time low, maintaining a "recommended" rating.
Risk tips: 1, due to the impact of the epidemic, the company's declared products and products in clinical trials may be delayed; 2, many of the company's drugs under research are complete innovation targets, with the risk of failure; 3, affected by the price reduction of hepatitis C DAA drugs, the performance of the products sold by the company may be dragged down.