Incident: The company released its 2022 report and the first quarterly report of 2023. It achieved operating income of 0.2 billion yuan in 2022 and net profit of 300 million yuan (+1.5%) from the mother. The first quarter of 2023 achieved net profit of -80 million yuan (+13.3%).
Denlutamide NDA has been accepted and is expected to be the first drug approved for second-line treatment of metastatic casting-resistant prostate cancer (mCRPC) in China. The phase III clinical trial of denlutamide reached the main end point after IDMC evaluation in June 2022. The data was selected for ASCO 2023, and the listing application was accepted by CDE in March 2023. Denlutamide is a new class 1 drug intended for mCRPC patients who have failed treatment with abiraterone acetate or docetaxel, are intolerable or unsuitable for docetaxel treatment. It is also the first innovative drug for this type of treatment to apply for the marketing of a new drug. It is expected to be approved for marketing in early 2024. Additionally, its global multi-center phase III clinical for the treatment of first-line mCRPC is being enrolled.
The development of URAT1 inhibitors and AR PROTAC products is advancing at an accelerated pace. The HP501 Chinese combined xanthine oxidase inhibitor IND was accepted by NMPA in January 2023. The HP518 clinical Ia dose climbing study enrolled the first patient in Australia in January 2022, and phase Ia clinical studies for multiple dose groups have now been completed. The application for dose extension Ib study submitted by HP518 in the US was approved by the FDA in January 2023. HP518 is the first oral AR PROTAC drug under development to enter clinical trials in China, and HP518 is expected to become a next-generation treatment for prostate cancer.
Technology platforms such as PROTAC have established the ability to continuously innovate independently, and many clinical-stage products are worth looking forward to. The company has developed 10 products in the pipeline, 9 of which are new drugs developed by the company itself. The field of diseases is mainly tumors and metabolic diseases. There are 8 types of tumor pipelines, including HC-1119, HP558, and HP518, covering various targets such as AR, SHP2, CBP/p300, BET, FAK, etc.; the field of metabolic diseases mainly includes HP501, HP515, etc. Many clinical-stage products are worth looking forward to. For example, HP501 is a potentially safer and more effective anti-hyperuricemia/gout URAT1 inhibitor, and HP518 is the first oral PROTAC molecule to enter clinical treatment of drug-resistant prostate cancer in China. The IND HP530S tablets intended for use in solid tumors were accepted by the NMPA in February 2023.
Profit forecasts and investment recommendations. The company is expected to achieve revenue of about 0.02, 160 and 380 million yuan respectively in 2023-2025. Considering Haichuang Pharmaceutical's strong R&D capabilities and outstanding deuteride and PROTAC technology platforms, the first innovative drug, dernulamide NDA, has been accepted, maintaining the “buy” rating.
Risk warning: R&D or review and approval progress falls short of expected risks, increased market competition risks, policy risks in the pharmaceutical industry, etc.